“Cornerstone of the election campaign, contrasting with Trump’s economic policies.”
The Biden administration announced a budget statement of $7.3 trillion for the 2025 fiscal year on the 11th (local time).
The plan aims to reduce the fiscal deficit through increased taxes on the wealthy and corporations and secure financial resources for new low-income support programs. However, it is unlikely that the US Congress will pass the budget in its current form.
According to Bloomberg, the budget message includes raising the minimum corporate tax rate to 25% and applying a minimum income tax rate of 25% to the top 0.01% of the wealthy. The tax rate applied to stock buybacks will also increase from 1% to 4%.
The budget includes provisions to provide monthly tax deductions to some homeowners to offset the impact of high mortgage interest rates. It also mentioned the government’s new authority to reduce prescription drug prices and provide childcare assistance.
The government expects tax revenue to increase by $4.951 trillion over the next ten years. This includes more than $2.7 trillion through corporate tax increases and about $2 trillion from raising taxes on the wealthy. The fiscal deficit is expected to decrease by $3 trillion over the same period.
The budget message assumes expenditure of good deeds unrelated to mandatory expenses, like social security, in other words, discretionary spending at $1.671 trillion. It requested $895 billion for defense. It proposed an increase of $63 million for the judiciary’s antitrust budget.
Bloomberg reported that this year’s budget statement details the policies of President Biden, who is seeking re-election ahead of the November presidential election. However, with Congress divided along party lines, the likelihood of the budget proposal passing remains slim.
The Wall Street Journal (WSJ) also noted, “While this proposal may not gain traction in Congress, it will serve as a cornerstone of the election campaign, with a contrast to the economic policies of election rival, former President Donald Trump, in mind.”
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