Article Summary –
President Joe Biden has criticized a Republican proposal to extend tax cuts for the wealthy and big corporations, originally implemented under former President Donald Trump. In his own budget proposal, Biden has suggested increasing the Child Tax Credit, making Affordable Care Act tax credits permanent, expanding the Earned Income Tax Credit, and increasing the corporate tax rate to 27%. The Republican proposal, in contrast, would make tax cuts for large corporations and wealthy individuals permanent, resulting in significant tax cuts for the top earners and undoing the 15% minimum tax for large corporations included in the 2022 Inflation Reduction Act.
President Joe Biden Slams Republicans’ Tax Cuts for Wealthy
President Joe Biden, on April 15, decried a recent Republican proposal that endorses tax cut extensions for affluent individuals and big corporations, a policy introduced during ex-President Donald Trump’s tenure. Biden argued, in a social media post, that the tax code should compel large corporations and the ultra-rich to pay their fair share.
Biden’s Tax Policies and the Republican Rebuttal
The Biden administration, in a White House statement, lambasted House Republicans for favoring the wealthy in their tax proposals. Biden has suggested several tax amendments in his 2025 budget proposal such as raising the Child Tax Credit, making Obamacare tax credits for insurance premiums permanent, and expanding the Earned Income Tax Credit for families with an income of less than $64,000 annually.
Biden’s proposal also calls for a hike in the corporate tax rate from 21% to 27% and an increase in tax rates for the highest earners. Those with a net worth over $100 million would pay at least 25% tax on their income and would need to include capital gains and other income sources when calculating their taxable amounts.
“Fiscal Sanity to Save America” and its Critiques
The Republican Study Committee, composed of 179 of the 218 House majority members, proposed a budget that aims to retain the tax cuts for large corporations and wealthy individuals. Their proposal, “Fiscal Sanity to Save America,” encourages making the Tax Cuts and Jobs Act provisions, established in December 2017, permanent.
An analysis by the Tax Policy Center reveals that these permanent cuts would yield an average tax cut of $175,000 for those earning over $4.5 million per year. The White House condemned the Committee’s proposal to eliminate the estate tax, affecting those with assets over $13.6 million, and to reverse the 15% minimum tax for large corporations.
The Republican plan, the White House states, not only cuts taxes for billionaires but also threatens to make drastic reductions to Social Security, Medicare, Medicaid, the Affordable Care Act, and other beneficial programs.
Trump’s Economic Policies and Biden’s Outperforming Growth
The Trump tax policy was marketed as a means to boost the economy. Trump stated in a 2017 speech that this tax cut would be “rocket fuel for our economy.” Trump predicted an annual economic growth of up to 6% due to his policies, but these forecasts fell short.
Contrarily, Biden has seen significant economic growth during his presidency, with an average annual growth of 3.4%. The Center on Budget and Policy Priorities, in a March 2024 report, determined that the tax cuts under Bush and Trump were irresponsible.
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