The recommended hike to taxes on wealthier Americans is being brought forward to cover the cost of services such as Medicare and Social Security. However, Joe Biden’s plans have been slammed as an “economic disaster”.
As part of President Biden’s proposal, the top marginal rate of income tax would be raised from 37 percent to 39.6 percent.
This tax hike would predominantly impact single filers with earnings over $450,000 (£324,000) and couples who make an income of over $450,000 (£365,000) per year.
On top of this, the proposed Budget aims to tax capital gains at the same rate of 39.6 percent of Americans earning over $1million (£812,000).
As well as this, Biden is also looking to close the “interest loophole” which allows investment fund managers to pay a lower rate.
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During his State of the Union address last month, the President cited his desire for a minimum tax on the country’s wealthiest citizens.
This would reportedly include a 25 percent minimum tax on anyone with wealth which exceeds $100million (£81.2million).
As part of the 2023 Budget proposal, the White House suggested a 20 percent tax on people with the same amount of money.
However, these tax policy recommendations have failed to garner wider support among the Democratic party.
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As well as this, Biden is proposing increasing the corporate income tax rate to 28 percent, as well as raising taxes on certain industries.
However, these plans have been slammed by business leaders and the White House’s political opposition.
Neil Bradley, the executive vice president of the US Chamber Of Commerce, referred to the administration’s Budget as a “recipe for economic and fiscal disaster”.
Jodey Arrington, the Republican representative for Texas’s 19th congressional district and the House Budget Committee Chair Republican, outlined the opposition’s take on the President’s proposal.
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He said: “His policies have led to 40-year record inflation, soaring interest rates and the prospect of a sustained economic recession.
“Unfortunately, Biden’s latest budget is more of the same bloated bureaucracy at the expense of working families, while sticking our grandchildren with the bill.”
With this response, the President’s proposals are unlikely to make it past the Republican-controlled House of Representatives.
The Budget has also received criticism from tax experts who believe what is being proposed does not go far enough.
Josh Bivens, director of research at the Economic Policy Institute, said: “Of there’s a quibble on the tax side, it’s that it doesn’t ask enough of plenty of American households who could afford to pay more.”
Despite this, President Joe Biden’s tax proposals have been supported by members of his own party.
Hakeem Jeffries, the US House Democratic Leader said: “The Biden budget plan protects Social Security, strengthens Medicare and invests in our children.
“House Republicans continue to hide their extreme plans from the American people.”
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