Biden proposes the HIGHEST personal income tax rate since 1986 in $6.8 trillion budget that could cause the national debt to surge to $51 trillion by 2033
- The $6.8 trillion spending blueprint, which has no chance of passing Congress, calls for raising the top income tax rate from 37 to 39.6 percent
- Other changes include raising the federal corporate income tax rate from 21 to 28 percent and quadrupling the stock buyback tax rate to four percent
- The budget would grow the national debt from $31.4 trillion to around $51 trillion over the next decade
President Biden proposed nearly $5.5 trillion in new taxes and the highest personal income tax rate in nearly 40 years.
The $6.8 trillion spending blueprint, which has no chance of passing Congress, calls for raising the top income tax rate from 37 to 39.6 percent.
One of Biden’s biggest proposed changes to tax code would be nearly doubling the capital gains tax rate for people earning $1 million or more from 20 percent to 39.6 percent and applying an additional surcharge to fund Medicare, bringing rates up to 45 percent.
Other changes include raising the federal corporate income tax rate from 21 to 28 percent and quadrupling the stock buyback tax rate to four percent.
The budget would grow the national debt from $31.4 trillion to around $51 trillion over the next decade. Still, if enacted, the White House says the deficit would be about $3 trillion lower compared to current spending levels.
Biden dubbed Donald Trump ‘maybe the future president’ to a disapproving audience in Philadelphia where he talked about his newly released $6.8 trillion budget
The proposal also calls for closing the ‘carried interest loophole’ for private fund managers and slapping those that have income or assets that add up to $100 million or more with a 20 percent minimum tax on unrealized gains.
Under current law investment fund managers can pay a 20 percent capital gains tax rate on a portion of their incomes rather than being subjected to the 37 percent rate.
The president is also proposing increasing the Obamacare tax from 3.8 percent to 5 percent for those earning at least $400,000 to add to the Medicare Trust Fund. Biden says the new levies would extend Medicare solvency for another 25 years.
That would mean the richest Americans would pay a 44.6 percent federal tax rate on investment income and other earnings.
The proposal called for a 25 percent minimum tax rate on households worth $100 million or more – 0.01 percent of the population.
Biden’s budget would also eliminate a tax break for crypto losses and would limit the amount high earners can hold in retirement accounts meant for the middle class like Roth.
It would also eliminate a tax break for real estate investors that currently allows them to avoid paying taxes on real estate gains if they reinvest that in the market as well as eliminating tax breaks for oil and gas companies.
The budget would however expand the child tax credit to pandemic levels – $3,600 for children under six and $3,000 for older children, up from $2,000. It would also expand the earned income tax credit for low-income workers without children.
In exchange for higher taxes, the budget gives a huge injection of funding for social programs such as child care and paid family leave.
Enough for the largest peacetime budget in history has also been proposed – including $842 billion for the Pentagon, a 5.2 percent pay rise for troops, $6 billion in support for Ukraine and Europe and $37 billion on the nuclear weapons program.
There are also billions set aside for a 5.2 percent pay rise for federal workers, support for refugees, more offshore wind farms and a $25 billion investment in border security.
It calls for $688 billion in non-defense discretionary spending – meaning money towards programs that aren’t mandatory like Social Security and Medicare. That’s a $47 billion increase over last year’s budget.
