Joe Biden wants to raise taxes on the rich
US President Joe Biden wants to tax the super-rich and corporations more heavily in the future. That emerges from the draft budget of his government.
But he has little chance of surviving in the Republican-dominated Congress.
The US government under President Joe Biden has presented its draft budget for the coming fiscal year. This includes plans to strengthen social security and health insurance and to tax companies and wealthy citizens more heavily.
According to the draft budget, anyone with assets of more than 100 million US dollars will have to pay a minimum tax rate of 25 percent in future. The existing tax regulations allow for huge loopholes, the Democrats criticize in the budget draft. Many of the wealthiest Americans would pay lower tax rates than middle-class households.
In a speech in Philadelphia, Biden emphasized that working people had “sacrificed their health” and “been left behind by the economy” for too long. “At the same time, those at the top got away with everything,” said the President. He demanded:
“No billionaire should pay a lower tax than someone who works as a teacher or firefighter.”
Higher taxes for a smaller deficit
According to the budget plans presented, corporations would also have to adjust to higher taxes. Biden’s government wants to raise the tax rate for companies from the current 21 percent to 28 percent. Tax advantages for oil and gas companies are to be abolished in the future. “We must ask the richest and largest companies to pay their fair share,” Biden said.
With these tax increases for the super-rich and companies, the government wants to reduce the budget deficit by almost three trillion US dollars within ten years. Last year, the United States posted a deficit of $1.38 trillion. The draft for the new fiscal year, which begins in October, projects a deficit of US$1.8 trillion – a higher amount than expected.
Overall, the next budget should include around 6.9 trillion dollars – for the current budget year the volume is 6.2 trillion US dollars. Most of the money is earmarked in the draft to fund Social Security and public health insurance and similar programs.
This includes, for example, the public health insurance fund Medicare for people aged 65 and over and people with disabilities. According to the US government, the solvency of the health insurance company is to be secured for another 25 years. Experts are currently warning that Medicare could only remain solvent until 2028, as reported by the AFP news agency.
But Biden’s government also wants to invest more in the defense sector. Around 842 billion US dollars are planned for the Ministry of Defense in the draft budget – a record sum. Around six billion US dollars have been earmarked for support for Ukraine, NATO and partner countries in Europe.
There is a risk of a tough struggle with Republicans
But the Biden government’s plans stand little chance of being passed in their current form. In the US, Congress has to approve the budget – and the Democrats lost their majority in the committee at the midterms last November.
So they are dependent on compromises with the opposition Republicans, and above all they are pushing for cuts in government spending. Especially with a view to the debt ceiling, which is 31.38 trillion US dollars for the USA and which had already been reached in January.
Shortly after the draft budget was published, Republican Kevin McCarthy, chairman of the US House of Representatives, went against the budget, especially with regard to Biden’s tax plans. “Raising taxes in a sluggish economy will only hurt us more and push us into recession,” he warned.
In response, the President asked McCarthy and his party to submit their own budget plans and said they were willing to talk. “Tell me what you want to do. I’ll show you what I want to do and see what we can agree on,” Biden said.
