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Biden proposes tax hike on Americans making over $400,000 to fund Medicare
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President Biden wants to raise payroll taxes on Americans earning more than $400,000 in a bid to keep Medicare solvent for at least another quarter-century.
The proposal – part of the president's 2024 budget request set for release on Thursday – would raise Medicare taxes from 3.8% to 5% on annual income above $400,000, according to a White House fact sheet. Biden also floated closing a loophole used by business owners and higher-earners to shield some of their income from additional taxes.
"Let’s ask the wealthiest to pay just a little bit more of their fair share, to strengthen Medicare for everyone over the long term," Biden said Tuesday in an op-ed published in the New York Times, adding: "This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come."
On top of the tax increase, Biden's plan includes a measure that would allow Medicare to negotiate prices for more drugs and sooner after they enter the market. That builds upon a provision included in the Inflation Reduction Act, passed by Democrats in the fall of 2022, that allowed Medicare to begin negotiating certain drug prices.
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