New Tax Plan Changes Payments for Thousands

The Biden administration wants to increase taxes on corporations and the moneyed class, the White House said on Thursday, ahead of the president's address to Congress to update the country on the State of the Union of America.

The government proposed that the corporate tax rate rise to 28 percent from 21 percent. The Biden administration also said that it wants to increase the corporate minimum tax to 21 percent from the current 15 percent, according to a statement from the White House.

"President Biden believes large corporations should pay their fair share," the White House said.

Also among the proposals, is a plan to increase a stock buyback tax from 1 percent now to 4 percent as a way to "encourage corporations to invest in productivity and the broader economy rather than windfalls for investors." Another idea suggested by Biden is to eliminate what the administration described as a loophole to that allows private jet users to get tax breaks.

"[Biden] would eliminate a tax break that gives preferential treatment to corporate jets, compared to commercial aircraft," the White House said. "He would also increase the fuel tax on corporate and private jet travel, so that corporate executives and other wealthy Americans pay their fair share for the use of airspace and other public services related to air travel."

President Biden will deliver the State of the Union address to Congress later on Thursday ahead of his campaign for re-election where polls suggest he will be an underdog, trailing his probable rival former President Donald Trump. Biden will be hoping to reassure voters of his leadership who are worried about their financial and economic conditions.

Some of the administration's proposals announced on Thursday include a 25 percent tax on billionaires.

"Many of these wealthy Americans are able to pay an average income tax rate of just 8 percent on their full incomes—a lower rate than many firefighters or teachers," the White House said. "To finally address this glaring inequity, the President is proposing to levy a 25 percent minimum tax on the wealthiest 0.01 percent, those with wealth of more than $100 million."

The White House also said that it wants to reduce taxes for certain groups in the country.

"In addition to honoring his pledge not to raise taxes on families earning less than $400,000 annually, President Biden's tax plan would cut taxes for middle- and low-income Americans by $765 billion over 10 years," according to the administration.

As part of these proposals, the Biden administration said it wants to expand the child tax credit to 66 million more children. An earlier version of the policy expired at the end of 2021 which has been credited with helping to reduce child poverty.

"The President would restore the expanded Child Tax Credit, lifting 3 million children out of poverty and cutting taxes by an average of $2,600 for 39 million low- and middle-income families that include 66 million children," the White House said.