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Biden has promised not to raise taxes for anyone making less than $400,000 a year. So he has no plan to increase federal tax rates on a family earning $75,000 annually.
Biden’s tax plan seeks to raise up to $4 trillion in tax revenues over a decade. His proposed changes, which include raising the top individual income tax rate to 39.6%, would largely target wealthy Americans.
But a false claim spreading on Facebook says modest-earning families would get crushed by tax increases under a Biden presidency.
"Biden’s tax rate on a family making 75,000 dollars would go from 12% to 25%," the Aug. 16 Facebook post says. "Let that sink in all you riding with Biden supporters!" (Another post talks about a tax rate hike for families making $78,000)
Readers asked about the posts, which were flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)
The posts are inaccurate, we found. Biden’s tax plan calls for several changes aimed at raising up to $4 trillion in tax revenues over a decade, according to a March analysis from the Tax Policy Center, an independent group that models the effects of tax legislation.
But Biden has not proposed bumping the federal income tax rate up to 25% for households earning $75,000 (or $78,000). The Associated Press and Reuters have already debunked the false Facebook claim, and Factcheck.org quashed a similar attack from President Donald Trump in May.
Biden’s tax plan has been examined by tax analysts from multiple independent groups, including the Tax Policy Center, the Tax Foundation, the University of Pennsylvania’s Penn Wharton Budget Model and the Committee for a Responsible Federal Budget.
Among Biden’s proposed changes, he would:
Increase the top corporate tax rate from 21% to 28%.
Raise the top individual federal income tax rate to 39.6%.
Place a 12.4% Social Security tax on incomes above $400,000.
Tax capital gains at the same rate as ordinary income for very high earners.
There’s nothing in Biden’s plan, according to the analyses we reviewed, that would raise the federal income tax rate for a family making $75,000 or $78,000.
Groups that have examined Biden’s tax plan, including the Tax Policy Center and the Committee for a Responsible Budget, have estimated that after-tax income for some lower earners could slightly decrease. But that’s not because of a higher tax rate.
Gordon Mermin, a senior research associate at the Tax Policy Center and co-author of the group’s March report, said the small increases dealt to the lower income groups would be almost all due to "indirect effects of the increase in the corporate tax rate," such as lowered wages for workers.
They would not be the result of direct changes to the federal income tax rate. "No direct taxes are imposed on any household making less than $400,000 per year," the Committee for a Responsible Federal Budget wrote in its analysis of Biden's plan.
On average, the Tax Policy Center’s March report predicted that the bottom 80% of earners could wind up paying between $30 and $590 extra on Biden’s watch. It estimated that over 90% of the tax increases would be borne by the top 20% of earners.
A Facebook post said, "Biden’s tax rate on a family making 75,000 dollars would go from 12% to 25%."
Biden hasn’t proposed raising the federal income tax rate from 12% to 25% for married couples filing jointly and earning $75,000.
We rate this post False.
The Associated Press, "Biden hasn’t proposed tax increase on families making $75K," Aug. 19, 2020
Reuters, "Fact check: Joe Biden has not proposed a tax hike on families making $75,000 a year," Aug. 19, 2020
Committee for a Responsible Federal Budget, "Understanding Joe Biden's 2020 Tax Plan," July 30, 2020
Factcheck.org, "Trump Distorts Biden’s Tax Plan," May 13, 2020
The Tax Foundation, "Details and Analysis of Former Vice President Biden’s Tax Proposals," April 29, 2020
Tax Policy Center, "An Analysis of Former Vice President Biden’s Tax Proposals," March 5, 2020
The Internal Revenue Service, "IRS provides tax inflation adjustments for tax year 2020," Feb. 20, 2020
The University of Pennsylvania, "The Biden Tax Plan: Budgetary, Distributional, and Economic Effects," Jan. 23, 2020
Congressional Research Service, "The Federal Income Tax: How Did P.L. 115-97 Change Marginal Income Tax Rates?" Feb. 12, 2019
Tax Policy Center, "How did the Tax Cuts and Jobs Act change personal taxes?"
PolitiFact, "Is there no policy daylight between Joe Biden and Bernie Sanders, as RNC says?" March 10, 2020
Phone interview with Gordon Mermin, a senior research associate in the Urban-Brookings Tax Policy Center at the Urban Institute, Aug. 14, 2020
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