Biden’s Budget Plan Would Raise Taxes, Cut Deficit by $3 Trillion, Invest in Manufacturing

President Joe Biden outside the White House in Washington, on Mar. 1, 2023. (Win McNamee/Getty Images)

President Joe Biden is set to release his $6.9 trillion budget for fiscal year 2024 that calls for significant tax increases for wealthy and corporations, cost-cutting measures for families, and more investment in American manufacturing and technology.

Biden will unveil his budget proposal on Thursday afternoon at a union hall in northeast Philadelphia, in what is anticipated to be a campaign-style event.

According to a fact sheet released by the White House ahead of the event, the president’s budget will focus on four major areas.

Increasing Taxes on Wealthy and Corporates

Biden’s budget proposal would reduce the federal deficit by nearly $3 trillion over the next decade, a far more ambitious plan than the $1 trillion deficit reduction proposed by the president last year.

The president emphasizes higher taxes on the ultra-rich and corporations to help pay for his spending proposal. He calls for a 25 percent minimum tax on households earning more than $100 million. In addition, the plan seeks to partially repeal former president Donald Trump’s tax cuts, raising the top individual tax rate to 39.6 percent from 37 percent and the corporate tax rate to 28 percent from 21 percent.

The budget also proposes to “reform the international tax system” by raising the tax rate on U.S. multinational firms’ foreign earnings to 21 percent from 10.5 percent.

The blueprint is calling for a quadrupling of the 1 percent tax on stock buybacks that went into effect in January, which the White House claims would “address the continued tax advantage for buybacks and encourage corporations to invest in productivity and the broader economy.”

He also calls for higher taxes for oil and gas companies, and proposes to reduce “wasteful spending on big pharma, big oil, and other special interests, combats fraud, and makes programs more efficient.”

Lowering Costs for Families

The president proposes the restoration of the Child Tax Credit, which was enacted as part of the American Rescue Plan. The credit would be increased from $2,000 to $3,000 per child for children six and older, and to $3,600 for children under six, according to the plan. The credit would also be permanently reformed in the budget to make it fully refundable.

The plan proposes lowering health-care and prescription-drug costs. Over a 10-year period, the budget invests $150 billion to improve and expand Medicaid home and community-based programs. In addition, the budget contains $59 billion in mandatory funding and tax breaks targeted at increasing the supply of affordable housing, including for extremely low-income households.

“We’ve been encouraged by the recent slowdown in inflation, but we know there’s more work to do,” Shalanda Young, director of the Office of Management and Budget, told reporters during a call on Thursday. “Families need a little breathing room, and that’s why the budget includes proposals to bring down the cost of everyday necessities and lowers healthcare costs.”

As previously stated, Biden is also extending the Medicare trust fund’s solvency by at least 25 years without cutting benefits.

Investing in America

The budget includes roughly $652 million for American manufacturing expansion. It also contains nearly $21 billion in discretionary spending for CHIPS and Science Act-authorized activities, with the goal of increasing investments in innovation and cutting-edge research.

The budget aims to invest in workforce to close the skills gap by investing in apprenticeship and career training programs.

The president also requests both discretionary and mandatory resources to compete with China economically and in other areas, seeking to strengthen the United States’ role in the Indo-Pacific as part of that effort.

Investing in Clean Energy, Equity

The president’s budget proposal also invests $4.5 billion in clean energy across the country, creating jobs in both rural and urban areas. It intends to make “historic investments” in science and research to advance his climate agenda.

“The budget invests in reducing global warming pollution and achieving the president’s target to cut greenhouse gas emissions 50–52 percent by 2030,” the fact sheet states.

Biden’s efforts to “advance equity and environmental justice” also remain top priorities, according to the fact sheet.

Presidential budget proposals are mostly symbolic. Biden’s budget is unlikely to gain traction in Congress, but it serves as a starting point in budget and debt-ceiling talks with Republicans.