President Biden has pitched an array of tax hikes targeting corporations and wealthy Americans, but the steeper levies could weigh on the already-fragile U.S. economy, according to the Tax Foundation.
Findings from the Tax Foundation, a group that advocates for lower taxes, found the higher taxes laid out in Biden’s sweeping budget blueprint for federal spending in fiscal 2025 would reduce economic output by 2.2% in the long run, slash wages by 1.6% and kill about 788,000 full-time equivalent jobs.
The policies outlined in the plan would “make the tax code more complicated, unstable, and anti-growth, while also expanding the amount of spending in the tax code for a variety of policy goals not related to revenue collection,” the report said.
As part of the proposal, Biden called for a 25% minimum tax rate on households worth more than $100 million, raising the capital-gains tax rate, quadrupling the corporate stock buyback tax to 4%, raising the corporate tax rate to 28%, increasing the Medicare tax paid by wealthy Americans, implementing a global minimum tax on multinational corporations and closing the carried interest loophole used by private equity and hedge fund managers.
Altogether, the tax increases would reduce the federal deficit by about $3 trillion. Money from the newly generated revenue would also help to pay for expensive new programs floated by the president, including a monthly tax credit to help some homeowners offset steep mortgage payments, subsidies for child care and lower prescription drugs.
In the case of the capital gains tax, the proposed changes would “push the United States beyond international norms,” according to the Tax Foundation.
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