Biden Announces Largest Tax Hike in 30 Years

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Biden Announces Largest Tax Hike in 30 Years
Biden Announces Largest Tax Hike in 30 Years
16 March, 09:41EconomyPhoto: dw.com
For the first time since the early 1990s, the Joe Biden administration plans to seriously raise federal taxes. This should reduce the huge budget deficit and help the authorities implement a new economic stimulus program.

According to Bloomberg sources, Biden intends to end a number of tax breaks introduced by his predecessor, Donald Trump. Thus, the country faces the first serious tax hike since the 1993 Clinton reform.

"It is proposed to increase the corporate tax from 21% to 28%, and to abolish the tax incentives for limited liability companies", - finanz.ru reports.

In addition, the White House wants to increase taxes on the rich, who receive over $ 400,000 a year. Also, the authorities will introduce a tax on income from securities if the owner receives more than $ 1 million from them a year.

If you introduce all the changes at once, then Biden's tax reform will bring $ 2.1 trillion to the budget over 10 years. However, such an increase would be too sharp, so the authorities intend to introduce adjustments gradually. Democratic congressmen said they are ready to approve a $ 510 billion tax hike over 10 years.

Last year, against the backdrop of a pandemic, a record hole in the US budget was formed since World War II. The authorities actively helped the people and business, but the financial result of the year was disastrous: having collected $ 3.42 trillion in taxes in a year, the United States spent $ 6.552 trillion. The 2021 budget is also extremely problematic: it is drawn up with a 40% deficit.

It is becoming more and more difficult for the US Treasury to service the country's national debt in such conditions. Inflation heats up interest rates. If 10 years ago they were 0.6% per year, now they are already more than 1.6%. The Ministry of Finance spends $ 120 billion a month on loan servicing.

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