US President Joe Biden presented on Monday his initiative for the country’s public accounts for fiscal year 2023, which starts in October. The document contemplates a budget of 5.79 billion dollars, compared to 5.85 billion this year. Among the novelties included in the budget, as detailed by the White House, is a tax increase for the richest households, for corporations and more defense spending.
The main countries of the world agree on a global minimum tax of 15% for companies
In a statement, Biden noted that his Administration “is on track to reduce the federal deficit by more than $1.3 trillion this year,” in what is “the largest annual deficit reduction in US history. ”. “This is a direct result of my Administration’s strategy to bring the pandemic under control and grow the economy from the bottom up and from the middle out,” the president said.
This will be possible, in part, by raising the corporate tax from 21% to 28%, something the moderate wing of the Democrats in Congress opposes. “Taxpayers have paid the price for decades for a tax system that has rewarded multinational corporations that have taken jobs and profits away,” says the document released Monday by the White House. The US Government links this decision with the multinational agreement to set a global minimum rate of 15% Corporate Tax, sealed by more than 130 countries. Added to this tax increase, according to the Biden Executive, is a package of additional measures to ensure that multinationals do not use tax havens.
The Executive also proposes a new minimum tax of 20% for the richest in the country, fortunes greater than 100 million dollars. The document ensures that the tax code currently allows “special treatment” for the wealthiest households. This special treatment, combined with sophisticated tax planning and giant loopholes, allows many of the world’s wealthiest to end up paying a lower income tax rate than most middle-class households. This minimum rate only affects 0.01% of households, which are those that exceed that barrier of 100 million, but half of what is expected to be obtained from this tax increase comes from households with more than 1,000 million dollars .
On the spending side, coinciding with the Russian invasion of Ukraine, the Biden Executive has prepared a budget that contemplates 31,000 million dollars for new defense spending, which increases the national defense budget to 813,000 million dollars. Within this section, almost 7,000 million dollars are allocated for NATO and the reinforcement of its eastern flank, in the face of the war in Ukraine.
Likewise, the budget proposal contains 9.9 billion dollars to strengthen the capacity of health systems in the country “to improve immunization programs” against covid-19 and 81.7 billion dollars over the next five years in health security against future pandemics. The Executive’s proposal is expected to be sent to Congress on Tuesday, which must then approve it. Normally it is usually presented in May but this year it has been brought forward so that it does not coincide with the legislative elections in November.
In US public finances, discretionary spending is government spending implemented through an appropriations bill that must pass the Legislature.