Team Biden finally got around to releasing their proposed budget for fiscal year 2024, and like most administration budget proposals since the terrible and destructive Congressional Budget and Impoundment Control Act of 1974, it was immediately pronounced dead on arrival.
Don’t be so sure. Team Biden’s budget needs to be understood for what it is: the initial and foundational campaign document for President Joe Biden’s re-election in 2024.
The presidential election in 2024 is likely to be a winner-take-all contest. Given the currently narrow margins in the House and the Senate, whoever wins the presidency in 2024 — Republican or Democrat — will likely bring the House and the Senate majority along with them.
The sweepy nature of the electoral outcome in 2024 will be of most immediate consequence in the realm of taxes. Between the expiration of many of the Tax Cut and Jobs Act provisions, the mono-partisan nature of the tax provisions in the Inflation Reduction Act and the consistent desire of progressives to tax unrealized gains, it is likely that a tax-focused reconciliation will be the first priority of a new president and Congress in 2025.
Mr. Biden’s budget submission makes it clear what he would do with respect to taxes and spending if he wins in 2024. None of it is good.
Under his proposed budget for fiscal year 2024, there would be $5 trillion in new taxes in total. The personal income tax top rate would increase by 7.6% (to 44.6%). The capital gains top rate would increase by almost 20% (also to 44.6%). The corporate tax would increase to 28%. There would be a new tax on stock buybacks (4%).
Most distressingly, there would be a brand new 25% tax on unrealized capital gains. If you’re wondering what those are, unrealized gains are essentially the wealth that resides in stocks that have appreciated over the years, but not yet been sold. Or the wealth that resides in businesses (especially small and start-up businesses) that have done well but have not yet been sold or otherwise monetized. Or perhaps it may eventually apply to farms or other sorts of wealth held by individuals.
In short, Mr. Biden wants to tax citizens on the basis of wealth which they have earned but which is tied up in productive uses. Thought of another way, people would be taxed on income that they do not have.
This idea has existed in the fevered dreams of progressives for years, but no one — until now — has been foolish enough to propose it, primarily because it would be enormously destructive to the American economy and American people.
Team Biden has an aggressive spending agenda as well. Their proposed budget increases spending by $500 billion (or about 12%) in fiscal year 2024. In the next 10 years, the federal debt would increase almost $20 trillion, and federal spending, which has historically averaged around 21% of the gross domestic product, would linger above 25% of GDP.
The president’s budget is not dead. It waits in all its destructiveness to emerge in the event of a victory by Mr. Biden in 2024. Plan (and prepare to vote) accordingly.
Michael McKenna is the president of MWR Strategies. He was most recently a deputy assistant to the president and deputy director of the Office of Legislative Affairs at the White House.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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