A new budget proposal for 2025 has been released by the White House, presenting what the economic future could look like if Biden wins a second term.
New Budget Proposal
President Biden released a new budget proposal for 2025 on Monday, highlighting points that are sure to grab the public’s attention, including significant tax changes and lower healthcare costs.
Tax Breaks and Tax Rates
The budget offers tax breaks for families and higher taxes on wealthy Americans and corporations, a move that could boost the economy while providing relief for middle-class and working-class Americans who are struggling with high interest rates and an ever-increasing cost of living.
Presenting a Vision
While it is doubtful that the proposals will be approved by the House and Senate and passed into law, it presents a vision of what government spending might look like if Biden and the Democrats win a second term.
$7.3 Trillion Budget Plan
The proposed federal budget for 2025 sits at $7.3 trillion and is detailed in a document issued by the White House. It is a comprehensive list that includes changes to tax rates, tax credits for homebuyers, defense spending, child tax credits, and more.
Corporate and Billionaire Tax
Corporate income tax rates would be raised from 21% to 28%, and the tax rate for billionaires would move from 16% on average to 25%.
Wealthy Households
All households with a combined income of $1m or more would be taxed at a marginal rate of 39.6%.
Moves for the Middle Class
Big changes were proposed for families, including a reintroduction of a child tax credit for low and middle-income earners, new childcare programs for households with a combined income lower than $200,000, and 12 weeks of paid family and medical leave.
Medicare Negotiations Brought Forward
As for healthcare, the budget proposed expediting Medicare drug negotiations, which would allow Medicare to negotiate prices on prescription drugs soon after they are introduced.
10-Year Projections
The White House also provided projections for how the budget proposal would benefit the U.S. economy over the next decade.
Cut the Deficit by $3 Trillion
They claimed that it would cut the deficit by $3 trillion in the next ten years, primarily through higher taxation of billionaires and other “ultra-wealthy” Americans. In the same period, it would raise tax revenue by $4.9 trillion.
The President’s Vision
“The budget details the president’s vision to protect and build on this progress and deliver on the agenda laid out in his State of the Union,” said Shalanda Young, the director of the Office of Management and Budget.
Giving the Middle Class a “Fair Shot”
She told reporters Biden is doing this by “lowering costs for families growing the economy from the middle out and bottom up by investing in all America to make sure the middle class has a fair shot and we leave no one behind.”
Trailing the SOTU
The announcement came only a few days after Biden’s State of the Union address, where the president called for higher taxes on the wealthy and announced his plans for earlier Medicare negotiations.
Congress Will Decide
Regardless of how financially viable the proposal may be, it’s up to lawmakers to take action. And with an increasingly polarised Congress that is struggling to make headway on many issues, approval of the budget is unlikely.
House Dismisses the Proposal
House Republican leaders, including House Speaker Mike Johnson and Leader Steve Scalise, swiftly dismissed the plan in a joint statement, saying that the pre-existing House budget plan already “reflects the values of hardworking Americans who know that in tough economic times, fiscal discipline is non-negotiable.”
Making the Campaign Rounds
He is now reiterating these points of his budget proposal in campaign speeches around the U.S. In a speech given in Goffstown, New Hampshire, he used a potential wealth tax to appeal to constituents of the swing state.
“Pay Your Fair Share”
“I’m a capitalist. Make all the money you want. Just begin to pay your fair share in taxes,” he urged. “A fair tax code is how we invest in things that make this country great.”
Biden vs Trump
He also called out his political rival, Donald Trump, whom he will almost certainly go toe-to-toe with in the November elections, in a much-anticipated repeat of the 2020 election showdown.
No More Tax Breaks for the Wealthy
“Do you really think the wealthy and big corporations need another $2tn tax breaks because that’s what he (Trump) wants to do?” he asked, also accusing his predecessor of “expanding the federal deficit.”
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The post Biden’s $7.3 Trillion Budget Plan: Wealthy Tax Hike Funds Family Tax Breaks, Healthcare Savings first appeared on From Frugal to Free.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
