Biden’s Budget Calls for Tax Increases on Corporations and the Wealthy

The budget, which would cut the deficit by $3 trillion over the next decade, reinforces Biden’s efforts to counter Republican tax proposals that Democrats deride as giveaways to the wealthy.

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President Biden previewed some of the new tax proposals in his State of the Union address last week.

The budget that President Biden released on Monday projects to cut deficits by $3 trillion over a decade, and it does so with an approach that has become familiar: tax increases for companies and the wealthy.

The president previewed several of the proposals in his State of the Union speech last week and contrasted them with those of Republicans, who have called for extending most of the $2 trillion of tax cuts that former President Donald J. Trump signed into law in 2017. For Mr. Biden, tax policy has been at the center of his efforts to make the economy more equitable and to counter Republican tax proposals that Democrats deride as giveaways to the wealthy.

“Does anybody really think the tax code is fair?” Mr. Biden asked during his address last week.

Overall, Mr. Biden is proposing $5 trillion in additional taxes on corporations and high earners over the next decade. Here’s what those increases would entail:

Corporate tax increases

The budget employs a mix of approaches to make American corporations pay more in federal taxes. That includes raising the corporate tax rate to 28 percent from 21 percent, which is the level that was set by the 2017 Tax Cuts and Jobs Act.

Mr. Biden also calls for increasing what’s known as the corporate minimum tax to 21 percent from 15 percent. That tax, which was passed by Democrats in 2022, applies to corporations that report annual income of more than $1 billion to shareholders on their financial statements but use deductions, credits and other preferential tax treatments to reduce their effective tax rates well below the statutory 21 percent. White House economists estimate increasing the tax could yield $137 billion in new tax revenue over a decade.

The president would also quadruple a 1 percent surcharge on corporate stock buybacks. That tax, which was also passed along party lines in 2022, would increase to 4 percent under Mr. Biden’s proposal.

The White House also set its sights on executive pay, denying corporations deductions for all compensation associated with employees that earn more than $1 million. That goes beyond current tax laws, which only denies such deductions for top executives.

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