Washington, D.C. – The Biden administration is set to unveil a new plan aimed at targeting billionaires and corporate America with significant tax increases. This move is part of an effort to reduce the United States’ record national debt and lift the president’s approval ratings ahead of November’s election.
The proposed measures, expected to be outlined in Thursday’s State of the Union address and beyond, include raising the minimum corporate tax from 15 to 21 percent and implementing a 25 percent minimum tax on billionaires. These actions are geared towards reducing the national debt by $3 trillion over the next decade, as the country’s debt reached $26.2 trillion by the end of 2023, according to the Congressional Budget Office.
Despite the unlikely passage of these proposals through Congress, they serve to differentiate President Biden’s progressive agenda from that of his Republican opponent, Donald Trump. Public sentiment towards Biden’s economic performance remains skeptical, with 60 percent expressing disapproval of his handling of the economy, as per an FT-Michigan Ross poll conducted last month.
The upcoming State of the Union address presents a crucial opportunity for the 81-year-old president to sway doubtful voters and showcase his ability to lead for a second term. Concerns over Biden’s capability have been highlighted in a recent report, which portrayed him as a well-meaning elderly individual with memory challenges.
Economists have voiced apprehensions regarding the fiscal plans of both Democrats and Republicans, with the CBO warning of a possible increase in publicly held debt from 99 percent of GDP to 116 percent by 2034. In response to this, Biden’s proposal includes a billionaire’s tax and a corporate tax rate increase from 21 to 28 percent.
The administration also plans to eliminate tax deductions for companies paying employees over $1 million, which could generate over $250 billion in revenue. In contrast, Trump is expected to suggest making his first-term tax cuts permanent, which includes a reduction in the corporate tax rate from 35 to 21 percent.
The Organisation for Economic Co-operation and Development (OECD) has proposed a global agreement to establish a minimum global corporate tax rate of 15%, although some countries have not yet ratified the plan. Despite the challenges ahead, the Biden administration is forging ahead with its tax proposals in a bid to reshape the economic landscape and address the mounting national debt.