Here’s How Biden’s Proposed Tax Increases Will Affect You
“The largest federal tax increase since 1942,” is how The New York Times, in a front-page news article, is describing President Joe Biden’s plan for the American economy.
The Times doesn’t specify precisely how it is measuring the size of the tax increase—in terms of nominal or real dollars raised or as a percentage of gross domestic product. Whatever the yardstick, it is newsworthy.
One thing that made me chuckle is that it’s only now—months after the inauguration—that the Times is waking up to the scale of Biden’s tax increase plans and sharing the news with its readership at the top of its Sunday front page. This is so even though Biden was fairly open about the details of the plan during the campaign.
Some voices had even been warning about it in advance of the election.
“Read Joe Biden’s Lips: New Taxes” was the headline on a July 2020 Wall Street Journal editorial.
“He has pledged a $4 trillion tax hike on almost all American families, which would totally collapse our rapidly improving economy,” President Trump said in August 2020 at the Republican National Convention.
“Biden’s plan to double the capital gains tax” was the headline over one blog post I wrote on the topic back in October 2020.
Why has reaction, at least so far, been relatively muted?
The pandemic, the Black Lives Matter protests, and the January 6 political violence all distracted from the tax issue.
The radical nature of the Democratic primary field—Sen. Elizabeth Warren (D–Mass.) and Sen. Bernie Sanders (I–Vt.) both favored a wealth tax—made Biden’s tax increases, while vast, seem more moderate by comparison.
And while Biden’s tax plans add up to a hefty hit overall, some of the pieces themselves seem incremental.
He’d increase the top corporate rate to 28 percent. That’s more than the current 21 percent, but still less than the 35 percent that applied between 1993 and 2017.
He’d increase the top individual income tax rate to 39.6 percent. That’s up from the current 37 percent, but it’s a rate that applied from 1993 to 2000 and again from 2013
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