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President Biden will propose new tax increases in his upcoming budget plan, which he also says will shave $3 trillion off the federal deficit over the next 10 years, the White House confirmed Wednesday.
Biden, 80, will unveil the full pitch ahead of a trip to Philadelphia Thursday — though the proposal is dead on arrival in Congress, where Republicans who oppose tax increases control the House of Representatives.
That means the most contentious policy ideas will serve as political rhetoric rather than legislative reality.
Press secretary Karine Jean-Pierre told reporters Biden’s budget plan would reduce the deficit “while lowering costs for families, investing in America and protecting programs Americans have paid into, because it proposes tax reforms to ensure the wealthy and large corporations pay their fair share while cutting wasteful spending on special interests like the oil [industry] and Big Pharma.”
Jean-Pierre was coy about details and deflected questions about a reported 5.2% pay increase for federal workers — which would be the largest since the Carter administration — and a 20% minimum tax on both income and unrealized gains of liquid assets, like stocks, that would apply to individuals and families worth more than $100 million.
The White House teased one of the tax proposals Tuesday — outlining a plan to hike Medicare taxes from 3.8% to 5% on those with income above $400,000 per year.
The Medicare tax hike also would close a loophole that Biden himself exploited in 2017 and 2018 to avoid paying up to $500,000 in Medicare taxes by routing much of his income, including speaking fees and book-sale proceeds, through what’s known as an S corporation.
Biden may also resurrect proposals to boost the top personal income tax rate to 39.6%, from its current 37%, while upping corporate taxation from 21% to 28%.
Senate Minority Leader Mitch McConnell (R-Ky.) told reporters in response to the mooted budget that “thank goodness the House is Republican.”
“Massive tax increases, more spending.
