Nearly 3 Million Will Have Taxes Raised Under New Plan

President Joe Biden's latest budget proposal seeks to increase taxes on nearly 3 million top-earning Americans, rolling back Trump-era tax cuts for the wealthy in an effort to cut the national deficit by $3 trillion over the next decade.

Under the proposed budget for fiscal year 2025, which would cost a total $7.3 trillion, the wealthiest Americans—those earning more than $400,000 annually—will see their taxes rise, as the plan restores the top tax rate to 39.6 percent from the current 37 percent instilled by former President Donald Trump when he signed the Tax Cuts and Jobs Act of 2017 into law.

The adjustment reverses the 2017 tax law's benefits to the top earners, ensuring the affluent pay their fair share.

Based on 2021 IRS data, Newsweek previously estimated that 1.8 percent of all tax returns fall into the income range exceeding $400,000 annually. The estimation suggests that roughly 2.5 million of the returns filed are from individuals or households within the $250,000 to $500,000 income bracket, with about one-quarter of them surpassing the $400,000 mark.

Newsweek reached out to the White House by email for comment on Monday afternoon.

In a bid to address the disparity in how income is taxed, the budget, detailed in a press release issued by the White House on Monday, also proposes major reforms to capital gains taxation. By taxing capital gains at the same rate as wage income for individuals with an income exceeding $1 million, the administration said it aims to close a loophole that has allowed the wealthy to minimize their tax burden through investment income.

The change is poised to enforce a more balanced approach to taxation, ensuring that wealth derived from investments is not privileged over earnings through labor.

Corporate taxation is another focal point of the budget, with plans to increase the corporate tax rate to 28 percent and adjust the minimum tax on billion-dollar corporations from 15 percent to 21 percent. According to the statement by the White House, the change will rectify the perceived largesse extended to corporations under previous tax laws, with the aim of ensuring that they also contribute a fair share to the national coffers.

The budget also outlines proposals to curb excessive compensation among corporate executives and eliminate tax subsidies for industries including oil and gas, real estate and cryptocurrency transactions.

Beyond tax reforms, the budget plans to reduce wasteful spending and would invest in programs that bolster economic growth and stability.

The $7.3 trillion budget, dubbed "a roadmap to accelerate America's decline" by House Republican Conference Chairwoman Elise Stefanik, House Speaker Mike Johnson, House Majority Leader Steve Scalise and House Majority Whip Tom Emmer, also earmarks just under $1 trillion for defense in fiscal 2025 and would keep Medicare solvent.

"The price tag of President Biden's proposed budget is yet another glaring reminder of this Administration's insatiable appetite for reckless spending and the Democrats' disregard for fiscal responsibility," the group of Republicans said in a joint statement on Monday.

"Biden's budget doesn't just miss the mark—it is a roadmap to accelerate America's decline. House Republicans reject Biden's misguided budget proposal and have taken action to steer our nation back to a path of fiscal sanity.

According to the statement, their actions are aimed at reducing the deficit by $2.6 trillion over the next decade, slightly less than the $3 trillion reduction proposed by Biden's plan.

It's important to note that Biden's budget proposal is not law. While it has been submitted to Congress, it must be reviewed by and voted on by the House and Senate. Changes can be made to the proposal before it is agreed upon, and before Biden signs it into law.