USA
Biden wants higher taxes for the rich and corporations
US President Joe Biden has presented his budget for 2024. photo
© Matt Rourke/AP/dpa
The US President presents his plans for the budget – and wants to make the country’s rich more financially responsible. Does the project have a chance in Congress?
US President Joe Biden wants to tax companies and the super-rich more heavily. The government’s draft budget published on Thursday provides, among other things, that people with assets of more than 100 million US dollars 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. Further tax increases for companies are planned. It is considered impossible that the draft will pass Congress in this form.
“No billionaire should pay less tax than someone who works as a teacher or firefighter,” Biden said in a speech on the proposed budget in Philadelphia. “We must ask the richest and largest companies to pay their fair share.”
The budget also includes a nominal increase in Department of Defense spending to a record $842 billion. According to the White House on Monday, this is a nominal increase of 3.2 percent over the 2022 budget. This means that high inflation has not yet been taken into account. In addition, more than 6 billion dollars are earmarked to support Ukraine, the NATO defense alliance and European partner countries.
Debt ceiling reached
“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.
The draft envisages total spending of around $6.9 trillion. The budget deficit would therefore be around $1.8 trillion – higher than expected. The draft is the first step in tedious budget negotiations, which usually drag on for months. The power to pass the budget rests with Congress. However, the Democrats lost their majority in the House of Representatives in the midterm elections last November. This means that the draft in this form has no chance of being passed.
However, it is likely to further fuel the dispute over raising the debt ceiling. In the USA, Congress sets a debt ceiling at irregular intervals and thus determines how much money the state can borrow. The current debt ceiling has now been reached and the Ministry of Finance has to tap into the reserves. Among the Republicans in the House of Representatives, some hardliners are blocking the issue. Without an increase, there is soon a risk of non-payment.
