ITEP Statement: President Biden Lays Out a Bold Vision for Tax Justice in Proposed Budget
news releaseContact: Jon Whiten – [email protected]
Today President Biden unveiled his fiscal year 2024 budget, which includes several tax reforms ITEP has tracked (some for many years). Below is a statement from our Executive Director Amy Hanauer and a list of some of the most important tax proposals and ITEP resources on them.
“President Biden’s budget proposal presents a bold vision for what tax justice should look like in America. The provisions would raise substantial revenue, fund important priorities and increase tax fairness. The revenue raisers are laser focused on taxing very wealthy individuals and corporations, and the budget would reduce the deficit while easing costs for American families, particularly for middle and low-income parents.”
Among the tax changes proposed in the budget, along with key ITEP resources:
- A new Billionaire Minimum Income Tax requiring those with wealth over $100 million to pay a minimum 25 percent tax rate on all income, including unrealized capital gains, raising hundreds of billions of dollars over a decade (Blog: President Biden’s Proposed Billionaires’ Minimum Income Tax Would Ensure the Wealthiest Pay a Reasonable Amount of Income Tax)
- Partly reversing the 2017 tax cut to the corporate tax rate by raising it from 21 percent to 28 percent, still lower than the 35 percent rate that applied to most corporate profits before the 2017 law went into effect (Report: Why Congress Should Reform the Federal Corporate Income Tax)
- Restoring the top personal income rate to 39.6% on earnings over $400,000 (Report: Extensions of the New Tax Law’s Temporary Provisions Would Mainly Benefit the Wealthy)
- Increasing the rate for long-term capital gains to 39.6% for households with over $1 million in income (Brief: Income Tax Increases in the President’s American Families Plan)
- A boost in the new excise tax on stock buybacks from 1 percent to 4 percent, raising several hundred billion dollars and recouping some of the massive tax cuts that have gone to corporate shareholders in recent years (Brief: Higher Stock Buyback Tax Would Raise Billions by Tightening Loophole for the Wealthy)
- Closing a loophole that wealthy people exploit to avoid paying Medicare taxes and increasing the Medicare tax rate on income over $400,000 (Blog: President’s Budget Would Strengthen Medicare Taxes Paid by the Wealthy)
- Reforming international corporate tax rules. For example, the President proposes to adopt an “undertaxed profits rule,” or UTPR, which would crack down on foreign corporations based in countries that do not carry out the international deal negotiated by the Biden administration to stop offshore tax dodging. The UTPR would conform to a similar rule in the OECD (Organization for Economic Cooperation and Development) agreement. (Report: Unfinished Tax Reform: Corporate Minimum Taxes)
- Restoring the 2021 expansion of the Child Tax Credit, which cut child poverty nearly in half in the year it was in effect (Blog: Census Data Shows Need to Make 2021 Child Tax Credit Expansion Permanent and Report: National and State-by-State Estimates of Two Approaches to Expanding the Child Tax Credit)
- Other changes include closing the carried-interest loophole, ending the “like-kind exchange” benefit that allows real estate investors to defer some taxes indefinitely, and ending tax preferences for oil and gas companies.