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Here’s what to expect:
Cutting nearly $3 trillion from the national deficit Biden will re-up a State of the Union pledge to trim the national deficit, promising to cut almost $3 trillion over 10 years, with tax hikes on companies and high earners.
The U.S. federal deficit totaled $1.4 trillion in 2023, the Congressional Budget Office said.
Boosting Medicare with taxes
Biden hopes to raise the Medicare tax on income above $400,000 from 3.8% to 5%, and expand the federal government’s ability to negotiate drug prices to keep the healthcare program solvent, the White House said this week.
Buybacks Biden plans to propose quadrupling the 1% tax on stock buybacks that took effect in January, to encourage companies to invest in their growth instead of boosting shareholders.
The White House has said taxing buybacks levels a distortion in the tax system. Dividends, they said, are taxable for many shareholders but share buybacks weren’t taxable until this year. The plan to boost the buyback tax may struggle to move through the U.S. Congress where Republicans control the House.
Childcare, tax credits
Biden will re-up a provision of his 2021 COVID plan that expanded the child tax credit to lower-income families, and reintroduce plans for federal funding for universal pre-kindergarten.
Rail safety
The budget is expected to include millions in new funding for railroad safety measures after a series of high-profile accidents and derailments.
Billionaire minimum income tax
Biden is expected to reiterate his call for a 20% minimum tax on households worth more than $100 million. The White House refers to it as the “billionaire minimum income tax.”
The tax would make sure the wealthiest of Americans do not pay a tax rate lower than firefighters and teachers, Biden said in his budget proposal last year. Several past attempts by Democrats to push such a proposal has failed to move forward in Congress.
(This story has been corrected to rectify reference to debt versus deficit in paragraphs 3-4)
