Repost from The Virginia Star.
President Joe Biden unveiled a new 2023 budget proposal Monday along with major tax increases to help pay for it.
Biden’s budget, which comes in at about $5.8 trillion, is not expected to become law, but presidential budgets help set the legislative priorities for the year to come.
“Budgets are statements of values, and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” Biden said in a statement.
To help pay for his plan, Biden proposed raising the corporate tax rate from 21% to 28%, claiming it will reduce the deficit by a trillion dollars over 10 years.
“My budget will continue that progress, further reducing the deficit by continuing to support the economic growth that has increased revenues and ensuring that billionaires and large corporations pay their fair share,” Biden said.
Biden also proposed a 20% income tax for households worth over $100 million and on the top 0.01% of earners, in large part by taxing unrealized capital gains. An example would be taxing the appreciation of stock even before that stock is sold.
“Let’s say a high‐tech entrepreneur earns $100 million and currently pays $20 million in federal income tax, or 20 percent,” said Chris Edwards, a tax expert at the Cato Institute. “And let’s say her wealth is $2 billion and rises $200 million this year as she grows her company. Apparently, the Biden theory is that her ‘income’ is really $300 million, and she should pay $60 million in annual tax – triple what she currently pays.”
Critics blasted Biden’s tax plan.
“The Biden tax plan is crackers,” Edwards said. “Unrealized gain is not income. It represents the expectation of future income, which should be taxed in the future under a well‐designed tax system. Often, expected future income doesn’t materialize and asset values drop. The stock market is down five percent this year, so our entrepreneur may have negative ‘income’ of $100 million.”