President Biden yesterday unveiled his 2024 budget, which seeks to extend the life of the Medicare health benefit program by raising taxes on Americans earning more than $400,000 per year. The $6.8 trillion budget contains roughly $5 trillion in tax increases on high-income earners and corporations over the next decade and seeks to reduce the federal deficit by about $3 trillion over the same period.
The budget has virtually no chance of being passed in the Republican-controlled House.
In a New York Times op-ed, Biden said: “My budget proposes to increase the Medicare tax rate on earned and unearned income above $400,000 to 5% from 3.8%.”
Also, on the tax front, the Biden budget calls for a significant expansion of the Low-Income Housing Tax Credit, which NAHB supports. However, it also includes tax increases that directly target housing, such as eliminating Like Kind Exchanges, expanding and increasing the Net Investment Income Tax to include active investment income like rental income, eliminating carried interest, and increasing marginal tax rates and rates on capital gains.
Biden’s proposal would allocate $73.3 billion for the Department of Housing and Urban Development — a $1.1 billion increase, or a 1.6% jump, from the 2023 enacted level.
It’s important to note that no White House budget is ever approved “as is” by Congress. While the president’s budget recommends spending levels for the next fiscal year, it is not legally binding. Congressional appropriators will have the final say in program realignment, and tax and spending levels.
As House and Senate lawmakers unveil their respective budget plans in the coming weeks and months, NAHB will continue to monitor the appropriations process as funding decisions are made on key housing, labor, tax and environmental programs.