President Joe Biden will release his $6 trillion budget on Friday, sticking with the tradition of dropping “bad news and unflattering documents” on the last day of the week.
The budget is disgusting and should bother everyone.
Biden wants the government to spend $6 trillion in the 2022 fiscal year. They want to spend $8.2 trillion by 2031.
Can we not? Yes, it involves raising taxes:
Mr. Biden’s plan would raise the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million. He would also change the tax rules for unrealized capital gains held until death.
The effective date for the capital-gains tax rate increase would be tied to Mr. Biden’s announcement of the tax increase as part of his American Families Plan, which includes an expanded child tax credit and funding for preschool and community college. He detailed the plan April 28, and the budget will be released Friday. White House spokespeople didn’t immediately comment.
Congress must still approve any rate changes and retroactive effective dates, and there is already wariness about the full capital-gains tax plan building among some congressional Democrats.
But the tax money won’t be able to pay for everything. So that means we have to borrow!
So all the spending and borrowing will put us at levels we have not seen since World War II. From The New York Times (emphasis mine):
Mr. Biden’s plan to fund his agenda by raising taxes on corporations and high earners would begin to shrink budget deficits in the 2030s. Administration officials have said the jobs and families plans would be fully offset by tax increases over the course of 15 years, which the budget request backs up.
In the meantime, the United States would run significant deficits as it borrows money to finance his plans. Under Mr. Biden’s proposal, the federal budget deficit would hit $1.8 trillion in 2022, even as the economy rebounds from the pandemic recession to grow at what the administration predicts would be its fastest annual pace since the early 1980s. It would recede slightly in the following years before growing again to nearly $1.6 trillion by 2031.
Total debt held by the public would more than exceed the annual value of economic output, rising to 117 percent of the size of the economy in 2031. By 2024, debt as a share of the economy would rise to its highest level in American history, eclipsing its World War II-era record.
The levels of taxation and spending in Mr. Biden’s plans would expand the federal fiscal footprint to levels rarely seen in the postwar era, to fund investments that his administration says are crucial to keeping America competitive. That includes money for roads, water pipes, broadband internet, electric vehicle charging stations and advanced manufacturing research. It also envisions funding for affordable child care, universal prekindergarten, a national paid leave program and a host of other initiatives. Spending on national defense would also grow, though it would decline as a share of the economy.
The New York Times said the budget “suggests Mr. Biden will not propose major additional policies in the budget, or that his budget will flesh plans that the administration has thus far declined to detail.” The documents do not include anything about the unemployment insurance program, money for a public option for health care, or support to lower the Medicare age to 60.
Who knows what else he’ll propose this year.
It’s nothing but big government (again, emphasis mine):
If Mr. Biden’s plans were enacted, the government would spend what amounts to nearly a quarter of the nation’s total economic output every year over the course of the next decade. It would collect tax revenues equal to just under one fifth of the total economy.
In each year of Mr. Biden’s budget, the government would spend more as a share of the economy than all but two years since World War II: 2020 and 2021, which were marked by trillions of dollars in federal spending to help people and businesses endure the pandemic-induced recession. By 2028, when Mr. Biden could be finishing a second term in office, the government would be collecting more tax revenue as a share of the economy than almost any point in modern statistical history; the only other comparable period was the end of President Bill Clinton’s second term, when the economy was roaring and the budget was in surplus.
So you know they’re going to have to raise taxes in other tax brackets.
Biden and his team predict his plan will grow the economy by 2% by 2030, and unemployment will remain below 4% during that time as well.DONATE
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