WASHINGTON—President Joe Biden released his $5.8 trillion budget for fiscal year 2023 on March 28, including significant funding for law enforcement, in an effort to set himself apart from progressives in his party who have advocated for defunding the police.
Biden also called for more defense spending and a new minimum tax targeting the rich.
Tax on Ultra-RichAs part of his 2023 budget, Biden is also asking Congress to approve legislation that requires the richest U.S. families to pay a minimum of 20 percent on all of their income, including capital gains on unsold assets such as stocks. Capital gains are only taxed when they're realized—when the assets are sold—under current law.
Biden's “Billionaire Minimum Income Tax” will make the U.S. tax code more equitable, while also reducing the deficit by $360 billion over the next 10 years, according to the White House.
Only the wealthiest 0.01 percent of U.S. households (those worth more than $100 million) will be subject to the tax, according to the plan. Households earning more than $1 billion will account for more than half of the revenue, the White House stated in a fact sheet.
If a wealthy family already pays 20 percent on their total income (standard taxable income and unrealized investment income), they won't be subject to any additional taxes under the proposal. However, if a rich household’s tax-free unrealized income permits them to pay less than 20 percent on their whole income, they'll need a top-up payment to reach the 20 percent threshold.
It’s unclear whether the new tax would advance in Congress. Garrett Watson, senior policy analyst at the conservative Tax Foundation, criticized the complexity of the proposal.
“It is already clear that this proposal would make the tax code more complicated and may not effectively accomplish the goal of proponents who seek to raise tax rates on those with very high net worth and incomes,” Watson told The Epoch Times.
However, the Institute on Taxation and Economic Policy (ITEP), a left-leaning think tank, applauded the new tax plan.
“It will help us address the soaring inequality we see in this country and make the tax code fairer, more adequate, and more sustainable,” Amy Hanauer, executive director at the ITEP, said in a statement. “This plan offers a transformational and long-overdue change.”
'Global Threats'The budget also focuses on "confronting global threats,” proposing $773 billion for the Department of Defense, compared to $728.5 billion provided in discretionary spending in 2022.
“To sustain and strengthen deterrence, the Budget prioritizes China as the Department’s pacing challenge,” the White House stated.
The budget also includes nearly $1.8 billion for the State Department and USAID “to support a free and open, connected, secure, and resilient Indo-Pacific Region and the Indo-Pacific Strategy," as well as $400 million for the “Countering the People's Republic of China Malign Influence Fund.”
“I’m calling for one of the largest investments in our national security in history, with the funds needed to ensure that our military remains the best-prepared, best-trained, best-equipped military in the world,” Biden said in a statement.
Biden is also advocating for continued investment to “forcefully respond” to Putin's actions against Ukraine by providing economic, humanitarian, and security assistance to Kyiv, Ukraine. The budget allocates roughly $682 million in aid to Ukraine.
Biden’s budget proposal is mostly a wish list, as the 12 appropriations measures that fund the government are ultimately approved by Congress. Hence, the president’s budget mainly serves as a messaging tool for the administration.
According to the White House, Biden’s budget plan would reduce the federal deficit by more than $1 trillion over the next decade.