Biden’s budget plan: Higher taxes on rich, lower deficits

WASHINGTON — President Joe Biden announced a budget blueprint Monday that calls for higher taxes on the wealthy, lower federal deficits, more money for police and greater funding for education, public health and housing.

Appearing at the White House with his budget director Shalanda Young, Biden said the proposal sends a clear message to the public about “what we value.” He outlined a focus on fiscal responsibility, safety and security and investments to “build a better America.”

The document essentially tries to tell voters what a diverse and at times fractured Democratic Party stands for ahead of the midterm elections that could decide whether Congress remains under the party’s control.

The bottom line: Biden is proposing a total of $5.8 trillion in federal spending in fiscal 2023, which begins in October, slightly less than what was projected to be spent this year before the supplemental spending bill was signed into law this month. The deficit would be $1.15 trillion.

There would be $795 billion for defense, $915 billion for domestic programs, and the remaining balance would go to mandatory spending such as Social Security, Medicare, Medicaid and net interest on the national debt.

The higher taxes outlined on Monday would raise $361 billion in revenue over 10 years and apply to the top 0.01 percent of households. The proposal lists another $1.4 trillion in revenue raised over the next decade through other tax increases that are meant to preserve Biden’s pledge to not hike taxes on people earning less than $400,000.

The 156-page plan also shows the splinters that persist in Biden’s coalition and the possible gaps between the promises of what is being offered and the realities of what ultimately emerges. Biden has backed many of these ideas previously without necessarily getting a full buy-in from Congress.

The proposal includes a minimum 20 percent tax on the incomes of households worth $100 million or more, similar to an earlier proposal Democrats in Congress began debating late last year in order to pay for Biden’s domestic spending plans. But those spending plans were put on hold after talks with West Virginia Sen. Joe Manchin collapsed.

More money would go to support law enforcement, yet bipartisan efforts at police reform have failed. The budget assumes — with a high degree of uncertainty based on forecasts made last November — that inflation at a 40-year peak gets back to normal next year.

The proposal faced immediate criticism from Republican lawmakers. They noted that deficits well in excess of $1 trillion annually would persist, said higher taxes could hurt growth and objected that additional government spending would feed into inflation.

“What this budget shows is that President Biden values more spending, more debt, more taxes and more pain for the American people,” said Rep. Jason Smith of Missouri, the top Republican on the House Budget Committee.

Among the tax changes is a 28 percent corporate tax rate and top individual rate of 39.6 percent, both increases.