And earn money in America? Biden is on his way to your wallet
The Democratic president will seek to raise taxes on those earning over $400,000 a year to finance health insurance for the poor
President Joe Biden on Tuesday proposed raising taxes on Americans making more than $400,000 a year and giving the government new authority to negotiate prescription drug prices as part of an effort to preserve Medicare for decades to come.
“The budget we’re releasing this week will make the Medicare trust fund liquid beyond 2050 without cutting a dime in benefits,” Biden said in a Tuesday NY Times op-ed shortly before the announcement.
“In fact, we can get better value, and make sure Americans get better care for the money they pay into Medicare.”
“If MAGA Republicans win, seniors will pay higher out-of-pocket costs for prescription drugs and insulin, the deficit will be larger and Medicare will be weaker,” the statement continued.
Biden’s budget, set for release Thursday, proposes raising Medicare taxes from 3.8 percent to 5 percent for those earning more than $400,000, and would eliminate a loophole used by business owners and high earners to avoid additional taxes, according to a White House fact sheet.
In fact, this is the same loophole the Bidens used to evade up to $500,000 in taxes.
In addition to the high Medicare tax rate on income over $400,000, Biden’s plan would eliminate a loophole that allows certain business owners who receive income through an S corporation, limited liability company or limited partnership to avoid paying Medicare taxes on a portion of their income.
The plan would also dedicate the tax revenue generated as part of Obamacare — known as the net investment income tax — to the hospital insurance trust fund.
While this action would not affect the overall federal deficit, since it amounts to diverting an existing revenue stream, the proposal allows the administration to say it is extending the program’s solvency.
“Expanding the budget for Medicare drug negotiations will not only save the federal government money — it will also cut costs for beneficiaries by billions of dollars,” the plan states.
However, as the Washington Post notes, “the administration is touting the measures as part of the White House’s broader 2024 budget proposal, but it faces an unlikely path through the Republican-controlled House of Representatives.”
Republicans are certain to rule out any new taxes proposed in the administration’s plan, and some budget hawks are adamant that the White House should also push for spending cuts.
Biden’s plan is also likely to draw further criticism from the pharmaceutical industry, which says restrictions on federal spending are preventing breakthrough medical research and innovation.
Currently, employees pay 6.2% to Social Security and 1.45% to Medicare, while employers pay the same amounts.
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