Joe Biden plans new taxes on the rich to help save Medicare

WASHINGTON (AP) — President Joe Biden on Tuesday proposed new taxes on the rich to help fund Medicare, saying the plan would help to extend the insurance programme's solvency by 25 years and provide a degree of middle-class stability to millions of older adults.

In his plan, Biden is overtly declaring that the wealthy ought to shoulder a heavier tax burden.

His budget would draw a direct line between those new taxes and the popular health insurance programme for people older than 65, essentially asking those who've fared best in the economy to subsidise the rest of the population.

Biden wants to increase the Medicare tax rate from 3.8 per cent to 5 per cent on income exceeding $400,000 per year, including salaries and capital gains.

The White House did not provide specific cost-saving estimates with the proposal, but the move would likely increase tax revenues by more than $117 billion over 10 years, according to prior estimates in February by the Tax Policy Center.

“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare programme strong for decades to come,” Biden wrote in a Tuesday essay in The New York Times. He called Medicare a “rock-solid guarantee that Americans have counted on to be there for them when they retire.”

Senate Minority Leader Mitch McConnell was quick to dismiss the plan, telling reporters on Tuesday that Biden's budget agenda “will not see the light of day.”

More than 65 million people rely on Medicare at a cost to taxpayers of roughly $900 billion every year.

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