- President Joe Biden is gearing up for a budget announcement and has already given one detail on one proposal.
- His budget raises taxes slightly for those earning $400,000 or more to help fund Medicare.
- His proposal would lower the price of prescription drugs, and the savings would help strengthen the fund.
President Joe Biden’s plan to reduce the deficit and keep Medicare benefits in the pocket of the American people is becoming clearer. According to the White HouseBiden appears to be eyeing higher taxes on some high-income earners to make up the difference.
Biden’s budget, which is set to be released Thursday, includes provisions to raise the Medicare tax rate to 5% from 3.8% for those earning $400,000 or more a year. The proposal includes unearned income, such as capital gains, as well as wage and salary income. It covers the primary way high earners make money from assets such as real estate and stocks and the value they create. It is generally taxed at a much lower rate than the salary most Americans receive.
Biden also aims to close the loophole some high-income and business income earners use to avoid paying Medicare taxes entirely, reviving proposals from Senate Democrats to call it a “pass-through business.” I try not to tax on pay corporate income taxinstead money comes in and instead “passes” to the business owner and is taxed as income.
Biden’s budget also seeks to further reduce the price of prescription drugs, using Medicare’s new powers under the Cut Inflation Act to negotiate prices for a wider range of drugs as they become available. According to the White House, this newfound bargaining power is coupled with a requirement that drug companies and private health plans must pay rebates if they raise prices faster than inflation. , will save $200 billion over the next decade.
Overall, the White House said the Medicare Trust Fund will remain solvent for at least 25 years.
“For decades, I’ve heard Republican friends say the only way we’re going to get serious about keeping Medicare going is to cut benefits, including making the voucher program less and less valuable each year. I’ve heard you argue that some threaten our economy unless I agree to help cut it,” Biden wrote. New York Times editorial on his budget. “Washington is the only place where people can claim that by destroying something, they are saving something.”
the current, According to the Board of Social Security and Medicare, the Medicare Hospital Insurance (HI) Trust Fund, is set to go bankrupt by 2028.Congressional Budget Office Estimate The fund will be exhausted by 2030.
The future of Medicare and Social Security is currently hotly debated as Democrats and Republicans prepare to settle over the budget. They have agreed to raise it to avert a financial crisis, but House Speaker Kevin McCarthy has said those cuts are out of consideration.
The current name of the budget game is to cut the deficit, which shows that both parties are open, but trying to balance the books without touching Social Security, Medicare, or defense spending is a huge understatement. It means a significant systematic reduction in almost everything. government.