March 09,2023

Crapo Statement on Tried-and-Failed, Tax-and-Spend Budget Proposals

“The spending binge must stop.”

Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, issued the following statement on President Biden’s FY2024 budget request:   

“The President’s budget makes clear the Administration has not learned from its mistakes that have led to two years of record-high inflation and excessive deficit spending. Instead, this Administration is doubling down with more of the same.   

“Republican tax reform led to one of the strongest economies in decades, and tax revenues hit record highs in fiscal year 2022 on the back of these reforms.  Despite recently passing nearly $500 billion in additional taxes on America’s job creators, the White House wants to go further, continuing to rehash tax hike proposals that even the prior Democrat-controlled Congress would not support.  Revenues are not the problem; Washington’s insatiable appetite for unfettered spending is the problem.  The spending binge must stop.  

“As hardworking Americans and job creators continue to face elevated inflation and supply-chain challenges, it is critical that our tax system promotes American jobs, manufacturing and higher wages for hardworking families.  Preserving and building on pro-growth tax policy like Republicans’ 2017 tax reform will help reignite our economy and restore fiscal sustainability.”  

FAST FACTS:  

The budget request includes $4.7 trillion in new or increased taxes over the next decade.  

A tax on individuals across income levels: The President’s budget calls for hiking the individual federal income tax rate up to 39.6 percent from 37 percent, not including surtaxes.  In addition to raising the rate, the proposal also lowers tax brackets by hundreds of thousands of dollars, thereby pushing tax increases on even more hardworking Americans. 

A tax on Main Street: The President’s budget calls for a 5 percent surtax on gross income above $400,000, and for extending the surtax to business income and investment income alike.  Hardworking entrepreneurs could face federal taxes of roughly 42 percent, and nearly 45 percent when combined with the President’s individual rate increase proposal.  Add in state and local taxes, and many--particularly in high-tax states—would see their tax rate soar well above 50 percent, regardless of whether they reinvest money into their businesses.  

A tax on America’s job creators: The President’s budget calls for increasing the income tax rate on incorporated businesses to 28 percent.  According to the nonpartisan Joint Committee on Taxation, the effects of hiking this tax would primarily be borne by those making less than $500,000 per year.  A separate study shows consumers shoulder more than 30 percent of any comparable tax increase.  When combined with state and local taxes, many companies would face an income tax rate far higher than China’s (25 percent) and Europe (average 21.7 percent). 

A tax that gives China the upper hand: Despite negotiating a 15 percent global minimum tax rate for the rest of the world, the President’s budget calls for hiking the U.S. global minimum tax rate to 21 percent, giving our biggest foreign competitors—like China—the upper hand.  

A tax on savings and investment: The President’s budget calls for quadrupling the stock buyback excise tax, harming Americans who save, invest, or participate in retirement plans.  Imposing an excise tax on savings and investment artificially skews how a business decides to best use its funds.  

A tax on entrepreneurship and property: The President’s budget calls for implementing a new and complicated minimum tax on some property owners, specifically on the unrealized increase in the value of their property.  This national property tax would discourage innovation and entrepreneurship, create additional difficulty for taxpayers and the overwhelmed Internal Revenue Service, and raise significant Constitutional issues.