US President Biden wants higher taxes for the rich and companies

US President Biden wants higher taxes for the rich and companies

Joe Biden arriving in Philadelphia on Thursday

The President outlines his budget plans. However, Congress decides on the budget.

(Photo: Reuters)

Philadelphia 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 greater than $100 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. Further tax increases for companies are planned. It is considered impossible that the draft will pass Congress in this form.

The budget also includes a nominal increase in Defense Department 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 six billion dollars are earmarked to support Ukraine, the defense alliance Nato and European partner countries.

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.

Republicans threaten blockade

However, it is likely to further fuel the dispute over raising the debt ceiling. In the USA At irregular intervals, Congress sets a debt ceiling 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. Both republicans in the House of Representatives, some hardliners are blocking the issue. Without an increase, there is soon a risk of non-payment.

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