$6.9T TAX-&-SPEND NO-GO
Joe bares his 'no chance in hell' budget
WASHINGTON — President Biden’s $6.9 trillion budget plan calls for roughly $5.5 trillion in tax increases over the next decade to offset proposed spending increases — including a massive 5.2% federal worker pay raise.
The package, announced by the president in Philadelphia Thursday, is headed for certain defeat in the Republican-held House of Representatives as the GOP demands spending cuts without new taxes in a standoff with Biden over raising the federal debt ceiling later this year.
As a result, the plan’s most controversial features will serve as political rhetoric for Biden ahead of his expected 2024 reelection campaign, rather than becoming legislative reality.
“This is the start of a healthy dialogue,” White House budget director Shalanda Young told reporters on a morning conference call.
“We will see tax policies here that say to the richest Americans and the largest corporations . . . that you have to begin to pay your fair share,” she said.
But Young faced a grilling from journalists over criticism that hiking taxes could hurt the economy.
“Republicans will look at the $5.5 trillion in tax increases in this plan and say that those will hurt growth,” one said. “What would your response be on that growth question?”
Fiscally responsible?
Young said the changes would ensure that “we can continue to invest in working families in this country and we can continue to make sure the middle class can prosper all while being fiscally responsible, bringing down the deficit by nearly $3 trillion.”
Biden’s plan calls for raising the corporate tax rate to 28% (up from 21%) to raise $1.33 trillion over 10 years and for raising the top individual tax rate to 39.6% (up from 37%).
The budget also proposes the near-doubling of capital gains taxes on assets like stocks — from 20% to 39.6% — for people who earn more than $1 million in annual income. Those two rate boosts are projected to raise $449 billion.
Another $1.17 trillion tax hike would come from applying a 25% minimum tax on people and families with a net worth of more than $100 million, a new 15% minimum corporate tax on billion-dollar companies and a quadrupling of the stock-buyback tax rate from 1% to 4%. The 25% minimum tax would apply to both actual income and unrealized gains from assets like stocks that have not been sold off.
An additional $549 billion would come from new taxes on international corporate profits and $30 billion from tax changes aimed at fossil-fuel companies.
Targeting loopholes
The budget intends to raise $650 billion by closing Medicare tax loopholes and raising the rate of Medicare taxes from 3.8% to 5% on incomes over $400,000.
Biden himself exploited a Medicare tax loophole to avoid paying up to $500,000 in taxes to fund the old-age health program by routing income from his speaking fees and book profits through what’s known as an “S corporation” in 2017 and 2018.
A reporter for The Post asked Young if Biden would reimburse the Treasury Department for Medicare taxes that he avoided paying, but she would not say.
“He has put forth a proposal, as you mentioned, to close loopholes that the wealthiest have exploited in order to not pay their fair share or anything close to it. So we’re gonna close those,” Young said, without addressing Biden’s own use.
“We make absolutely no apologies about putting these proposals forward because it’s the right thing to do,” Young added.
Chris Jacobs, a former GOP congressional aide who last year filed an IRS whistleblower complaint against Biden, said “Joe Biden likes to say ‘Show me your budget and I will show you your values.’ By refusing to pay his fair share of Medicare’s costs, Joe Biden’s personal budget shows that he values one family above all — his, not yours.”
Proposed spending increases include the pay boost for federal workers — the largest since the Carter administration following a 4.6% increase that took effect this year.
Other proposed spending increases include a $26 billion lift for the Defense Department (3.2%), plus another $6 billion in aid to Ukraine — following a trio of bills passed last year that included about $100 billion in aid.
The budget also proposes $59 billion in new funding and tax incentives to support the construction of “affordable” housing and $22.1 billion for early-childhood education, a $2.1 billion increase.
Although the budget projects nearly $3 trillion in deficit reduction over the next decade, the math is fuzzy.
A budget document released by the White House projects that the annual deficit actually would gradually increase from $1.38 trillion in fiscal 2022 to $1.9 trillion in fiscal 2025 — meaning that the $31.6 trillion national debt actually would grow at a faster rate than at present.
“We would not expect to continue to see large deficit reduction, year to year, just as we do not expect to see the rapid economic growth and job creation we saw in 2021,” Young said in response to a question about projections that deficits would increase despite claimed cuts.
“The goal here is to look at the trajectory we are on. With this president’s policies, what cannot be denied is over a 10-year period we’ve put forward a path to see nearly $3 trillion in deficit reduction.”
Fiscal hawks scoffed at Biden’s proposal, with ex-Trump White House budget director Russ Vought telling The Post: “The Biden budget will do nothing to address the current fiscal crisis, marked by high inflation, nor alleviate the burden of woke and weaponized bureaucracy on the American people.”
Senate Minority Leader Mitch McConnell (R-Ky.) reiterated Biden’s proposals have no chance of becoming law, saying the plan consisted of “massive tax increases, more spending — all of which the American people can thank the Republican House for will not see the light of day.”