“Don’t tell me what you value. Show me your budget, and I’ll tell you what you value,” President Joe Biden loves to say. He said it again when he introduced his fiscal 2023 budget this week. And as bad as the increased $1.4 trillion in spending and $2.5 trillion in higher taxes over the next decade are, what is most noteworthy is what isn’t in the document: Biden’s signature legislative agenda, Build Back Better.
Sure, there is a footnote explaining that the budget includes “a reserve for legislation that reduces costs, expands productive capacity, and reforms the tax system.” No doubt this is meant to be a placeholder for Biden’s Build Back Better agenda, which the budget claims is still being discussed with Congress.
But Build Back Better isn’t some nebulous proposal. It is actual legislation that has passed the House and been scored by the Congressional Budget Office. According to the CBO, a true 10-year scoring of Biden’s signature legislative agenda would raise spending by $5 trillion and add $3 trillion to the deficit. Adding $3 trillion to already record-high deficits during record-high inflation is probably not the message Biden wanted to send with his budget proposal, which is assuredly why he kicked it to the curb.
Instead, Biden has included a “billionaire minimum income tax,” which is neither limited to billionaires nor to income. In reality, it is a wealth tax that applies to anyone with $100 million or more in assets. In order to determine who must pay this tax, taxpayers would have to report not just all of their income every year to the IRS but also all of their assets. The reporting requirement alone would add billions of hours in tax compliance for tax filers.
Biden’s new wealth tax isn’t even the biggest tax hike in his budget. That honor belongs to his corporate tax hike, which would raise the corporate rate from 21% today to 28%. This $700 billion-plus tax hike would be passed on to families through higher prices, lower wages, and the loss of jobs overseas. Even the liberal Tax Policy Center admits this corporate tax hike would raise costs for most middle-class households by $300 a year. That would break Biden’s pledge not to raise taxes on families making less than $400,000 a year.
The worst part of Biden’s budget is the normalization of trillion-dollar budget deficits. Donald Trump did not have a record to be proud of when it came to government spending and deficits during his presidency. Before COVID, the federal deficit hit $984 billion, and with the economy shut down during COVID, deficits soared even higher, to $3.1 trillion in 2020 and $2.8 trillion in 2021.
The problem isn’t revenue. Even without Biden’s tax hikes, taxes as a percentage of gross domestic product rose to 18.1% in 2021 and are expected to rise to 19% in 2022. This is well above the post-1972 average of 17.3%.
No, the deficits are being entirely driven by spending, which peaked at 31% at the height of the COVID spending before falling to a projected 23.9% at the end of the Biden budget 10-year window. This is way above the post-1972 20.8% average. If someone could just get spending down to the levels it was at as recently as 2001, when it was just over 17.5%, the nation’s finances would be on a much more stable path.