Times-Herald (Vallejo)

Biden plans new taxes on the rich to help save Medicare

- By Chris Megerian and Josh Boak

President Joe Biden on Tuesday proposed new taxes on the rich to help fund Medicare, saying the plan would help to extend the insurance program's solvency by 25 years and provide a degree of middle-class stability to millions of older adults.

In his plan, Biden is overtly declaring that the wealthy ought to shoulder a heavier tax burden. His budget would draw a direct line between those new taxes and the popular health insurance program for people older than 65, essentiall­y asking those who've fared best in the economy to subsidize the rest of the population.

Biden wants to increase the Medicare tax rate from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains. The White House did not provide specific cost-saving estimates with the proposal, but the move would likely increase tax revenues by more than $117 billion over 10 years, according to prior estimates in February by the Tax Policy Center.

“This modest increase in Medicare contributi­ons from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden wrote in a Tuesday essay in The New York Times. He called Medicare a “rocksolid guarantee that Americans have counted on to be there for them when they retire.”

More than 65 million people rely on the program that costs taxpayers roughly $900 billion every year. The number of Medicare enrollees is expected to continue growing as the U.S. population ages. But funding for the program is a problem with federal officials warning that, without cuts or tax increases, the Medicare fund might only be able to pay for 90% of benefits by 2028.

Biden's suggested Medicare changes are part of a fuller budget proposal that he plans to release on Thursday in Philadelph­ia. Pushing the proposal through Congress will likely be difficult, with Republican­s in control of the House and Democrats holding only a slim majority in the Senate.

The proposal is a direct challenge to GOP lawmakers, who argue that economic growth comes from tax cuts like those pushed through by former President Donald Trump in 2017. Those cuts disproport­ionately favored wealthier households and companies. They contribute­d to higher budget deficits, when growth failed to boom as Trump had promised and the economy was then derailed in 2020 by the coronaviru­s pandemic.

The conflictin­g worldviews on how taxes would impact the economy is part of a broader showdown. Biden and Congress need to reach a deal to raise the government's borrowing authority at some point this summer, or else the government could default and plunge the U.S. into a debilitati­ng recession.

Grover Norquist, president of Americans for Tax Reform and an advocate for the kinds of tax cuts generally favored by Republican­s, said that the U.S. economy would suffer because of the president's plan.

“The Biden tax hikes will raise the cost of goods and services for everyone, and make American workers and businesses less competitiv­e internatio­nally and vs. China,” Norquist said.

But Maya MacGuineas, president of the Committee for a Responsibl­e Federal Budget, applauded the plan despite having some reservatio­ns about it.

“The president's plan would generate hundreds of billions of dollars — perhaps even approachin­g a trillion dollars — to strengthen Medicare,” said MacGuineas, a fiscal watchdog focused on deficit reduction.

White House press secretary Karine Jean-Pierre declined to discuss the numbers behind the budget plan. She told reporters at Tuesday's briefing that she would not “dive into the math,” but that Biden's proposal on Thursday “will be very detailed and transparen­t.”

Ahead of an expected budget feud and the 2024 campaign season, Democrats have ramped up talk around Medicare, vowing to fend off any Republican attempts to cut the program, although so far the GOP has vowed to avoid any cuts. Still, Republican lawmakers have reached little consensus on how to fulfill their promise to put the government on a path toward balancing the federal budget in the next 10 years.

Last year, members of the House Republican Study Committee proposed raising the eligibilit­y age for Medicare to 67, which would match Social Security. But that idea hasn't moved forward in a split Congress.

 ?? EVAN VUCCI — THE ASSOCIATED PRESS ?? President Joe Biden delivers remarks to the 2023Intern­ational Associatio­n of Fire Fighters Legislativ­e Conference on Monday in Washington.
EVAN VUCCI — THE ASSOCIATED PRESS President Joe Biden delivers remarks to the 2023Intern­ational Associatio­n of Fire Fighters Legislativ­e Conference on Monday in Washington.

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