Biden introduces new taxation laws - targeting the top 1%

A new taxation policy has been unveiled - targeting budget deficits.

Planning to cut national deficits by $1 Trillion - Biden has come down harshly on the wealthiest United States citizens. Federal deficits, national deficits or national debts are the total sum of money that a country borrows from various sources. Repayment of these debts is more important than just repayments of your personal loans - as defaulting on these payments can negatively impact foreign policies and the overall value of a currency.

The United States worked with a national debt of $3.1 Trillion in 2020 - three times the deficit it faced in 2019. In addition, due to the pandemic, the United States faced a deficit which amounted to about 15% of its GDP. This is the largest deficit, in relation to the GDP, that the United States had to face since the Second World War.

In order to reduce the rising national debt - the Democratic Biden Administration has placed a minimum 20% tax mandate on households earning more than $100 million a year. Statistically speaking, more than half of the planned $1 trillion would be generated from households earning more than $1 billion a year.

This measure, economically evaluating it, has multiple effects on its stakeholders. First, the high-income earners would be discouraged - nonetheless - on a practical long-run scale they would not stop earning; hence, the United States treasury would continue to enjoy the high tax revenue. Moreover, in the long run, the entire country benefits - as the funds would balance the country's accounts, allowing more freedom in economic decision making.

Henceforth, the decision would soon begin showing its fruits - and time will tell how well the newly gained tax revenue is utilised.