President Joe Biden’s budget proposal will raise taxes on high earners to shore up the Medicare trust fund, he wrote in the New York Times and detailed in a White House fact sheet.
Photo Insert: Biden has pointed to some GOP-proposed changes to entitlement programs, such as raising the Medicare eligibility age and instituting work requirements for some Medicaid recipients.
He also wants to expand Medicare’s new ability under the Inflation Reduction Act to negotiate drug prices.
Like Social Security, Medicare’s fund faces insolvency, which would jeopardize benefits for older adults and people aged under 65 with certain disabilities who rely on the program.
The Hospital Insurance Trust Fund, which partly funds Part A benefits, is projected to run out of money in 2028, Elizabeth O’Brien and Janet H. Cho reported for Barron’s Daily.
To extend it beyond 2050, Biden would raise the Medicare tax rate to 5% from 3.8% on earned and unearned income above $400,000. Biden wants to close a loophole that allows high earners and business owners to claim some income is neither earned income nor investment income.
The full budget plan coming on Thursday faces an uphill battle in the narrowly divided Congress. But it is expected to spell out Biden’s priorities as the two parties head toward a clash on raising the nation’s debt limit and as Biden launches his reelection bid.
Biden has pointed to some GOP-proposed changes to entitlement programs, such as raising the Medicare eligibility age and instituting work requirements for some Medicaid recipients.
The White House said its plan would extend the solvency of the fund into the 2050s without cutting benefits.
If Biden tries again to raise the top marginal income tax to 39.6% from 37%, he would be seeking a combined top federal tax rate of 44.6%, The Wall Street Journal said, and would push the marginal tax rate on top earners above 50% in many states.