US President Joe Biden and his administration have been aggressively advocating for increased taxes on billionaires and multi-millionaires in the United States. Recently, the 80-year-old Democrat reiterated his commitment to this major change in the budget via a post on social media platform X (formerly Twitter). He succinctly wrote, "it's time billionaires paid at least a 25% minimum tax." The post followed close on the heels of the US President's address at Prince George's Community College in Maryland, where he stressed the 25 per cent tax on billionaires as part of his explanation of what "Bidenomics" is, Times Now News reports.
But who would the increased tax affect? And what would its impact on the US economy be? Why the push for greater taxes on billionaires? Joe Biden has often spoken about the skewed tax system in the US. In a statement last year, the White House said that according to the present law, wages are taxed, while income growth from investments is not. As a result, when a worker in the US earns a dollar of wages, that is taxed.
However, when a billionaire earns income because their investments increase in value, that gain is often not taxed. The US' imbalanced tax code means many millionaires and billionaires pay lower tax rates than middle-class workers. In his latest address at Maryland, Joe Biden said, "in the pandemic, we have gone from about 740 billionaires in America to 1000. These billionaires pay an average of less than 8 per cent in federal taxes on a yearly basis. They pay a lower federal tax rate than a firefighter, a teacher, or a cop." The President's push for 25 per cent taxes is for greater fairness in this regard. Impact on the US' deficit Earlier this year, the White House, in a press release, said that the budget that Joe Biden is proposing is expected to cut the US' deficit by nearly $3 Trillion over a period of 10 years.
The proposed minimum tax on billionaires would contribute to this. Following the Joe Biden administration's move to levy a minimum tax of 15 per cent on corporate, the US deficit fell by $350 billion in 2021, and was projected to fall by a further $1.5 trillion. Further, the increased flow into the government coffers through increased taxes would to improve Medicare Hospital Insurance (HI) Trust Fund Solvency by at least 25 years.
