Biden wants to increase the Medicare tax rate from 3.8% to 5% on income exceeding $400,000 per year, including salaries and capital gains.
President Biden on Tuesday proposed new taxes on the rich to help fund Medicare, saying the plan would help to extend the insurance program’s solvency by 25 years and provide a degree of middle-class stability to millions of older adults.
More than 65 million people rely on the program, which costs taxpayers roughly $900 billion every year. The number of Medicare enrollees is expected to continue growing as the U.S. population ages. But funding for the program is a problem, with federal officials warning that, without cuts or tax increases, the Medicare fund might only be able to pay for 90% of benefits by 2028.Don’t let the bear market keep you from retiring.
The conflicting worldviews on how raising taxes would affect the economy is part of a broader showdown. Biden and Congress are already under pressure to reach a deal to raise the government’s borrowing authority at some point this summer, or else the government could default and plunge the U.S. into a debilitating recession.
Republicans have denied that they plan to cut the program. A proposal from Sen. Rick Scott that would require Congress to reconsider all federal laws every five years, including Medicare, has gotten little traction. Politicians who try that route might “lose supporters and it can backfire. You can wind up losing your office, too,” Johnson warned. “A very high percentage of seniors are voting in elections.”
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