The campaign for former President Donald Trump, along with other Republicans and critics, has taken aim at President Biden over his recent budget proposals, claiming that they include the “largest tax HIKE ever.” The tax increase is part of Biden’s $7.3 trillion budget plan for fiscal year 2025, which includes a $4.9 trillion tax hike and calls for an “unprecedented $86.6 trillion in spending” over ten years, according to Republicans on the House Budget Committee.
A Trump campaign spokesperson argued that Biden’s plan “would take nearly $40,000 dollars away from the average American family, who is already losing thousands every year due to Biden’s record-high inflation crisis.” The campaign further stated that the “bloated” budget does not address the priorities of the American people and is “defined by massive spending increases and tax hikes on Americans.”
Citing a figure provided by Richard Stern, the director of the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation, Trump’s campaign claimed that the tax hikes amount “to almost $36,000 in tax hikes per American family.” Brian Riedl, a senior fellow at the Manhattan Institute, argued that roughly half of the revenue generated by the tax hikes would be “plowed into … new entitlement expansions” instead of being used to cut the deficit.
The Trump campaign spokesperson stated that if re-elected, the former president would advocate for more tax cuts for all Americans and reinvigorate the energy industry to bring down inflation, lower the cost of living, and pay down the national debt.
Biden’s tax increase proposal would dramatically raise the rates paid by corporations and wealthy Americans, including 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% from 21%, and implementing a global minimum tax on multinational corporations, among other measures.
A report by the Tax Foundation found that the higher taxes laid out in Biden’s plan 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 tax increases would reduce the federal deficit by about $3 trillion, with the newly generated revenue also helping to pay for new programs proposed by the president.
The topic of tax policy is likely to be a source of contention during the 2024 general election, as Trump has pledged to make his tax cuts permanent if re-elected, while the expiration of the Trump-era Tax Cuts and Jobs Act at the end of 2025 could lead to steeper tax bills for millions of Americans unless certain provisions are extended or made permanent.
