Joe Biden

FACT SHEET: President Biden Is Fighting to Reduce the Deficit, Cut Taxes for Working Families, and Invest in America by Making Big Corporations and the Wealthy Pay Their Fair Share

March 07, 2024

President Biden is fighting to make the tax system fairer while Republicans continue to push tax cuts for the wealthy and big corporations. The President's plan delivers tax cuts for families with children and working Americans, invests in America, and reduces deficits by trillions of dollars by enacting a new billionaire minimum tax and cracking down on multinational companies shifting jobs and profits overseas.

Since taking office, President Biden has fought to build a fairer tax system that rewards work, not wealth; asks big corporations and the wealthy to pay their fair share; and requires all Americans to play by the same rules and pay the taxes they owe. Despite Republican opposition, President Biden secured historic legislation to make our tax code fairer—from enacting a 15% corporate minimum tax so that billion-dollar companies can't get away with paying $0 in federal income taxes to giving the Internal Revenue Service (IRS) the tools it needs to make wealthy tax cheats pay the taxes they owe.

President Biden will fight to stop Republican plans to add trillions to the deficit with tax cuts skewed to big corporations and the wealthy—doubling down on their failed trickle-down tax cuts that already increased the nation's debt by trillions of dollars. Republicans have proposed making all of President Trump's tax cuts permanent, while refusing to pay for them by increasing taxes on big corporations or the wealthy. Instead, they would rather add trillions to the national debt than take back even one dollar of the $150 billion annual rate cut corporations received under President Trump. Their plan would add more than $3 trillion to deficits over 10 years, while providing tax cuts worth $175,000 per year to the top 0.1 percent of Americans that have incomes over $4.5 million. 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. And he believes that any extensions should be paid for by asking big corporations and the wealthy to pay their fair share.

While big corporations and the wealthy will pay more in taxes under President Biden's policies, President Biden opposes tax increases on middle-class families. He has pledged that under his Administration, no one earning less than $400,000 will pay an additional penny in federal taxes—not one penny.

Making Big Corporations Pay Their Fair Share

President Biden has secured major reforms to crack down on big corporations paying little or nothing in taxes and on stock buybacks that provide large, low-tax payouts to wealthy investors and CEOs. President Biden's tax plan would build on this progress by finally making big corporations pay their fair share in taxes:

  • Raising the corporate tax rate to 28% and the corporate minimum tax to 21%. President Biden believes large corporations should pay their fair share, and is committed to reversing the massive tax giveaway to big corporations that Republicans enacted in 2017. President Biden would raise the corporate tax rate to 28%. He would also ensure that billion-dollar corporations pay at least 21% of their income in taxes, building on the Inflation Reduction Act's (IRA) corporate minimum tax.
  • Cracking down on tax avoidance by large multinationals and Big Pharma. For too long, big multinationals have moved jobs overseas and stashed their profits in tax havens. The 2017 Republican tax giveaway failed to fix these problems, instead giving windfalls to Big Pharma. President Biden negotiated a historic agreement with over 130 countries that would enable the U.S. and its partners to ensure Big Pharma and other multinationals pay at least a minimum tax rate. He is calling on Congress to implement the agreement with a 21% rate on multinationals, with almost one-fifth of the revenue coming from Big Pharma, according to analysis it funded.
  • Denying corporate tax breaks for multi-million-dollar executive compensation. Executive pay has skyrocketed in recent decades, with CEO pay averaging more than 300 times that of a typical worker in 2022. The corporate tax cuts in the 2017 Republican tax law only made this problem worse, giving executives huge raises while doing nothing for low- and middle-income workers. When corporations give huge pay packages to their executives, President Biden believes they don't deserve a tax break. That's why he's proposing to deny corporations a tax deduction when they pay over $1 million to any employee.
  • Quadrupling the stock buyback tax. In response to the surge in corporate stock buybacks after the Trump tax cuts, President Biden signed into law a surcharge on stock buybacks that encourages businesses to invest in their growth and productivity as opposed to funneling tax-preferred profits to wealthy and foreign shareholders. President Biden would quadruple the stock buyback tax from one percent to four percent to address the continued tax advantage for buybacks and encourage corporations to invest in productivity and the broader economy rather than windfalls for investors.
  • Cracking down on corporate jet loopholes. President Biden believes corporations and wealthy people who use corporate and private jets should pay their fair share. That's why he would eliminate a tax break that gives preferential treatment to corporate jets, compared to commercial aircraft. He would also increase the fuel tax on corporate and private jet travel, so that corporate executives and other wealthy Americans pay their fair share for the use of airspace and other public services related to air travel.

Making the Wealthy Pay Their Fair Share

President Biden has already secured funding for the Internal Revenue Service (IRS) that is enabling it to crack down on wealthy and big business tax cheats. The IRS has used this funding to collect more than $500 million in unpaid taxes from fewer than 2,000 delinquent millionaires, launch enforcement action against 25,000 millionaires who have not filed a tax return since 2017, and crack down on high-end tax evasion like deducting personal use of corporate jets as a business expense. In total, the IRS is projected to collect hundreds of billions of dollars in additional revenue over the next decade thanks to this investment. President Biden's tax plan would build on this progress with reforms that will finally make the wealthiest Americans pay their fair share:

  • Requiring billionaires to pay at least 25 percent of income in taxes. Billionaires make their money in ways that are often taxed at lower rates than ordinary wage income, or sometimes not taxed at all, thanks to giant loopholes and tax preferences that disproportionately benefit the wealthiest taxpayers. As a result, many of these wealthy Americans are able to pay an average income tax rate of just 8 percent on their full incomes—a lower rate than many firefighters or teachers. To finally address this glaring inequity, the President is proposing to levy a 25 percent minimum tax on the wealthiest 0.01 percent, those with wealth of more than $100 million.
  • Requiring the wealthy to pay their fair share toward Medicare to extend Medicare solvency. President Biden has a plan to protect Medicare for future generations by making the wealthy pay their fair share instead of cutting benefits or raising costs for beneficiaries. He would modestly increase the Medicare tax rate on income above $400,000, close loopholes in existing Medicare taxes that allow some high-paid professionals and wealthy business owners to avoid the tax, and direct all Medicare tax revenue into the Medicare Hospital Insurance (HI) Trust Fund as was originally intended. These reforms would help extend the life of the Medicare HI Trust Fund.
  • Ensuring that the IRS can continue to collect taxes owed by wealthy tax cheats. After years of chronic underfunding, President Biden's IRA provided the IRS with the resources it needs to finally crack down on wealthy tax cheats and corporations who too often avoided paying their lawfully owed taxes. The IRS is already using these resources to collect hundreds of millions of dollars in unpaid taxes from delinquent millionaires, recoup taxes from thousands of millionaires who did not fulfill their basic civic duty by filing a tax return, and crack down on high-end tax evasion like deducting personal use of corporate jets as a business expense. At the same time, the IRS is improving customer service, modernizing IT, and protecting small businesses and taxpayers earning less than $400,000 from increased audit risk. President Biden would raise hundreds of billions of dollars by protecting IRA funding from Republican cuts and extending it after it is exhausted so that the IRS can continue to build on this progress and crack down on wealthy tax cheats.

Cutting Taxes for Working Families and the Middle Class

President Biden's tax cuts cut child poverty in half in 2021 and are saving millions of people an average of about $800 per year in health insurance premiums today. Going forward, in addition to honoring his pledge not to raise taxes on families earning less than $400,000 annually, President Biden's tax plan would cut taxes for middle- and low-income Americans by $765 billion over 10 years, including by:

  • Increasing the Child Tax Credit for 66 million children. President Biden's expansion of the Child Tax Credit cut child poverty nearly in half to a historic low and narrowed racial disparities in access to the credit in 2021, but Congressional Republicans insisted on raising taxes on families with children by letting it expire. The President would restore the expanded Child Tax Credit, lifting 3 million children out of poverty and cutting taxes by an average of $2,600 for 39 million low- and middle-income families that include 66 million children. President Biden would also permanently ensure that the kids of parents earning low wages receive the full Child Tax Credit, making 18 million children newly eligible for the full credit. The Child Tax Credit expansion would support 2 million children living with a caregiver who is at least 60 years old. It would also provide breathing room for day-to-day expenses by allowing families to receive their tax credit through monthly payments.
  • Cutting taxes for 19 million working-class Americans. By strengthening the Earned Income Tax Credit for low-paid workers who aren't raising a child in their home, the President's plan would cut taxes by an average of $800 per year for 19 million working individuals or couples. That includes 2 million older workers age 65 and older and 5 million young adults age 18 to 24 who would be newly eligible for the credit.
  • Making lower health insurance premiums permanent. With enrollment in affordable health coverage at an all-time high, the President is committed to building on the remarkable success of the Affordable Care Act (ACA) and IRA by making permanent his expansion of the premium tax credit, which is saving millions of people an average of about $800 per year in health insurance premiums this year.

In addition, President Biden's plan will extend all middle-class tax cuts; as the President has repeatedly promised, he will not raise taxes on anyone making less than $400,000 per year. He will fully pay for these extensions with additional reforms to make the wealthy and corporations pay their fair share, so that they do not add to the debt. And he opposes extending tax cuts or restoring tax breaks for those making more than $400,000 per year.

The Congressional Republican Plan: Adding Trillions to Deficits With Tax Cuts Skewed to the Wealthy and Big Corporations

Republicans are working to make all of former President Trump's tax cuts permanent, adding more than $3 trillion to the debt over the next 10 years with unpaid-for tax cuts that are skewed to the wealthy and large corporations. On top of extending the Trump tax cuts for the wealthy and protecting tax cuts for big corporations, the Congressional Republican tax plan would:

  • Allow the wealthy and big corporations to avoid paying their fair share. Congressional Republicans have consistently tried to repeal President Biden's policies that are making big corporations pay at least 15 percent of income in tax and ensuring wealthy tax cheats pay the taxes they owe. By repealing President Biden's corporate minimum tax, Congressional Republicans would enable some billion-dollar corporations to go back to paying no federal income tax at all. And by gutting President Biden's investment in enforcing our tax laws, Congressional Republicans would take us back to a two-tiered tax system where hard-working Americans pay the taxes they owe, and wealthy tax cheats are able to evade their tax obligations under the law.
  • Raise taxes on millions of middle-class and working families. Republican efforts to repeal President Biden's improvements to the ACA premium tax credits would increase taxes by an average of about $800 for millions of Americans, especially older people and self-employed people. The Republican plan would also repeal the IRA's clean energy tax credits, which would raise taxes by thousands of dollars for families installing a heat pump or solar panels.
  • Give windfall tax cuts to billionaires. Congressional Republicans have proposed legislation to give a new tax cut skewed to billionaires by allowing the wealthiest 0.1% of Americans—those with assets worth more than $13.6 million per person ($27.2 million per couple)—to pass on wealth to their heirs entirely tax free. Congressional Republicans are fighting to repeal the estate tax—even though it does not apply to middle-class families—in order to give more tax relief to billionaire families.

Joseph R. Biden, FACT SHEET: President Biden Is Fighting to Reduce the Deficit, Cut Taxes for Working Families, and Invest in America by Making Big Corporations and the Wealthy Pay Their Fair Share Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/370563

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