Biden announces a minimum tax rate of 20% for the richest people

U.S. President Joe Biden on Monday unveiled his initiative for the country’s public accounts for fiscal year 2023, which begins in October. The document envisions a budget of $ 5.79 billion, up from $ 5.85 billion this year. Among the innovations in the budget, as described in detail by the White House, are tax increases for wealthier families, corporations, and higher defense spending.

In a statement, Biden said his administration was “on track to reduce the federal deficit by more than $ 1.3 trillion this year,” which is “the largest annual deficit reduction in U.S. history.” “This is a direct result of my administration’s strategy to bring the pandemic under control and to grow the economy from the bottom up and the middle,” the president said.

This will be partly possible by raising the corporate tax rate from 21% to 28%, which is opposed by the moderate wing of Democrats in Congress. “Taxpayers have been paying the price for decades for a tax system that has rewarded multinational corporations that have taken away jobs and profits,” the White House said in a document released Monday. The U.S. government has linked the decision to a multinational agreement that imposes a global corporate tax rate of 15%, sealed by more than 130 countries. To increase this tax, Biden CEO said a package of additional measures has been added to ensure that multinational companies do not use tax havens.

The executive also offers a new minimum tax of 20% for the richest people in the country, with more than $ 100 million in assets. The document stipulates that the tax code currently allows for “special treatment” for wealthier families. This special treatment, combined with sophisticated tax planning and gigantic shortcomings, allows many wealthy people around the world to pay lower income tax rates than middle-class families. This minimum rate applies to only 0.01% of households that exceed the $ 100 million threshold, but half of what is expected from tax increases comes from households with more than $ 1,000 million.

In terms of spending, with the Russian invasion of Ukraine, Biden’s chief executive has prepared a budget of $ 31,000 million for new defense spending, which will increase the national defense budget to $ 813,000 million. Nearly $ 7,000 million has been allocated to NATO and its eastern flank in the wake of the Ukraine war.

Similarly, the budget proposal includes $ 9.9 billion to strengthen the capacity of the country’s healthcare systems to “improve immunization programs” against Covid-19, and $ 81.7 billion from future pandemics for health security over the next five years. The executive proposal is expected to be sent to Congress on Tuesday, which must then approve it. It is usually presented in May, but this year it is so raised that it did not coincide with the November legislative elections.

In U.S. public finances, discretionary spending is government spending incurred through a bill of appropriations that must pass through the legislature.