Priority to taxation of the richest Americans, the fight against crime and defense to support Ukraine against the Russian invasion… Joe Biden presented Monday March 28 a draft budget 2023 of nearly 5,800 billions of dollars. The American president considered that this project reflected the values of his administration: “responsibility in terms of budget”, security in the United States and abroad, as well as the need to invest more to remain competitive.
This draft budget, which covers the period from October 1 to September 30, is sent to Congress, which controls the government’s purse strings. It will therefore be subject to amendments to be approved by both chambers where Democratic lawmakers have narrow majorities. A sharp increase in defense spending (+4%) is thus likely to come up against the left wing of the party.
The proposal for a minimum tax on the rich has long been called for by the left wing of the Democratic Party to fight against inequality. “The rich are finally going to pay their fair share,” Joe Biden said at a press conference on Monday. He took the example of firefighters and teachers who suffer higher tax rates than billionaires taking advantage of tax loopholes: “it’s not fair”.
If retained in the final budget, the proposal will apply to the richest 0.01% of households, “those who own more than $100 million, the White House said earlier. And more than half of revenue would come from billionaires alone. The goal is for the wealthiest to pay at least 20% of their total income in income tax.
A similar proposal had already been considered last year as part of the negotiations for the “Build Back Better” social spending plan. But the Biden administration had given up on it in October 2022 to try to save its plan that had finally stalled due to divisions between Democrats. The 2023 budget also plans to raise the corporate tax rate to 28%, canceling the reform adopted under Donald Trump in 2017, which had lowered it to 21%, underlined Joe Biden.
- Crime and firearms
In addition to a rebalancing in terms of taxation, Joe Biden underlined his desire to allocate more resources for security inside and outside the United States. Domestically, the plan includes $3.2 billion to put more police officers in the field and $30 billion for tackling crime.
The Biden administration also wants to provide more resources to fight gun violence with an allocation of $1.7 billion.
Meanwhile, the U.S. budget proposal includes a $6.9 billion allocation for the European Deterrence Initiative, the North Atlantic Treaty Organization (NATO), and “the fight against Russian aggression “, as well as an additional billion in favor of Ukraine. If the budget is adopted by Congress, these funds would be added to other aid already released to kyiv.
The objective of this new aid is to “improve the capabilities and preparedness of American forces, NATO allies and regional partners in the face of Russian aggression”, explained the White House.
Defense Department officials stressed that Russia’s invasion of Ukraine poses “an acute threat” to the world order but, for them, China remains the main strategic risk for the United States.
The White House has also budgeted $1.4 billion for the World Bank’s International Development Association (IDA). “This investment re-establishes the historic role of the United States as the World Bank’s largest donor to support the development of low- and middle-income countries,” the White House said. She notes that contributing to global stability, mitigating climate and health risks is beneficial for the United States and Americans.