Tax multinationals and billionaires: Joe Biden will reiterate these campaign promises this Thursday, March 7, in his annual State of the Union speech and will drive the point home with new measures such as the taxation of private planes.
The Democratic president will outline “his plans to reduce costs and create a fairer tax system,” said his main economic adviser, Lael Brainard, during a conference call.
The president’s traditional annual speech to Congress will this year have the feel of an electoral campaign. With his predecessor and probable rival for the November presidential election, Republican tycoon Donald Trump, in his sights. Joe Biden will once again argue in favor of raising the corporate tax rate, from 21 to 28% – which would remain lower than the 35% applied before Donald Trump’s tax reform in 2017.
“President Biden is fighting to make the tax system fairer while Republicans continue to promote tax cuts for the wealthy and big businesses,” the White House said in a statement. Joe Biden wants, among other things, to eliminate tax deductions for multimillion-dollar bonuses granted to certain CEOs. He will also revive the idea of taxing billionaires up to 25%.
“Lower the costs”
“President Biden is fighting to ensure that our tax code rewards work, not wealth,” assured Lael Brainard. The Democrat also intends to attack private planes, and eliminate “a tax break which grants preferential treatment to business planes, compared to commercial planes”, indicated the White House.
As a bonus, he plans to increase the tax on fuel for these planes. However, no environmental concerns are mentioned in this proposal. He will also once again attack “Big Pharma”, the name given to the large pharmaceutical groups, which he accuses of outsourcing jobs to pay less taxes in the United States.
Beaten in the polls by nearly three years of high inflation, the president continues to put forward his measures to restore purchasing power to Americans. Particularly for middle-class and less well-off households. “In his State of the Union address, you will hear President Biden talk about his efforts to cut costs and crack down on unwanted fees,” Lael Brainard said.
Credit card
“Reducing costs for working families is his economic priority,” she added. In a country where the use of credit cards is intensive, with banks, but also with various retail brands and even airlines, Joe Biden promises to tackle the costs linked to their use. And will target, as it has been doing for several months, the agri-food industry which, to cope with inflation, reduces the quantities sold but leaves the product at the same price, “shrinkflation”.
The president “will also talk about important new measures aimed at reducing housing costs”, said Lael Brainard, while the “American dream” is being undermined by the difficulties encountered by American households in becoming homeowners.
These proposals, however, are unlikely to see the light of day, because even if Joe Biden is re-elected in November, he would need to have a Democratic majority in the Senate and the House of Representatives, which is far from certain. The Biden administration thus failed to ratify the global corporate taxation project, although adopted in October 2021 by OECD countries. “The president will present a budget next week that will reduce the deficit by $3,000 billion over 10 years,” Lael Brainard also underlined. An additional snub to Donald Trump, whose 2017 tax reform caused the debt to jump.