White House FY 2023 Budget Calls For Tax On Businesses

President Joe Biden released his fiscal year 2023 budget request last week. While the document does not have the force of law (the legislative branch has the power of the purse under the U.S. Constitution), the request provides an outline for the House and Senate agenda for the coming year.

In the budget, President Biden again called on Congress to raise taxes on corporations, businesses with international operations, pass-through entities, and family-owned businesses. Specifically, the budget asks federal lawmakers to:

• Raise the corporate tax rate from its current level of 21 percent to 28 percent;
• Increase the top individual tax rate from 37 percent to 39.6 percent;
• Increase the global minimum tax burden (GILTI) and replace the current BEAT regime with a new system that would increase taxes by approximately $240 billion over the next decade;
• Raise the top capital gains tax rate from 20 percent; and
• Place a 20 percent minimum tax on the top 0.01 percent of earners and households worth more than $100 million.

This last priority would be achieved through a complex tax increase on the unrealized capital gains of high-net worth individuals, a levy that would impact the entrepreneurial founders of several companies even though under current law these companies pay corporate tax and shareholders pay dividend taxes on what remains.

The U.S. Department of the Treasury has more information on these proposals here.

On the spending side, if enacted by Congress, the budget would:

• Provide $372 million, an increase of $206 million from the 2021 enacted level, for the National Institutes of Standards and Technology’s (NIST) manufacturing programs;
• Increase spending for several public infrastructure programs, including $8 billion for bridges, $1.4 billion for electric vehicle chargers, and $4.7 billion for Amtrak;
• Invest in key technologies and sectors of the U.S. industrial base such as microelectronics, casting and forging, and critical materials;
• Create a $100 million Career Training for Occupational Readiness program, which would support training programs focused on growing industries; and
• Provide $50 billion more on affordable housing programs, $9.5 billion on Small Business Administration programs, and several billion dollars on various programs related to education, childcare, health care, and climate including public research and development (R&D).

The Tax Foundation has more information here. IndustryWeek has more information here.