Biden proposes raising taxes on higher earners to save Medicare

• Joe Biden proposes raising taxes higher income earners.
• He hopes to extend Medicare’s solvency for 25 more years.
• How is the public reacting?

On Tuesday, President Joe Biden proposed raising taxes on top earners to help fund Medicare. He said the plan would help extend the insurance program’s solvency by 25 years and provide a degree of middle-class stability to millions of seniors.

Biden openly states that the rich should bear a heavier tax burden. His budget would draw a direct line between those new taxes and the popular health insurance program for people 65 and older.

BIDEN WANTS TO FUND MEDICARE

Biden wants to increase the Medicare tax rate from 3.8% to 5% on income that exceeds $400,000 per year, including wages and capital gains. But the White House did not provide specific estimates of cost savings with the proposal.

“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden wrote in an essay Tuesday in The New York Times.

Many people depend on the program

More than 65 million people count on the program that costs taxpayers approximately $900 billion each year. The number of people enrolled in Medicare is expected to continue to grow as the US population ages.

The suggested Medicare changes are part of a more comprehensive budget proposal that he plans to release Thursday in Philadelphia. But pushing the proposal through Congress will likely be difficult, since Republicans control the House and Democrats only have a slim majority in the Senate.

Joe Biden’s medicare proposal could affect the economy

According to The Associated Press, Grover Norquist, president of Americans for Tax Reform and an advocate of the kinds of tax cuts generally favored by Republicans, said the US economy would suffer because of the president’s plan.

“The Biden tax hikes will raise the cost of goods and services for everyone, and make American workers and businesses less competitive internationally and vs. China,” Norquist said.

What is Medicare?

Medicare is the federal health insurance program for people age 65 and older, certain younger people with disabilities, and people with End-Stage Renal Disease (chronic kidney failure requiring dialysis or a transplant, sometimes called ESRD).

Medicare Part A covers inpatient medical care provided in hospitals or skilled nursing facilities, home health care, and hospice care for terminally ill patients.