Treasure Secretary Janet Yellen made the case Thursday for President Biden’s budget proposal, which includes tax hikes for the wealthiest Americans and an expanded child tax credit.
During a Senate Finance Committee hearing on the president’s budget proposal, Yellen also said the Biden administration will “continue to oppose misguided proposals that will grow the deficit by offering large tax breaks to the wealthy and big corporations,” setting the stage for a partisan tax policy fight that’s set to play a major role in the upcoming 2024 election.
In a sprawling $7.3 trillion budget request for fiscal year 2025 unveiled earlier this month, Biden proposed raising the corporate minimum tax rate to 28 percent from 21 percent rate set by former President Trump’s 2017 Tax Cuts and Jobs Act (TCJA).
Key provisions of that legislation are set to expire in 2025, and Republicans are pushing to extend the cuts.
During the hearing, Republicans warned increases to the corporate minimum tax rate would drive capital abroad, add to inflation and reduce wages.
Biden’s budget proposal includes a “billionaire” minimum tax of at least 25 percent on the total income of Americans with wealth exceeding $100 million, which Yellen described as the “wealthiest one-hundredth of a percent of taxpayers.”
When pressed by Republicans on how the President’s plan would impact households making less than $400,000, Yellen reiterated the president’s support for extending income-tax reductions for those Americans.
“The president has made clear he would oppose raising back the taxes for working class people and families making under $400,000,” Yellen said.
Sen. Bill Cassidy (R-La.) criticized the president’s proposal as “a series of talking points” and questioned Biden’s commitment to working with Republicans he “continually demagogue[s].”
While Biden’s proposal is effectively dead on arrival in Congress, it sets a clear contrast between Biden and Trump, who clinched the GOP nomination last week.
Sen. Ron Wyden (D-Ore.), the committee chairman, characterized Trump’s pitch in the presidential election as “more tax breaks for multinational corporations and big handouts for those at the very, very top.”
Sen. Mike Crapo (R-Idaho), ranking member of the Senate Finance Committee, also laid out the “stark contrast to the Republican’s achieved objective of lower taxes and competitive rates across the board,” describing Biden’s platform as one of “higher taxes and uncompetitive rates for the majority to support government subsidies for a few.”
Biden has been struggling with disappointing poll numbers and to buck criticism of his handling of the economy.
A recent CBS News/YouGov poll of 2,159 Americans found 61 percent disapproved of how Biden is handling the economy. That’s despite the fact that the economy has defied predictions that the U.S. was heading for a recession last year, and pandemic-induced inflation has cooled significantly while unemployment remains low and economic growth has stayed strong even in the face of high borrowing costs.
Biden’s approval rating is around 43 percent, according to polling averages analyzed by The Hill and Decision Desk HQ, which also show Trump currently has a 1 percent lead over the president.
While Yellen praised the Biden administration’s “historic economic recovery,” she said the administration recognizes that high prices continue to be a burden for many families.
“As a whole, the budget will enable us to continue to grow our economy and support workers and families while upholding our commitment to fiscal responsibility and reducing the deficit,” said Yellen.