President Joe Biden is planning to introduce a budget that will propose tax increases on wealthy individuals and corporations, The Hill reports.
The plan is aimed at reducing the deficit by $2 trillion over the next decade, and has already sparked controversy in Congress.
In his State of the Union address last month, Biden explained that his budget would lower the deficit and extend the solvency of the Medicare Trust Fund by “making the wealthy and big corporations begin to pay their fair share.”
Critics argue new financial burdens on corporations will be passed on to consumers as higher prices. The Consumer Price Index (CPO) for January already increased 5.4%, compared to a year earlier.
One of the proposed changes is a Medicare surtax increase on earned and unearned income above $400,000, which would rise from 3.8% to 5%.
Biden has also suggested a new tax on wealthy households that would require individuals and families worth more than $100 million to pay a 20% tax on income and unrealized gains from liquid assets like stocks.
While Democrats support the plan, Republicans have already voiced their opposition.
Senate Republican Leader Mitch McConnell (R-KY) stated that “the president’s budget is replete with what they would do if they could — thank goodness the House is Republican — massive tax increases, more spending.”
McConnell added that the proposed tax increases “will not see the light of day.”
The administration is also expected to propose a quadrupling of the stock buyback tax, which was included in last year’s Inflation Reduction Act passed by Democrats, and set a 1% surcharge on corporate stock buybacks.
Other proposed changes include raising the top marginal income tax rate from 37% to 39.6%, and raising the corporate tax rate from 21% to 28%.
Senate Majority Leader Chuck Schumer (D-NY) has praised Biden’s budget, stating that it would reduce the deficit by $2 trillion by “making the billionaires and big corporations pay their own share.”
Schumer has called on House Republicans to introduce their own plan to reduce the deficit ahead of any talks on raising the debt limit.