Staff Reports
Biden is attempting to play the "keep the tax cuts for the middle class" card in a showdown with the White House, but his most recent budget has enormous gaps. Based on the most recent budget document unveiled on Monday, fiscal 2025 entails an enormous $7.3 trillion in expenditures and a meager $5.5 trillion in tax revenue, resulting in an almost $1.8 trillion annual deficit. Conservatives are already enraged by the inclusion of proposals for new spending programs and taxes on corporations and affluent individuals over the next decade in this budget.
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However, what is absent is what is generating an even greater uproar. Notably, budget projections detailing the potential fiscal ramifications of the administration's proposal to extend a substantial portion of the tax cuts implemented during the Trump administration, as well as the White House's financing strategy, are absent. The absence of a strategy has enraged conservatives, who have dubbed it a "fiscally irresponsible mess."
Passed in 2017, the Tax Cuts and Jobs Act, alternatively referred to as the Trump or Republican tax cuts, reformed the tax code pertaining to both individuals and corporations. The Republicans inserted transitory provisions into the legislation for procedural purposes; these provisions are scheduled to expire in 2025.
The majority of middle-class individuals would be subject to a tax increase should these provisions expire, a prospect that both the Republican and Democratic parties are averse to. Already, Republicans are chanting "Four more years!" and are determined to maintain their signature tax law.
Conversely, the Biden White House finds itself in an extremely precarious circumstance. Biden has pledged not to increase taxes on individuals with annual incomes below $400,000. However, retaining the portions of the 2017 tax cuts that apply to this income bracket would be prohibitively expensive. However, the White House budget unveiled this week fails to incorporate provisions for maintaining the aforementioned provisions of the TCJA. As they ponder the situation, a number of fiscal hawks are perplexed and exclaiming, "This simply does not add up!"
Additionally, the arrow indicates discussions regarding the renewal of the child tax credit. The 2021 Democratic legislation increased the benefit for children under the age of six to $3,600, while the older children would receive it for $3,000; the Biden budget proposed restoring the increased benefit but only until 2025, prompting some to question whether the candidate was genuinely concerned for the welfare of young children.
Already, conservatives are donning "Make America Great Again" headwear and proclaiming that this is yet another instance of fiscal irresponsibility. There are concerns that in order to make up for the enormous budget deficit, the White House is plotting a historic series of stealthy tax increases, which would force individuals to keep their wallets on strict confinement.
Undoubtedly, the "sleepy" White House is ensuring an intriguing development; however, public opinion remains divided as to whether or not this financial roller coaster will gain the support of the American people.
