KEY TAKEAWAYS

  • President Joe Biden’s State of the Union address on Thursday will give him the chance to lay out his economic priorities for the coming year, ahead of the 2024 presidential campaign.
  • Tax rates are likely to be a key topic for Biden, with a plan to extend the 2017 tax cuts. He is also expected to propose higher taxes on corporations and high earners.
  • Biden could also discuss child care costs, the CHIPS Act to boost domestic semiconductor production, and overseas conflicts.
  • Republican Sen. Katie Britt will present the opposing party’s response hours after hearing testimony from Federal Reserve Chair Jerome Powell.

When President Joe Biden addresses Congress and the nation in the annual State of the Union address on Thursday, he could have a lot to say on the economy.

Ahead of the 2024 presidential campaign, Biden is expected to use the speech to make the case for his reelection by highlighting economic issues and proposing new economic policies.

Biden’s speech comes as recent data has shown economic growth, including several months of better-than-expected job gains, an unemployment rate at 3.7%, and an improving inflation rate.  But despite these positive movements, consumers are glum about the economy.

A recent Pew Research Center poll shows Americans want solutions to financial issues, with nearly three-quarters of respondents rating the economy as their top priority this election cycle.1

Tax Rates, CHIPS Act Among Expected Topics

Analysts at BMO Capital Markets wrote Friday that Biden would likely use the annual speech to call for an extension of tax cuts, as well as discussing the work done in the semiconductor and energy industries.2

One highlight of Biden’s speech reportedly will be his call for tax hikes on corporations and high earners.3 Biden has recently called for raising corporate tax rates to 28% from 21%, while also proposing to tax capital gains on investments in the same way as ordinary income. He also has proposed a 25% minimum income tax on wealthy filers and a more than 2-percentage-point increase in the tax rate for the highest income bracket.4

It’s also likely that Biden will talk about the benefits of the CHIPS and Science Act of 2022, which set up $52 billion for semiconductor research and manufacturing. Biden also may bring attention to the Inflation Reduction Act of 2022, which includes spending on climate and energy projects, and also allows Medicare to negotiate prescription drug prices.

“Comments on funding the wars in Ukraine and the Middle East, and on growing tensions with China relating to trade and Taiwan, could also draw attention,” wrote Sal Guatieri, BMO senior economist.

Britt’s Reply Comes After Powell Testimony

After Biden’s remarks, Republican U.S. Sen. Katie Britt from Alabama will deliver the response.

The economy may be top of mind for Britt, who will hear testimony from Federal Reserve Chair Jerome Powell as a part of her duties on the Senate Banking Committee that same day. In the past, Britt has called inflation a “kitchen table crisis” and pressed for lower energy costs.5

Do you have a news tip for Investopedia reporters? Please email us at

tips@investopedia.com

Hire a Pro: Compare 3 Financial Advisors Near You

Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.