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Behind the proposal to tax American billionaires, Joe Biden proposes a centrist budget

Joe Biden outlines his fiscal year 2023 budget proposal at the White House in Washington on March 28, 2022.

There is the information that attracts attention, that of taxing billionaires. Joe Biden, by sending, Monday, March 28, to Congress his budget wishes for the annual exercise which will open in October 2022, reiterated his request to make the richest pay taxes.

Technically, the measure plans to tax, up to 20%, all income, including unrealized capital gains, of people whose fortune exceeds 100 million dollars (91 million euros). The measure would concern 20,000 households, or 0.01% of Americans. It is by never selling the shares of their group that entrepreneurs like Elon Musk or Jeff Bezos have managed, in some years, to pay no federal tax. On the other hand, when they sell, taxes soar, as experienced by Elon Musk, who will pay, in 2021, the highest sum ever paid by an individual. “For those wondering, I will be paying over $11 billion in taxes this year”tweeted the boss of Tesla and SpaceX, at the end of December 2021.

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This measure is the same as a proposal formalized by Congress Democrats in the fall of 2021, but which had been torpedoed by the centrists. In the middle of the campaign for the midterm elections in November, which promise to be very difficult for the Democrats, the measure, supposed to bring in 360 billion dollars over ten years, has little chance of being adopted. However, it attests to an increasingly significant concern, that of adopting fairer taxation.

“Biden bows to political reality”

But the budget news is elsewhere: Joe Biden is making “fiscal responsibility” one of his “values” power stations. This conviction implies a reduction in deficits. These should fall from 12.4% of gross domestic product (GDP) in 2021, the year of the post-covid recovery plan, to 5.8% in 2022. The decline should continue in 2023, with a deficit reduced to 4 .5% of the national wealth. Admittedly, the White House is starting from optimistic growth assumptions (3.8% and 2.5% in 2022 and 2023, against 2.8% and 2.2% forecast by the Federal Reserve, the American central bank), but the tone, that of orthodoxy, is set.

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Second ” value ” of Mr. Biden, the ” security “, whether indoor or outdoor. Failing to get Congress to adopt his social and ecological recovery plan, Mr. Biden made significant gestures towards centrist and non-registered voters. “With a budget leaning towards the center, Biden bows to political reality,” comment on it New York Times.

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