Some closer looks at Biden's fiscal year 2025 budget
Saturday, March 16, 2024
In his State of the Union address on March 7, President Joe Biden touched on how he wants to spend our money in the coming 2025 fiscal year.
The Biden Administration followed up the next week with its formal budget proposal in the Treasury Department's General Explanations of the Administration's Fiscal Year 2025 Revenue Proposals. The Green Book, as it's popularly known, describes the tax proposals in the budget, along with associated revenue estimates.
While a president is required by law to present a budget, what it includes — both in Biden's remarks to Congress and the country, as well as the formal presentation — is in reality a fiscal wish list.
Rather, presidential budgets actually are policy and messaging tools that elaborate on an administration's goals. The financial proposals then are used to stake out positions, guide existing political proposal or reforms, and introduce or refine new ideas.
Unsurprisingly, it includes funding for additional clean energy and climate programs that his administration has championed in his first term. It also calls for changes to the tax code, specifically, increases that will affect wealthier taxpayers. Again, not a shock.
Biden tax change highlights: Biden's budget also would bump the corporate tax rate, which the Tax Cuts and Jobs Act (TCJA) reduced from 35 percent to 21 percent, up a bit to 28 percent.
On the individual side, the highest marginal ordinary tax rate would go from the TCJA level of 37 percent back to pre-tax-reform's 39.6 percent.
In dollar terms, this latest Biden budget, the fourth and final proposal before the end of his first term, seeks a total of $7.3 trillion for the rapidly approaching fiscal year. That includes $895 billion for defense, and approximately $621 billion in non-defense base discretionary spending.
As for the agency that would deal with any tax changes, the Biden FY25 budget asks for $12.3 billion for the Internal Revenue Service. That's the same level of funding the agency got in FY 2023.
In addition to annual discretionary funding, Biden proposes to restore full additional IRS funding included in the Inflation Reduction Act.
Biden budget shout outs: I focused in a recent post on one tax area in the budget, changes to the Internal Revenue Code's capital gains provisions. But there's obviously a lot more in the 256-page Green Book.
You can thumb through that document yourself. Or, as a preview or sort of budget Cliffs Notes, you can check out the following FY25 budget items that are this weekend's Saturday Shout Outs.
We'll start at the source, the White House budget fact sheet. As noted, the budget for every administration is a policy and political message as much as a financial document.
So this next shout out goes to a more right-leaning tax policy nonprofit, the Washington, D.C.-based Tax Foundation's take, President Biden Outlines Vision for Higher, More Complicated Taxes in State of the Union Address and FY 2025 Budget.
Leaning left again, the Institute on Taxation and Economic Policy (ITEP), another D.C. think tank that works on state and federal tax policy issues, discusses Revenue-Raising Proposals in President Biden's Fiscal Year 2025 Budget Plan.
The libertarian Cato Institute (again nonprofit; again in Washington, D.C.) examines what it believes are The 8 Biggest Tax Increases in Biden's Budget.
As happens every budget cycle, a president's budget proposal produces a lot of commentary on the fiscal choices. Here are three from across the political spectrum.
Michael J. Boskin, a Hoover Institution senior fellow and economics professor at Stanford, and Kiran Sridhar, an investment affiliate at Shield Capital and a senior fellow at the McCrary Institute for Cybersecurity, write in The Wall Street Journal that Biden's Budget Neglects the Military.
Biden's budget calls the bluff of supposed GOP budget hawks, writes Jennifer Rubin, conservative but anti-Trump columnist for The Washington Post.
Karen Dolan, a fellow of the Institute for Policy Studies and opinion contributor for The Hill newspaper, says Biden's populist budget marks the overdue end of trickle-down economics.
And the shout outs wrap up with a note on the timing of the president's latest budget proposal and Congress' role in the annual funding process.
Because Congress is so late establishing appropriations for fiscal 2024, the year is getting lapped by the 2025 budget proposal, says Tom Temin in his Federal News Network piece The 2024 budget is about to get lapped by the 2025 wish list.
Enjoy the federal fiscal details and commentary. I'm going to balance my own checkbook, then take in some Major League Baseball spring training games.
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