Democratic presidential candidate Joe Biden has laid out a multitrillion-dollar spending plan that would raise taxes by $3.4 trillion on mostly wealthy Americans and corporations over the next decade, according to an analysis released Monday.
The former vice president's campaign platform would raise federal spending by about $5.4 trillion — or roughly 24% of gross domestic product by 2030, according to new findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School.
The spending plan, which is more than double what Hillary Clinton proposed during the 2016 campaign, would be funded by a slew of new taxes, including a corporate tax hike. Biden's trillion-dollar proposals signal that he'll continue the unprecedented level of government spending that began in mid-March as American life came to a grinding halt because of the COVID-19 crisis.
Biden has pledged to hike the corporate tax rate on "day one" of his presidency if he wins the Nov. 3 election. Increasing the tax rate to 28% from 21% would generate more than $1.4 trillion, making it the largest revenue-raiser in his proposal, the analysis showed.
In addition, Biden has said he plans to reverse changes made to individual income rates for households earning more than $400,000 under the 2017 Tax Cuts and Jobs Act. By repealing those changes, the top income bracket rate would revert to 39.6% from 37%, raising an estimated $944 billion. He would also seek to increase investment and payroll taxes for those households earning more than $400,000, raising roughly $993 billion.
Almost 80% of the tax increases backed by Biden would land on the top 1% of earners in the U.S., Wharton said.
The Wharton study estimates the Biden campaign would also reduce federal spending by more than $1 trillion over the next decade by cutting prescription drug prices.
The largest areas of new spending in Biden's proposals are education ($1.9 trillion), infrastructure and research and development ($1.6 trillion), housing ($650 billion), Social Security benefits ($290.7 billion), health care ($1.6 trillion) and paid family leave ($527 billion).
According to Wharton, Biden's spending proposal would cause the biggest federal budget increase in a half-century, since Democratic presidential nominee George McGovern in 1972 ran on a platform that included a guaranteed minimum income for all Americans.
The Wharton estimate is based on the Biden campaign's public proposals, as well as discussions with the nominee's aides. Other estimates of Biden's spending plans are higher, but Wharton said this is because some appeared to double-count campaign proposals introduced at different times for different purposes.
Although Biden's proposal would cause the nation's already-swollen deficit to surge in the near-term, the study says it would actually reduce federal borrowing by 2050.
It would cause the nation's GDP to shrink by 0.4% in 2030, and increase by 0.8% in 2050.