Biden’s Plan: Tax Hikes for Rich, Relief for Middle Class

Biden Looks to Raise Taxes on Wealthy and Corporations to Shave Deficit

Biden Proposes Tax Hike on Wealthy and Corporations to Tackle Deficit

The top economic advisor to President Biden, Lael Brainard, on Friday called for lawmakers to exploit the upcoming tax discussion next year to try to curb budget deficits by significantly increasing taxes on corporations and the rich.

Funding Tax Cuts for Middle-class

Under this plan, President Biden would more than compensate for the costs of preserving tax cuts for those earning $400,000 or less annually. Brainard, who heads the White House National Economic Council, provided the most comprehensive elucidation thus far of how President Biden would aim to guide the expected multitrillion-dollar tax debate.

Expiring Tax Cuts and The Deficit

A slew of tax cuts signed into law in 2017 by former President Donald J. Trump, who is challenging Mr. Biden in a rematch this fall, is poised to expire at the end of next year. It includes cuts for individuals at all income levels to reduce projected deficits and comply with congressional rules.

Addressing Growing Debt and Deficits

In her speech, Brainard reaffirmed Biden’s commitment to lower taxes for middle-class Americans and to increase them on top earners. However, her remarks expressed greater worry about escalating debt and deficits than the president and his team had previously shown when discussing the tax debate.

The 2025 Tax Debate

“At a minimum, we should avoid deepening the fiscal hole created by Republican tax cuts, by fully funding any extended tax cuts,” Brainard said. The remarks reflect an escalating effort by Democrats and Republicans to define what is likely to be a significant tax debate next year.

Impact of Expiring Tax Cuts

President Trump and his congressional allies have sought to prolong all of the expiring cuts, a move that the nonpartisan Congressional Budget Office warned this week could add up to $4.6 trillion to the federal debt over a decade.

Biden’s Tax Increase Proposals

President Biden’s most recent budget proposes nearly $5 trillion in tax increases on the wealthy and corporations. It also includes roughly $2 trillion in new spending programs.

Increasing Corporate Tax Rate

Brainard restated Biden’s calls for higher taxes on the rich and large corporations, including a rise in the corporate tax rate to 28 percent. It would be higher than the 21 percent ushered in by Trump’s law, the Tax Cuts and Jobs Act, but lower than the 35 percent rate before the 2017 tax package was passed.

Assisting Middle and Low-income Americans

Brainard also advocated for additional tax assistance for some lower- and middle-income Americans. She suggested restoring the enhanced child tax credit that President Biden temporarily passed into law in 2021 and making permanent an enhanced tax credit to help people purchase health insurance through the Affordable Care Act.

As we look to the future, the outcome of this multitrillion-dollar tax debate will not only shape America’s economy but also set a global precedent for tackling growing debt and deficits. The need for a fairer tax system has never been more urgent, and the world will be watching closely as this critical conversation unfolds.