The US government’s draft budget published on Thursday stipulates, among other things, that people with assets of more than USD 100 million (around EUR 95 million) should pay a minimum tax of 25 percent. Current tax rules allow for huge loopholes – many of the wealthiest Americans pay lower tax rates than middle-class households, it said.
In addition, the tax rate for companies is to be raised from the current 21 percent to 28 percent. “No billionaire should pay less tax than someone who works as a teacher or firefighter,” said US President Joe Biden in a speech in Philadelphia. “We must ask the richest and largest companies to pay their fair share.”
Reduce the budget deficit by raising taxes
The tax increases are intended to reduce the budget deficit by a total of almost three trillion dollars over the next ten years. The elimination of tax breaks for oil and gas companies as well as lower public payments for pharmaceutical companies when buying medicines should also contribute to reducing the deficit. At the same time, Biden wants to strengthen the public health insurance company Medicare for people over 65 and people with disabilities. The solvency of Medicare is to be secured for another 25 years.
All told, Biden’s 2024 budget envisages spending of around $6.9 trillion. The budget deficit would therefore be around 1.8 trillion dollars (1.7 trillion euros) and thus higher than expected. Most of the money is earmarked for Social Security, public health insurance, and similar programs.
Republicans oppose tax increases
A nominal increase in spending to a record $842 billion is planned for the Department of Defense. According to the White House, this is a nominal increase of 3.2 percent compared to the 2022 budget. In addition, more than 6 billion dollars (around 5.7 billion euros) are earmarked for support for Ukraine, the NATO defense alliance and European ones partner states. “I will not allow the needs of the intelligence community and our military, which help ensure our security, to be cut short,” Biden said in his speech.
Biden’s 2024 budget includes an additional $6 billion in support for Ukraine
However, it is considered impossible that the budget will pass Congress in this form. In the USA he is the master of the household. Because the opposition Republicans have held a majority in the House of Representatives since the midterm elections last November, Biden’s Democrats will have to make compromises. Republicans want to present their own budget plans with a focus on spending cuts. US House Speaker Kevin McCarthy ruled out new taxes.
USA threatens insolvency
Last year, the United States had a budget deficit of 1.38 trillion (1.3 trillion euros). In January, the country officially reached its committed debt ceiling of $31.38 trillion. For months, Democrats and Republicans have been arguing about how to avert an impending insolvency of the country.
ww/mak (dpa, afp, rtr)
