Biden proposes HIGHEST personal income tax rate since 1986 in $6.8 trillion budget that could push national debt to $51 trillion by 2033
- The $6.8 trillion spending plan, which has no chance of passing Congress, calls for raising the top tax rate from 37 to 39.6 percent
- Other changes include increasing the federal corporate income tax rate from 21% to 28% and quadrupling the stock redemption tax rate to 4%.
- The budget would raise the national debt from $31.4 trillion to about $51 trillion over the next decade
President Biden has proposed nearly $5.5 trillion in new taxes and the highest personal income tax rate in nearly 40 years.
The $6.8 trillion spending plan, which has no chance of passing Congress, calls for raising the top tax rate from 37 to 39.6 percent.
One of Biden’s biggest proposed changes to the tax code would be to nearly double the capital gains tax rate for people earning $1 million or more from 20% to 39.6% and apply an additional surtax to fund Medicare, raising rates to 45%.
Other changes include increasing the federal corporate income tax rate from 21% to 28% and quadrupling the stock redemption tax rate to 4%.
The budget would raise the national debt from $31.4 trillion to about $51 trillion over the next decade. Yet, if passed, the White House says the deficit would be about $3 trillion lower than current spending levels.
Biden dubbed Donald Trump ‘maybe the future president’ before a disapproving audience in Philadelphia where he spoke about his recently released $6.8 trillion budget
The proposal also calls for closing the “carried interest loophole” for private money managers and slapping those with income or assets totaling $100 million or more with a minimum tax of 20% on unrealized gains. .
Under current law, investment fund managers can pay a 20% capital gains tax rate on a portion of their income rather than being subject to the 37% rate.
The president is also proposing to raise the Obamacare tax from 3.8% to 5% for those earning at least $400,000 to add to the Medicare Trust Fund. Biden says the new levies would extend Medicare’s solvency an additional 25 years.
That would mean the wealthiest Americans would pay a federal tax rate of 44.6% on investment income and other income.
The proposal called for a minimum tax rate of 25% on households worth $100 million or more, or 0.01% of the population.
Biden’s budget would also eliminate a tax break for crypto losses and limit the amount high earners can hold in middle-class retirement accounts like Roth.
It would also eliminate a tax break for real estate investors that currently allows them to avoid paying taxes on property gains if they reinvest them in the market, as well as eliminate tax breaks for oil and gas companies.
The budget, however, would expand the child tax credit to pandemic levels – $3,600 for children under six and $3,000 for older children, up from $2,000 previously. It would also expand the earned income tax credit for low-income workers without children.
In exchange for higher taxes, the budget injects massive amounts of money into social programs like child care and paid family leave.
Enough for the biggest peacetime budget in history was also proposed – including $842 billion for the Pentagon, a 5.2% pay rise for troops, $6 billion to support Ukraine and Europe and $37 billion for the nuclear weapons program.
Billions are also being set aside for a 5.2% pay rise for federal workers, support for refugees, more offshore wind farms and a $25 billion investment in border security.
It is asking for $688 billion in discretionary non-defence spending, that is, money for programs that aren’t mandatory like Social Security and Medicare. This is an increase of $47 billion over last year’s budget.
