Biden proposes $6.8tn budget and tax hikes for rich

The article reports on U.S. President Joe Biden’s proposed budget plan for the fiscal year starting in October, which includes significant government spending and higher taxes on the wealthy. Biden unveiled the plan at a union hall in the swing state of Pennsylvania, where he challenged Republican opponents on fiscal responsibility and highlighted plans to cut U.S. deficits nearly $3 trillion over 10 years by raising taxes on those earning more than $400,000 a year.

The proposed budget would increase federal spending to $6.8 trillion from the $6.2 trillion expected to be spent in the current fiscal year. Biden seeks to fund the higher spending and reduce the deficit by imposing a 25% minimum tax on billionaires and nearly doubling the capital gains tax from 20%. He also wants to quadruple a 1% stock buyback tax and roll back some corporate tax breaks enacted in 2017 under former Republican President Donald Trump.

However, the plan faces stiff opposition from Republican lawmakers, who describe it as “reckless.” Large parts of Biden’s agenda are unlikely ever to be enacted by the current Congress, which is now controlled by Republicans after the November midterm elections.

Despite the political messaging, the Biden budget makes it clear that the aging U.S. population means legally mandated spending on social programs will continue to be a long-term drag. The budget projects more than $1 trillion deficits every year over the next 10 years, even if Biden gets his requests for higher taxes and cost-cutting measures. Total U.S. debt would rise to nearly 110% of annual gross domestic product in 2033, a figure that rivals the peaks during the country’s mobilization for World War II.

The proposed budget also includes significant spending on areas like national defense, healthcare subsidies, cancer research, first-time homebuyers, rail safety, and preschool for all four-year-olds. Biden requested $886 billion in spending for national defense, a 3.2% increase over the number enacted for the 2023 fiscal year.

While some economists have praised the measures on paid leave, climate, and funding for schools in high-poverty neighborhoods, others believe the budget does not go far enough to address dangerous debt levels. The Committee for a Responsible Federal Budget advocacy group, for example, said that Biden deserved at least a participation trophy for his deficit reduction proposals, but that deficit reduction would ultimately need to be nearly three times that large.