Biden's Wealth Tax: The Downsides You Need to Know

Joe Biden has proposed a $7.3 trillion budget for fiscal 2025, focusing on increasing taxes on the wealthy and corporations, raising the corporate tax rate, imposing higher taxes on individuals earning over $400,000 annually, and introducing a minimum income tax for those with over $100 million in wealth. This isn't about it being effective, it's to win over the public before the election since the majority of people don't understand much about the economy and dislike corporations or rich people. When Trump lowered taxes it brought back 1.5 trillion from overseas and encouraged international competitiveness. Some problems of a wealth tax is their tendency to discourage investment and savings due to reduced returns, distort behaviors by incentivizing asset hiding or non-productive investments, diminish rewards for risk-taking, prompt capital flight as wealthy individuals seek lower-tax jurisdictions, pose administrative challenges with complex valuation and monitoring requirements, and potentially lead to double taxation if assets are already subject to other taxes.

The budget proposal also addresses various policy areas favored by Democrats, such as tighter immigration controls at the U.S.-Mexico border and increased aid for Ukraine, Israel, and Taiwan. The budget faces challenges in a divided Congress where Republicans have criticized it for "reckless spending". The proposal serves as a campaign pitch for Biden, he doesn't really care because he would've done it the first year and not the last.

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