WASHINGTON ― Joe Biden would like to remind you that he favors higher taxes on corporations and the wealthy ― and on their fancy jets, too.
The president will make tax hikes on corporations and the wealthy a core part of his economic agenda, the White House said Thursday ahead of the final State of the Union Address of Biden’s first term.
“President Biden is fighting to make our tax code reward work, not wealth,” White House economic adviser Lael Brainard told reporters on a conference call previewing the speech.
A fact sheet from the White House says Biden wants to raise the corporate tax rate from 21% to 28%, to take away an unspecified tax deduction for firms that pay executives more than $1 million, to eliminate preferential tax treatment for corporate jets and to increase a fuel tax on both corporate and private jet travel.
Higher taxes on corporations and the wealthy are broadly popular ― and a clear economic policy difference between Democrats and Republicans that Biden will emphasize during his speech at the Capitol.
The U.S. faces a crossroads in tax policy when household cuts enacted by former President Donald Trump in 2017 expire at the end of next year. If Congress does nothing, then almost everybody’s taxes will go up.
Republicans want to extend all of the tax cuts, having only made them temporary as a budget gimmick that reduced the cost of their tax legislation in budget forecasts. On paper, the law was projected to add nearly $2 trillion to the deficit over 10 years. A full extension would cost more than $3 trillion.
Biden opposes any tax hikes on households earning less than $400,000, the White House said, repeating a tax pledge Biden campaigned on in 2020.
“President Biden supports continuing tax cuts for families making less than $400,000, but opposes extending tax cuts or restoring tax breaks for those making more than $400,000 per year,” the White House said in its fact sheet.
Biden would use higher taxes on corporations in order to offset the cost of continuing the tax cuts for families, and then some ― the White House said Biden would release a budget proposal next week that it estimates would reduce federal budget deficits by $3 trillion over 10 years.
The Biden administration has already ramped up enforcement of current tax laws, with the IRS using new resources from the Inflation Reduction Act of 2022 to crack down on wealthy households that underreport their business income. The IRS said last month it expects to bring in more than $500 billion over a decade as a result of the increased enforcement.
That law also included a 1% tax on stock buybacks, which public companies use to inflate the value of their stock (and executives’ own pay, since they typically receive shares as part of their compensation). Biden wants to quadruple the tax to 4%.
The IRS also said last month it would ramp up audits of corporate executives who use company jets for personal travel.
For Republicans, canceling the extra IRS money has been a top priority. House Speaker Mike Johnson (R-La.) pushed for IRS funding cuts as part of government funding legislation Congress passed earlier this year.