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‘Largest Tax Hike Ever’: Trump Tears Into Biden’s Fiscal Plans Amid High Inflation

The Trump campaign and Republican allies have launched a vehement critique against President Joe Biden’s proposed budget for fiscal year 2025, which they claim would result in the “largest tax hike ever” in the history of the United States. 

This budget proposal comes at a time when Americans are already grappling with high inflation rates.

President Biden’s budget outlines a $7.3 trillion plan for the upcoming fiscal year, incorporating a significant $4.9 trillion in tax increases over the next decade. 

This plan, according to GOP members on the House Budget Committee, is set to produce the “largest debt in American history,” projecting a national debt reaching $54 trillion by 2034.

The Trump campaign argues that the proposed tax hikes would effectively extract nearly $40,000 from the average American family. 

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This figure is based on calculations that account for the cumulative financial burden on taxpayers, including the indirect costs of high inflation which have been a persistent issue during Biden’s term.

Critics like Brian Riedl from the Manhattan Institute point out that a substantial portion of the new tax revenue would fund further entitlement expansions rather than reducing the national deficit. 

This has sparked debate over the fiscal responsibility of such expansive government spending.

In response to Biden’s fiscal strategy, the Trump campaign has promised to push for further tax cuts and boost the energy sector to combat inflation and reduce living costs. 

These promises aim to position Trump as the pro-growth candidate heading into the next election cycle.

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The proposed tax increases mainly target corporations and high-wealth individuals. 

Key changes include raising the corporate tax rate from 21% to 28%, implementing a 25% minimum tax on households with net worths exceeding $100 million, and increasing taxes on capital gains and corporate stock buybacks.

A report by the Tax Foundation predicts that Biden’s tax plan would shrink the U.S. economy by 2.2%, decrease wages by 1.6%, and eliminate approximately 788,000 jobs. 

The analysis highlights particularly negative impacts from the increased corporate taxes.

While the tax hikes are projected to lower the federal deficit by around $3 trillion, much of this fiscal gain is allocated to new programs, such as subsidies for child care, lower drug prices, and a tax credit for homeowners with steep mortgage payments.

The changes to capital gains taxes under Biden’s plan could position the U.S. outside international norms, potentially affecting the country’s competitiveness and economic standing globally.

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As the 2025 expiration date approaches for key provisions of the Tax Cuts and Jobs Act, many Americans are facing a potential increase in their tax bills. 

This legislation, enacted during Trump’s presidency, significantly altered the tax landscape by lowering rates and increasing deductions.

The contrasting tax policies of Trump and Biden are set to be a central issue in the upcoming general election. 

Trump has vowed to make his tax cuts permanent to prevent a future tax increase for Americans, while Biden is expected to preserve reductions for those earning under $400,000.

The potential extension of the Trump-era tax cuts poses another dilemma, as it could add an estimated $3.7 trillion to the federal deficit, according to the Congressional Budget Office. 

This underscores the complex fiscal challenges facing the next administration.

As the debate over fiscal policy heats up, the direction of U.S. tax legislation remains a pivotal issue with wide-ranging implications for the economy and the everyday financial health of American citizens.