President Biden will renew his calls for higher taxes on billionaires and corporations during his State of the Union address Tuesday.
"This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters," the White House said in a preview of the economic initiatives that Biden will discuss during his speech.
Neither proposal is likely to garner much support in a deeply divided Congress, with Republicans now in control of the House.
The president first floated a minimum tax on the wealthiest Americans in 2022, calling for a 20% rate that would hit both the income and unrealized capital gains of households worth more than $100 million. However, support for the levy petered out despite a Democratic monopoly in Washington amid some resistance from moderates within the party.
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The newest proposal that Biden will introduce in his speech is the quadrupling of a 1% levy on corporate stock buybacks. Democrats passed the tax last year as part of the Inflation Reduction Act in hopes of curbing businesses' tendency to repurchase their own shares from investors.
While companies slammed the penalty, the 1% fee is not expected to stop share repurchases because it is too low to act as a deterrent.
Many businesses, including Exxon, Lowe's and MasterCard, have expanded programs or announced new ones to repurchase their stock this year.
Biden also plans to push for Congress to renew the expanded child tax credit that lawmakers passed as part of a COVID-19 relief measure, but that has since expired. In addition, he will call for expanding a $35-a-month price cap on insulin for all Americans, not just Medicare recipients.
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The speech comes as Biden tries to defend his economic record as Americans face stubbornly high inflation and growing recession fears. Polls show that Americans largely disapprove of Biden's handling of the economy.
Brian Deese, the outgoing director of the National Economic Council, told reporters during the White House press briefing on Monday that the president will try to emphasize how inflation has declined in the past six months, while stressing that more work needs to be done.
"We’ve seen inflation come down, we’ve seen the labor market remain resilient. And we find ourselves today in an economy where we have real resilience here," Deese said. The goal now is to "redouble our efforts to actually implement a policy agenda that we know and we have seen has really helped to bring this progress along."
