President BidenJoe BidenHouse Democrat threatens to vote against party's spending bill if HBCUs don't get more federal aid Overnight Defense & National Security — The Pentagon's deadly mistake Haitians stuck in Texas extend Biden's immigration woes MORE on Wednesday pitched his plan to hike taxes on the wealthy and corporations, saying “trickle-down economics has never worked.”
“It’s time to grow the economy from the bottom and the middle out,” the president said during his first address to a joint session of Congress.
Biden has proposed paying for his $2.25 trillion infrastructure plan through tax increases on corporations, and his new $1.8 trillion plan focuses on helping families through tax hikes on high-income individuals.
Business groups and Republican lawmakers have pushed back on the tax increases, arguing they would hurt the economy. Some Democrats have also raised concerns, with Sen. Joe ManchinJoe ManchinBriahna Joy Gray: Push toward major social spending amid pandemic was 'short-lived' Overnight Energy & Environment — Presented by Climate Power — Emissions heading toward pre-pandemic levels Biden discusses agenda with Schumer, Pelosi ahead of pivotal week MORE (W.Va.) saying he would prefer to raise the corporate tax rate from 21 percent to 25 percent rather than the 28 percent rate Biden has proposed.
During Wednesday's speech, Biden reiterated his pledge to not raise taxes on those making under $400,000 per year. He said that he doesn’t want to punish anyone and argued that increasing taxes on the wealthy and corporations was a matter of fairness.
“It’s time for corporate America and the wealthiest 1 percent of Americans to just begin to pay their fair share,” Biden said. “Just their fair share.”
The president referenced a recent report from the left-leaning Institute on Taxation and Economic Policy that found that 55 large corporations paid zero in federal income taxes last year.
“We’re going to reform corporate taxes so they pay their fair share and help pay for the public investments their businesses will benefit from as well,” he said. “And we’re going to reward work, not just wealth.”
The president's mention of trickle-down economics was a reference to the school of thought favored by Republicans that tax cuts for the wealthy and corporations will eventually benefit everyone.
Biden highlighted several ways that he wants to raise taxes, including raising the top tax bracket for taxpayers in the top 1 percent from 37 percent to 39.6 percent, raising the capital gains tax for households making more than $1 million and increasing IRS enforcement against wealthy individuals who are not paying the taxes they owe.
Biden contrasted his plans with the 2017 GOP tax cut law, which the president called a “windfall” for corporations and the wealthy. He also noted that billionaires in the U.S. have seen their net worths increase during the pandemic while millions of middle-class people have lost their jobs.
“I believe what I’ve proposed is fair, fiscally responsible,” Biden said. “It raises revenue to pay for the plans I’ve proposed that will create millions of jobs that will grow the economy and enhance our financial standing in the country.”
“When you hear someone say they don’t want to raise taxes on the wealthiest 1 percent or corporate America, ask them, whose taxes do you want to raise instead, and whose are you going to cut?” Biden added.