Joe Biden’s website describes the difference between himself and the president on taxes thusly: “Trump rewards wealth, Biden rewards work.” Adopting this language is the first sign that Biden’s tax plan will mostly be targeted at giving middle-income families some much-needed tax relief. COVID-19 has made a bad economic situation much worse, forcing millions into poverty while putting nearly a trillion dollars in the pockets of billionaires. The Biden plan might not have any immediate solutions for that, but the changes it does have will mostly benefit middle-income earners, according to a CNN analysis.
Who Would Pay More in Taxes?
Biden has pledged not to raise taxes on anyone earning less than $400,000, One model predicts that they’ll still end up paying 0.9 percent more thanks to businesses passing on some of their tax increases to employees.
What Would Biden’s Tax Plan Do For Families?
The wealthy would pay more under the Biden plan. The current top marginal federal income tax rate is 37 percent, and he would seek to raise it to the pre-Trump level of 39.6 percent.
Biden would also subject earnings over $400,000 to the Social Security payroll tax, expand the child tax credit, and reestablish the first-time homebuyers’ tax credit. This tax policy represents a great start in making the economy a more equitable affair for all Americans, but the plan won’t do much for people who make too little to pay much in taxes, or those who can’t afford to buy a house.
Similarly, Biden’s proposed changes to 401(k) rules would be good news for those who are saving for retirement through employer-sponsored plans, or those who make enough to save but aren’t helpful to the millions of Americans who can’t afford to save.
How Would Businesses Fare Under Biden’s Tax Plan?
The corporate tax rate would rise from 21 percent to 28 percent, and taxes on international profits would also rise to discourage businesses from moving offshore and punish those that have. Those are both good ideas whose time seems long overdue and will benefit the American working class, a group that has experienced an onslaught of economic uncertainty.
Biden’s tax plan is, of course, just that: a plan. It’s not as specific as a piece of legislation would be, and it’s a proposal that would undoubtedly change by the time it made its way to his desk.