Key Points


  • President Biden's 2024 budget proposal includes a call for raising taxes on wealthy Americans to extend Medicare funding. 
  • The proposal suggests increasing the net investment income tax for earnings over $400,000, including regular income, capital gains, and pass-through business income
  • Despite this, the Republican-controlled House of Representatives is unlikely to approve the plan.


On February 28, 2023, President Joe Biden spoke in Virginia Beach, Virginia, outlining his plan to safeguard Americans' access to affordable healthcare.

In his 2024 budget, President Joe Biden proposed higher taxes on wealthy Americans to boost Medicare and ensure funding for the program for a minimum of 25 years.

According to the White House, the proposal involves raising the net investment income tax from 3.8% to 5% on earnings exceeding $400,000, including regular income, capital gains, and pass-through business income, which is reflected in individual tax returns.

The net investment income tax, which is currently in effect due to the Affordable Care Act, applies to individuals earning over $200,000 and married couples filing jointly earning over $250,000.

According to a fact sheet released by the White House, income and wealth inequality in the United States have significantly increased since the establishment of Medicare. The statement further noted that by requesting slightly higher contributions from individuals with the highest incomes, the program could be sustained for many years to come.

In addition to raising taxes on wealthy Americans, the plan seeks to enhance Medicare's capability to negotiate drug prices beyond the measures implemented by the Inflation Reduction Act.

It is improbable that President Biden's proposal will be approved by the Republican-controlled House of Representatives.

The full budget will be released Thursday.

The proposal arrives amidst a contentious discussion concerning the future of Medicare and Social Security as Congress confronts an impending debt crisis. The Congressional Budget Office has warned that without a debt ceiling increase from Congress, the U.S. Department of the Treasury will exhaust its resources to halt a debt default sometime between July and September.

Despite President Biden's endorsement to preserve the programs during his 2023 State of the Union address in January, there are worries about Social Security and Medicare cuts as lawmakers wrestle with the decision of whether to increase the debt ceiling. 

In a January interview with CBS’ “Face the Nation,” House Speaker Kevin McCarthy stated that Social Security and Medicare should be excluded from debt ceiling negotiations and "completely off the table."