President Biden's 2025 Budget Unpacked: Tax Breaks and Programs to Benefit Millions

President Joe Biden has unveiled his proposed budget for 2025, which includes significant benefits for families, low-income workers, and senior citizens. The budget aims to revive a program that proved effective in lifting millions of children out of poverty during the pandemic. In addition to providing tax breaks for low- and middle-income Americans, the budget also addresses the growing concerns around the higher cost of living that many households are facing. Let's delve into the key proposals and their potential impact on millions of Americans.

Reviving the Child Tax Credit

Biden's budget seeks to revive the expanded Child Tax Credit (CTC), which was temporarily enhanced during the COVID-19 outbreak. This expanded credit, which provided families with as much as $3,600 per child, significantly reduced the child poverty rate. Under the proposed budget, the expanded CTC would be reinstated, allowing families to receive $3,000 per child for kids six years and older, and $3,600 for each child under six. Furthermore, parents who qualify for the CTC would receive monthly checks, ensuring that they can access financial relief when they need it most.

Expanding the Earned Income Tax Credit

The budget also aims to expand the Earned Income Tax Credit (EITC) to include more low-wage workers without kids, as well as older Americans. This expansion is projected to result in an average tax cut of $800 for 19 million individuals and couples who are working, including 2 million workers over age 65 and 5 million adults aged 18 to 25. The goal is to provide additional support to workers with incomes below about $64,000 annually.

Additional Proposals

Biden's budget includes several other proposals aimed at providing relief and support to families and workers, such as:

• Creating a program to guarantee affordable child care for families earning less than $200,000, benefiting over 16 million children
• Offering voluntary, free preschool for all 4-year-old kids
• Providing $10,000 tax credits to first-time homebuyers and current homeowners in "starter homes"
• Making permanent the expanded premium tax credits for people buying health insurance through the Affordable Care Act's marketplaces
• Extending Medicaid-like coverage to people in states that haven't adopted the Medicaid expansion

Funding the Proposals

To fund these initiatives, the budget proposes higher taxes on high-income Americans and corporations. This includes raising the corporate tax rate to 28%, reinstating the requirement for billionaires to pay at least 25% of their income in taxes, and increasing the highest individual income tax rate to 39.6%. The administration has emphasized that individuals earning less than $400,000 would not face higher taxes as a result of these proposals.

While the budget represents the administration's priorities, its passage is uncertain given Republican control of the House. Nevertheless, the proposals provide insight into Biden's policy goals and the potential impact on millions of Americans. As the budget continues to undergo scrutiny and debate, its influence on future tax policies remains a key focus.