President Biden has released an ambitious budget plan this election year that increases tax revenue from corporations and high-net-worth individuals and seeks a substantial amount of extra funding for the IRS.
While many of the measures included in the Biden administration’s proposed budget for fiscal 2025, unveiled March 11, may be politically impossible to pass at the moment, they reflect a core theme laid out by Biden in his State of the Union address March 7 of creating a tax system that “rewards work, not wealth.”
The administration projects that the government will be able to pay for a temporary expansion of the child tax credit, provide a subsidy for first-time homebuyers, and protect Social Security and Medicare from insolvency by, in part, raising the corporate statutory and minimum tax rates, quadrupling the stock buyback excise tax, and instituting a long-sought minimum tax on wealthy individuals.
In total, the Biden administration estimates that its policies would raise revenue by $5 trillion and reduce the deficit by $3.3 trillion over 10 years, although the plan adds approximately $16 trillion to the national debt in the same period.
A crucial determinant in Biden’s agenda involves a request for additional funding for the IRS on top of the extra funds the agency received as part of the Inflation Reduction Act.
The president’s proposed budget calls for $104.3 billion in additional mandatory funding for the IRS over 10 years, which would go primarily toward ramping up enforcement efforts and includes the reinstatement of approximately $21.6 billion of mandatory funding that was rescinded as part of an agreement last year between Biden and former House Speaker Kevin McCarthy to suspend the debt ceiling.
According to Treasury’s green book explanation of the administration’s tax proposals, released the same day, $58.9 billion of the additional IRS funding would be allocated to enforcement, $23.8 billion to technology and operational support, $17.7 billion to taxpayer services, and $3.9 billion to the agency’s modernization efforts.
The budget proposal asks for the IRS’s annual budget to be set at $12.3 billion, the same as fiscal 2023, and $1.8 billion less than what the Biden administration requested last year.
“The president’s vision of progress, opportunity, and fairness is in stark contrast to congressional Republicans, who have repeatedly fought to slash critical programs the American people count on and increase the deficit by trillions of dollars with giveaways to big pharma, the wealthy, and big corporations,” Office of Management and Budget Director Shalanda Young said in a background call with reporters March 11.
Young criticized a budget resolution proposed by House Republicans March 7 for its lack of detail.
While the GOP argues that its plan would balance the budget in a decade, Democrats have said it ignores the potential $3 trillion cost of fully extending the Tax Cuts and Jobs Act and doesn't disclose possible cuts to social programs.
“Congressional Republicans give us their top line, which have rosy economic numbers . . . and hide behind high-level talking points about balancing. Well, who are you hurting?” Young said.
Republicans attacked Democrats for the level of spending increases in Biden’s proposed budget.
“The Biden budget proposes the highest sustained levels of borrowing and spending in U.S. history and nearly $5 trillion in new taxes on American families, all while adding more than $16 trillion to our public debt,” House Budget Committee Chair Jodey C. Arrington, R-Texas, said in a statement.
“President Biden is fond of saying, ‘Show me your budget and I’ll show you your priorities.’ The President’s budget demonstrates his unwavering commitment to taking more of ‘We the People’s’ hard-earned money to pay for his vast and radical expansion of the federal government,” Arrington said.
The release of the administration’s budget proposal came the same day former President Trump, who holds a slight lead over Biden in the polls, made an appearance on CNBC highlighting his own economic agenda.
In addition to reiterating his support for a blanket tariff on imports, Trump suggested possibly looking into entitlement reform.
“There’s a lot you can do . . . in terms of cutting, also the theft, and the bad management of entitlements,” Trump said.
Doug Sword contributed to this article.