Washington, D.C. — The first Biden presidential budget, due to be released Friday, May 28, plans for an increase in the taxes levied on lower- and middle-income families earning less than $400,000 per year, shattering a critical campaign promise that helped the former vice president win the White House in 2020.
An early report on the spending document appearing in Thursday’s New York Times revealed planned tax increases of the kind the president repeatedly foreswore during the 2020 presidential campaign. The plan about to be unveiled anticipates federal spending in the range of $6 trillion, making it the most generously funded program since the end of World War II.
Republicans responding to the Biden plan called it a reality check for anyone who believed the trillions in new spending Biden had planned could be paid for simply by raising taxes on the wealthiest Americans and corporations.
“President Biden’s budget relies on the expiration of middle-class tax cuts in order to achieve a historically high level of tax on Americans,” said the Republicans members of the House Committee on Ways and Means in a statement. “In addition, President Biden’s trillions in wasteful spending will harm regular Americans with higher prices due to inflation—itself a ‘stealth tax’ on regular consumers.”
According to the Times, the Biden budget would – if adopted – led to significant deficits and be heavily reliant on borrowing to finance all the new spending. “Under Mr. Biden’s proposal, the federal budget deficit would hit $1.8 trillion in 2022, even as the economy rebounds from the pandemic recession to grow at what the administration predicts would be its fastest annual pace since the early 1980s.”
In that case, the paper concluded, debt as a share of the economy would by 2024 rise to its highest level in American history, “eclipsing its World War II-era record.” The paper went on to quote anonymous Biden aides as predicting “that even if his full agenda were enacted, the economy would grow at just under 2 percent per year for most of the decade, after accounting for inflation. That rate is similar to the historically sluggish pace of growth that the nation has averaged over the past 20 years.”
Many economists will say raising taxes while coming out of a recession is inflationary and anti-growth. What Biden is asking Congress to approve would, if accepted as written, drive federal spending alone up to the point the government would consume nearly a quarter of the nation’s total annual economic output over the next decade – a figure well above the average for the period following World War II.
The era of big government tax and spend is back, brought to you by Joe Biden – the moderate candidates put up by the Democrats to be president. And if he wants to lead the charge to take total federal spending to just over $8 trillion by 2031 accompanied by annual deficits of more than $1 trillion, it’s frightening to think what Vermont Sen. Bernie Sanders might have done had he won. As is usual with Democrats, Biden won the White House saying one thing and – now that he’s an office – he’s trying to do another.
Peter Roff is a former U.S. News & World Report contributing editor now affiliated with several Washington, D.C. public policy organizations. He appears regularly as a commentator on the One America News network. Reach him by email at [email protected] Follow him on Twitter @PeterRoff.
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