Opponents of the tax increase point out that the wealthiest Americans already pay a large share of the taxes the IRS collects. Those who support the tax increases maintain corporations and the wealthy should pay more.

The proposal lists another $1.4 trillion in revenue raised over the next decade through other tax increases that are meant to preserve Biden’s pledge to not hike taxes on people earning less than $400,000.

The 156-page plan proposal includes a minimum 20% tax on the incomes of households worth $100 million or more, similar to a proposal Democrats in Congress began debating late last year that failed to clear the Senate.

The proposal unveiled Monday faced immediate criticism from Republican lawmakers.

They noted that deficits well in excess of $1 trillion annually would persist, said higher taxes could hurt growth and objected that additional government spending would feed into inflation.

The budget assumes — with a high degree of uncertainty based on forecasts made last November — that inflation at a 40-year peak will return to normal next year.

“The budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” Biden said in a statement.

The Biden budget foresees cutting annual deficits by more than $1 trillion over the next decade. Those reductions would occur in large part through higher taxes and the expiration of relief spending tied to the coronavirus outbreak that began in 2020.

Among the tax changes is a 28% corporate tax rate and top individual rate of 39.6%, both increases.

But it’s unclear how Biden would get his polices through Congress.

His plans for a new minimum tax on the wealthy would include “unrealized gains,” which are potential profits that exist on paper because the underlying asset has yet to be sold.

The result is that the special tax on people worth more than $100 million is unlikely to become law any time soon, said John Gimigliano, head of federal legislative & regulatory services at KPMG.

On top of that, many economists and tax experts say that the wealthiest Americans already pay significant amounts of taxes.

In an opinion piece published in January in The Atlanta Journal-Constitution, for instance, Andrew Wilford, a policy analyst with the National Taxpayers Union Foundation, wrote that Democrats “have continued to point fingers at a familiar scapegoat — the wealthy — claiming America’s budget woes would evaporate should they simply pay their ‘fair share.’ But the latest data on federal revenues clearly puts the lie to this claim.”

Wilford wrote that “the individual income tax, in particular, skews overwhelmingly wealthy, with the top 1% shouldering just more than 40% of the income tax burden.”

And in a June 2021 Wall Street Journal opinion column published in The Atlanta Journal-Constitution, former Senate Banking Committee Chairman Phil Gramm and Mike Solon, a partner with U.S. Policy Metrics, wrote: “In taxing wealth, we eat the nation’s seed corn.

“That may be worth it to politicians who want power, but for most Americans a wealth tax, whether they have wealth or not, would mean fewer jobs, lower wages and less opportunity for human flourishing.”

— Atlanta Journal-Constitution staff reports were used in this article.

Balanced coverage

Taxes and the president’s budget plan

President Joe Biden has proposed a budget plan for fiscal 2023. The cost and how to pay for the proposal has ignited a debate about taxes. The Atlanta Journal-Constitution is committed to following the proposal and explaining how it could fund the government.

Biden’s plan calls for a higher tax rate on corporations and on the top tax tier for individuals. The proposal includes a minimum 20% tax on the incomes of households worth $100 million or more.

Those who oppose increasing taxes point out that the wealthiest Americans pay a large share of the taxes the IRS collects. According to the Tax Foundation, the top 1% of earners pay more than one third of income taxes.

Those who support the tax increases say corporations and the wealthy should pay more. They make their case by arguing that tax policies over the past couple of decades have favored companies and the wealthy, and that less wealthy Americans pay a greater percentage of their income in taxes.

The AJC will report on all sides of this debate and will work to keep you informed about the costs, benefits and risks. We want to answer your questions and hear from you about what you’d like to know about these proposals. Email Managing Editor Leroy Chapman Jr. at Leroy.Chapman@ajc.com.

A closer look

Under the budget plan outlined Monday by President Joe Biden, the deficit would be $1.15 trillion.

The plan allocates $795 billion for defense and $915 billion for domestic programs.

The remaining balance would go to mandatory spending such as Social Security, Medicare, Medicaid and net interest on the national debt.