Joseyeon "US Fiscal Spending Down 1%, Corporate Tax Rate Raised to 28%"

[Asia Economy Sejong=Reporter Kim Hyewon] An analysis has emerged that major countries such as the United States, Canada, and Australia will focus on fiscal consolidation, including reducing fiscal expenditures and national debt, over this year and next year.

The Fiscal Expenditure Analysis Center of the Korea Institute of Public Finance (KIPF) announced this on the 19th through the "2022 Budget Trends of Major Countries" published in the May issue of the Ministry of Economy and Finance's Fiscal Trends.

According to KIPF, the United States proposed a fiscal expenditure of $5.792 trillion for the 2023 fiscal year (October 1, 2022 ? September 30, 2023), a 1.0% ($60 billion) decrease compared to the previous year in the President's budget plan. The federal government debt-to-GDP ratio is expected to fall by 0.6 percentage points from 102.4% to 101.8%. The fiscal deficit for next year is projected to decrease by 18.4% from this year to $1.154 trillion (4.5% of GDP).

To achieve fiscal soundness, the U.S. plans to raise the corporate tax rate from the current 21% to 28%, and introduce a wealth tax (minimum rate of 20%) on the top 0.01% high-income earners, KIPF reported.

Canada's total expenditure for the 2022?2023 fiscal year (April 1, 2022 ? March 31, 2023) is projected to be CAD 452.3 billion, a decrease of CAD 45.6 billion compared to the previous year.

The fiscal deficit as a percentage of GDP has been steadily decreasing since the 2021?2022 fiscal year (-4.6%) and is expected to fall to -0.3% by the 2026?2027 fiscal year.

Australia's general government expenditure on an accrual basis for the 2022?2023 fiscal year (July 1, 2022 ? June 30, 2023) is estimated at AUD 628.5 billion, a 5% decrease from the previous year. The fiscal deficit as a percentage of GDP is expected to improve continuously from 3.5% (2021?2022 fiscal year) to 1.6% (2025?2026 fiscal year).

KIPF stated, "The United States, Canada, and Australia are focusing on restoring fiscal soundness by reducing expenditure compared to the previous year, while also making efforts to strengthen investments for economic growth and job creation."

KIPF also presented cases of expenditure restructuring in major countries through the "Status of Medium-term Fiscal Management Plans of Major Countries."

The United Kingdom, through its 2021 Spending Review, took additional measures to cut inefficient spending and decided to reduce the recurrent budgets of central government departments by 5% by the 2024?2025 fiscal year.

France set targets through its 2018?2022 medium-term fiscal objectives to reduce the ratio of fiscal expenditure to GDP from 54.6% in 2017 to 50.9% in 2022, and to lower the fiscal deficit ratio to GDP from -2.9% to -0.2%. Japan plans to maintain expenditure reform efforts for three years from 2022 to 2024.

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