President Biden gave his State of the Union speech on Thursday night, touching on issues ranging from reproductive rights to foreign policy and the economy.
The president emphasized his support of working families and the middle class in particular, vowing that no one earning less than $400,000 a year would pay more in federal taxes. But he had some tough words for the highest echelons of the corporate world, outlining plans to raise the corporate minimum tax, increase the levy for billionaires, and crack down on loopholes for executive compensation and private jet use.
“Tonight, I want to talk about the future of possibilities that we can build together, a future where the days of trickle-down economics are over, and the wealthy and biggest corporations no longer get all the tax breaks,” he said.
Here are some of the biggest takeaways from Biden’s State of the Union address.
He wants a higher corporate minimum tax
Biden wasn’t shy about taking aim at big corporations and wealthy Americans who he says need to pay more in taxes. In fact, he used the term “fair share” six times throughout his speech.
The president cited statistics from the Institute on Taxation and Economic Policy that 55 of the biggest companies in the U.S. in 2020 paid nothing in federal income taxes. He also touted the Inflation Reduction Act, which he signed into law in 2022, which requires a 15% minimum corporate tax rate.
Biden said he wants to further increase the corporate minimum tax rate to 21%. And in a fact sheet released by the White House yesterday, his administration outlined plans to raise the corporate tax rate to 28%, and clamp down on multinational companies and “Big Pharma” in particular.
“The way to make the tax code fair is to make big corporations and the very wealthy begin to pay their fair share,” he said in his speech.
Billionaires are on notice
Speaking of which, Biden had no qualms in calling out the super rich and their low tax rates.
“No billionaire should pay a lower federal tax rate than a teacher, a sanitation worker or a nurse,” he said.
The president went on to argue for a minimum tax rate on billionaires of 25%, estimating it would generate $500 billion over the next decade. In a statement, the White House wrote that the 25% rate would also apply to people with more than $100 million in wealth.
The money from those taxes could be used to fund social safety net programs, according to Biden. “Imagine what that could do for America. Imagine a future with affordable child care millions of families can get—they need to go to work to help grow the economy,” he said.
He took aim at tax breaks for executive compensation
CEO compensation has become a hot button issue over the past few years, with the gap between workers and top bosses becoming a major pain point for many Americans.
Biden called out tax breaks for executive pay specifically in his speech: “They can pay $20 million if they want but deduct a million, end it now,” he said.
In a statement, the White House specified that Biden would deny companies a tax deduction when pay was higher than $1 million for any employee.
And forget about those corporate jet tax breaks
In the same breath as executive pay, Biden also said he will increase taxes on corporate jet travel.
The president plans to eliminate tax breaks that favor corporate jets over commercial planes, and increase the fuel tax on private jet travel “so that corporate executives and other wealthy Americans pay their fair share for the use of airspace and other public services related to air travel,” the White House wrote in a statement.
