national debt

President Biden has proposed tax hikes targeting corporations and wealthy Americans to reduce the national debt. The Tax Foundation found that these tax increases could reduce economic output by 2.2% in the long run, slash wages by 1.6%, and kill about 788,000 full-time equivalent jobs. Biden’s proposal includes a 25% minimum tax rate on households worth more than 0 million, raising the capital gains tax rate, quadrupling the corporate stock buyback tax to 4%, raising the corporate tax rate to 28%, increasing the Medicare tax paid by wealthy Americans, implementing a global minimum tax on multinational corporations, and closing the carried interest loophole used by private equity and hedge fund managers. The tax increases would reduce the federal deficit by about trillion and help fund new programs like a monthly tax credit for homeowners, child care subsidies, and lower prescription drug costs. The corporate income tax proposal is considered the most harmful to economic growth, with higher taxes on corporations alone potentially reducing GDP by 0.9%, wages by 0.8%, and full-time equivalent jobs by 192,000. The proposals are unlikely to gain support in Congress, especially from Republicans who control the House.