Biden to Raise Corporate Tax Rate... Clashes with Trump Who Promised Tax Cuts

U.S. President Joe Biden will unveil a plan to raise taxes on the wealthy, including an increase in the corporate tax rate, during his State of the Union address scheduled for the 7th (local time). With former President Donald Trump, his 'rival,' having announced a large-scale tax cut pledge ahead of the November presidential election, this move is seen as a way to appeal to working-class voters by setting up a kind of confrontation.

[Image source=AFP Yonhap News]

According to White House pre-briefings, President Biden will announce a plan to raise the minimum corporate tax rate on large companies from the current 15% to 21% during the joint session of Congress held that night.

The minimum tax refers to the least amount of tax that must be paid even if tax reduction benefits are received. The Biden administration had already raised the minimum corporate tax rate to 15% starting last year under the Inflation Reduction Act (IRA), and now plans to increase it again. Additionally, President Biden is expected to reiterate his pledge from the 2020 presidential campaign to raise the top corporate tax rate during this speech.

The administration will also revise related systems to disallow tax deductions for wages over $1 million paid to employees. Currently, only some top executives are prohibited from receiving such deductions. Furthermore, a minimum 25% federal tax will be imposed on billionaires, and the stock buyback tax will be increased fourfold to 4%. Plans are also underway to raise fuel taxes on corporate and private jet travel. The White House estimates that these measures could reduce the deficit by $3 trillion over the next decade.

The likelihood of President Biden's tax increase proposals passing Congress immediately is low. The Wall Street Journal (WSJ) noted, "Even when the Democrats controlled Congress, the pledge to raise the top corporate tax rate did not pass." Ultimately, this announcement is interpreted as an effort to court votes ahead of the November presidential election. With former President Trump confirmed as the Republican candidate, this serves as a form of differentiation.

WSJ emphasized, "President Biden's proposal highlights the biggest differences between the two parties on tax policy." Many of the tax cuts signed into law by former President Trump are set to expire at the end of next year. The outcome will depend on who wins the presidential election. President Biden appears to be building an image as a presidential candidate representing workers and the middle class, his traditional base, through so-called tax increases on the wealthy. A previous Gallup poll showed that about two-thirds of Americans believe corporations bear too little tax burden. In contrast, former President Trump plans to stimulate the economy through tax cuts.

Meanwhile, on the day of President Biden's final State of the Union address of his first term, former President Trump launched a preemptive rebuttal. This was a response anticipating that Biden would criticize him during the address, which will be watched by tens of millions. In a video titled "Preemptive Rebuttal to Joe Biden's State of the Union," released that day, Trump criticized Biden's immigration policy and claimed that many illegal immigrants are terrorists. He also accused the Biden administration of triggering the highest inflation in decades, emphasizing, "It's time to tell Biden, 'You're fired.'"

President Biden's State of the Union address will begin at 9 p.m. Eastern Time (11 a.m. Korean time on the 8th). Last year's address was estimated to have been watched by more than 27 million people.

This content was produced with the assistance of AI translation services.