Crapo Statement on Biden Budget
Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, issued the following statement on President Biden’s Fiscal Year 2025 budget request:
“President Biden is proposing the same menu of tax hikes that not even a Democrat-controlled Congress could support, while promising even more government subsidies to counter the inflation that has run rampant under this Administration. Every proposed cure is doubling down on the disease.
“The tax-and-spend regime envisioned by the President would be felt by virtually all Americans. Tax increases that slow the economy would be felt by consumers, retirees and workers alike. Punitive international tax proposals would make it more attractive for companies to do business overseas, giving our biggest foreign competitors, like China, the upper hand in the global economy. An expansion of drug price controls would result in higher launch prices, reduced competition and stifled innovation, translating into fewer new treatments in the years to come.
“Although this budget is unserious, Americans should pay close attention to the vision President Biden has laid out in these spending plans: massive tax hikes to fund a massive expansion of the welfare state. Americans are already experiencing the negative consequences of ‘Bidenomics.’ High prices, stagnant wages, record credit card debt and a majority of Americans living paycheck-to-paycheck.
“While President Biden continues to make misleading or outright false claims about Republicans’ Tax Cuts and Jobs Act (TCJA), here are the facts:
“TCJA led to one of the strongest economies in generations. Enacting competitive tax rates while broadening the base resulted in access to more high-paying jobs, record low unemployment, and a healthier environment for U.S. workers and businesses moving ahead in the global marketplace. More than three-quarters of TCJA’s tax cuts were projected to accrue to households earning less than $500,000. Contrary to Democrats’ criticism, U.S. tax revenues hit record highs on a nominal basis and a multi-decade high as a share of GDP in 2022. I remain committed to preserving and building on these pro-growth tax policies.”
The budget request includes $4.9 trillion in new or increased taxes over the next decade.
A tax on individuals across income levels: The President’s budget calls for hiking the individual federal income tax rate up to 39.6 percent from 37 percent, not including surtaxes. In addition to raising the rate, the proposal also significantly lowers the top tax bracket by hundreds of thousands of dollars, thereby pushing tax increases on even more hardworking Americans.
A tax on America’s job creators: The President’s budget calls for increasing the income tax rate on incorporated businesses to 28 percent. According to the nonpartisan Joint Committee on Taxation, the effects of hiking this tax would primarily be borne by those making less than $500,000 per year. A separate study shows consumers shoulder more than 30 percent of any comparable tax increase. When combined with state and local taxes, many companies would face an income tax rate far higher than China’s (25 percent) and Europe (average 21.3 percent).
An unworkable minimum tax on American companies: The budget calls for increasing the fundamentally flawed “book minimum tax” to 21 percent from 15 percent despite current implementation delays due to administrability challenges. This harmful policy should be repealed, not expanded.
A tax that gives China the upper hand: Despite negotiating a 15 percent global minimum tax rate for the rest of the world, the President’s budget calls for hiking the U.S. global minimum tax rate to 21 percent, giving our biggest foreign competitors—like China—the upper hand.
A tax on savings and investment: Taxing stock buybacks artificially hampers business decisions about how best to use funds and ends up harming Americans who have their life savings invested in 401(k)s, IRAs and the stock market. Quadrupling the partisan stock buyback excise tax would needlessly harm Americans who save, invest or participate in retirement plans.
An expanded death tax that will harm family-owned businesses: Biden’s $83 billion in death tax increases will force family farms, ranches and other generational businesses to sell off assets to pay an enormous tax bill to Washington. In addition, Biden is once again calling for a second death tax by forcing heirs to pay an additional tax on their predecessors’ paper gains.
A new tax on wealth: The President’s budget calls for a new 25 percent minimum income tax on “billionaires,” even though the tax is not limited to incomes of that amount and it applies to more than income – including unrealized asset gains. The President continues his attempt to tax unrealized capital gains, even though it would hurt taxpayers and the economy.
More funding for more IRS audits: After giving $80 billion to the IRS for beefed up enforcement efforts, the President’s budget calls for another $84 billion for the agency, plus restoring $20 billion in unnecessary IRS funding that the President previously agreed to cut. Small business owners, cash-heavy businesses and those who can’t afford legal teams are easy targets for an emboldened IRS, and legislative proposals to prevent those individuals from increased audit rates have been rejected by Democrats.
Drug price controls that drive higher costs, fewer cures: Price controls will result in higher launch prices, reduced competition and stifled innovation, translating into fewer new treatments in the years to come.
Expensive expansion of Obamacare subsidies: Permanently expanding taxpayer-funded subsidies so that more Americans will shift onto Obamacare health exchanges would cost taxpayers over $200 billion. The nonpartisan Congressional Budget Office believes it would also result in more individuals losing employer-sponsored insurance than uninsured individuals gaining coverage.
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