President Joe Biden is expected to call for a wealth tax and higher taxes on businesses when he delivers his State of the Union address Thursday night.
White House officials said that Biden will propose an increase in corporate minimum taxes as well as curbing executive pay and corporate tax deductions in his remarks. Biden wants to increase the corporate tax rate to 28% from 21%. He also wants to increase the 15% corporate minimum tax on companies reporting over $1 billion in profit that was included in the 2022 Inflation Reduction Act to 21%.
The policy proposals will be reflected in the president's budget proposal that will be released next week, which will form part of his re-election platform. Tax provisions in the budget blueprint will stand little chance of being enacted into law unless Democrats win control of both the House and Senate and voters give Biden a second term.
Biden is also expected to renew calls for a "billionaire tax" proposal that would actually impact many American millionaires well below the billionaire threshold. The proposal, which Biden has touted previously, would impose a 25% minimum tax on income for Americans with wealth of more than $100 million.
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He is also planning to pledge to extend Trump-era tax cuts for those earning $400,000 a year, call for the restoration of a COVID-era expansion of the child tax credit that paid eligible families up to $3,600 a year per child, and expand the earned income tax credit for low-wage workers.
Biden's tax plan would also prevent companies from deducting expenses of employee pay above $1 million.
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Under current law, deductions on compensation for CEOs, CFOs and other positions are prohibited – but the Biden administration says the new proposal would cover all employees paid over $1 million to raise over $250 billion in corporate tax revenue over the next decade.
Critics of President Biden's tax policies argue that raising taxes won't put much of a dent in the more than $34 trillion national debt unless federal spending is reduced given its rapid growth.
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"Since World War II, regardless of wild swings in tax rates that reached as high as 91 percent in the 1950s, federal tax revenue always hovers right between 15 and 20 percent of GDP," Patrick Hedger, executive director of the Taxpayers Protection Alliance, told FOX Business in a statement.
"Our crippling national debt is not a problem that can be taxed away. It is a spending problem," he added. "A tax-only approach on wealthy investors and productive businesses will not only fail to make a dent, it will actively harm the economic growth necessary to shrink the debt."
Lael Brainerd, director of the White House's National Economic Council, contrasted Biden's tax policies with those of Republicans in a preview of Biden's planned remarks at the State of the Union.
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"Congressional Republicans want to cut taxes even more for the wealthy and big corporations, all while adding more than $3 trillion to the debt," Brainerd said. "President Biden has made clear whose side he's on."
Reuters contributed to this report.
