Joe Biden’s Proposed Budget Would Hike Spending, Raise Taxes, and Further Inflate the National Debt
The national debt has reached levels not seen since the end of World War II, but Democratic presidential nominee Joe Biden is calling for a combination of spending increases and tax hikes that will require trillions of dollars of additional borrowing in the next 10 years.
Biden is calling for more than $3 trillion in new taxes that would be imposed primarily on corporations and the wealthiest Americans. But two recent analyses of Biden’s spending plans agree that his proposals would not come close to paying for themselves over 10 years. If enacted, Biden’s plans would push federal spending to higher highs while also adding to the national debt—which is already on pace to eclipse the size of the entire American economy next year.
The Penn Wharton Budget Model, a nonpartisan organization within the University of Pennsylvania’s business school, crunched the numbers and concluded that Biden’s proposed tax increases would cost Americans about $3.4 trillion over 10 years. To get there, Biden would repeal some of President Donald Trump’s tax cuts for high earners, raise income taxes on the very highest earners, tax capital gains at the same rate as other income, raise the corporate tax rate, and institute a series of changes to the payroll taxes that fund mandatory spending on entitlements like Social Security.
Cumulatively, Biden’s tax plans would not raise taxes on households that earn less than $400,000 per year, the Wharton analysis concludes, though lower-earning households would likely see knock-on effects like “lower investment returns and wages as a result of corporate tax increases.”
Those huge tax increases, however, wouldn’t be sufficient to cover the cost of the new spending Biden has proposed. The Wharton analysis says Biden plans to hike spending by $5.35 trillion over 10 years, with the largest piles of new federal outlays going toward education ($1.9 trillion) and infrastructure ($1.6 trillion). Biden has also called for $1.6 trillion in new health care spending—mostly by expanding the Affordable Care Act’s health insurance subsidies and lowering the eligibility age for Medicare from 65 to 60—but his campaign plans to offset some of that new spending by saving money on the federal government’s purchases of prescription drugs.
If enacted—and that,
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