Joe Biden last night brought the total new spending commitments announced in his first 100 days in office to $6 trillion – but he’s facing questions over whether the tax rises he proposes will be enough to fund the programs.
Speaking to 200 lawmakers in Congress last night, Biden set out plans for his $2.3 trillion ‘American Jobs Plan’ that he called ‘a blue-collar blueprint to build America’. It joins the American Rescue Plan and The American Families Plan, at a time when national debt is at its highest level since 1945.
The American Rescue Plan, worth $1.9 trillion, has already passed the Senate in a 50-49 party-lines vote held in March, and aims at giving aid to American citizens amidst the coronavirus pandemic.
The proposed American Families Plan is worth $1.8 trillion, so with The American Jobs Plan, the combined total of Biden’s three plans stands at $6 trillion, that would be spent over roughly 10 years.
In order to pay for this, the president announced a series of tax initiatives including a rise in corporation tax, in marginal income tax for the top 1 percent of earners, and in capital gains and dividend tax rates for those earning over $1 million per year, as well as an increase in funding to the IRS to chase town tax evaders.
Biden also intends to crack down on multinationals, forcing US firms that make money overseas and companies who use offshore businesses to pay significantly more in taxes under his ‘Made in America’ tax plan.
According to experts at The Tax Foundation, Biden’s tax increases announced in Congress on Wednesday would raise an estimated $2.37 trillion.
Their analysis of Biden’s taxation plans in full project that his planned taxes will raise a total of $3.3 billion – however this is subject to many factors including the performance of the economy.
The looming gap between Biden’s $6 trillion spending ambitions and the projected tax revenues raises the prospect that the President will resort to further borrowing to cover his spending.