Stand up for the facts!
Our only agenda is to publish the truth so you can be an informed participant in democracy.
We need your help.
I would like to contribute
If Your Time is short
- Independent tax analysts agree that the Biden plan would not directly raise taxes on any household earning below $400,000 a year.
- It would pose small hits from the indirect impact of raising the corporate tax rate.
- The vast majority of the income losses from the Biden tax proposal would fall on the top one-fifth of incomes, and especially on the top 1%.
Speakers on the first night of the Republican convention criticized Democratic nominee Joe Biden on one of the foundational issues of the GOP: taxes.
"They want massive tax hikes on working families," said Nikki Haley, the former Republican governor of South Carolina and ambassador to the United Nations, of the Biden-Kamala Harris ticket.
Haley’s charge stood in sharp contrast to Biden’s statement to ABC News’ David Muir a day earlier, when he said that "no new taxes" would be imposed on anyone making under $400,000.
The Trump campaign pointed to one video clip in which Biden said that the "first thing" he will do in office is repeal the GOP tax cuts. However, that’s not his official campaign proposal.
Biden’s changes would repeal provisions in President Donald Trump’s tax law for taxpayers earning over $400,000. Specifically, Biden would:
Increase the top corporate tax rate to 28% from 21%;
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.
Independent tax analysts side with Biden’s characterization of his plan.
The Committee for a Responsible Federal Budget, a group that’s hawkish on the federal budget deficit, has confirmed that no direct taxes would be imposed on any household making less than $400,000 per year. Households below $400,000 a year could face small income losses indirectly, largely from the portion of higher corporate taxes that companies pass along to their workers through constraints on compensation.
The group concluded that "overall, Biden’s tax plan would make the tax code more progressive, with the vast majority of increased tax burdens and the entirety of direct tax increases falling on high-income households."
The group summarized four independent assessments of how Biden’s tax plan would affect members of the lowest, second-lowest, middle, second-highest, and highest income quintiles. The four analyses were conducted by the American Enterprise Institute, the Tax Foundation, the Urban Institute-Brookings Institution Tax Policy Center, and the University of Pennsylvania’s Wharton School.
As the chart indicates, the lowest 80% of the income spectrum would register small income losses as a result of Biden’s tax proposal, typically about one-half of 1% of income, or in the range of a couple hundred dollars. For instance, according to the Tax Policy Center’s analysis, the lowest income group would see their incomes drop by $30; the next would see a drop of $110; the middle would see a drop of $260; and the second-highest, with incomes up to $170,000, would see a loss of $590.
By contrast, the top one-fifth of earners would face a significantly bigger hit — a loss of somewhere between 2.3% and 5.7% of after-tax income in 2021. And the top 1% of earners would take the biggest hit of all, between 13% and 17.8% of after-tax income.
Haley said Biden and Harris "want massive tax hikes on working families."
Independent tax analysts agree that the Biden plan would not directly raise taxes on any household earning below $400,000 a year, and it would pose small hits from the indirect impact of raising the corporate tax rate. The vast majority of the income losses from the Biden tax proposal would fall on the top one-fifth of incomes, and especially on the top 1%.
All in all, the indirect tax hikes on "working families," such as they are, are not "massive." We rate the statement False.
Nikki Haley, remarks at the Republican convention, Aug. 24, 2020
ABC News, "Biden to ABC's David Muir on raising taxes: 'No new taxes' for anyone making less than $400,000," Aug. 23, 2020
Committee for a Responsible Federal Budget, "Understanding Joe Biden's 2020 Tax Plan," July 30, 2020
Urban Institute-Brookings Institution Tax Policy Center, "An Analysis of Former Vice President Biden's Tax Proposals," March 5, 2020
Urban Institute-Brookings Institution Tax Policy Center, "Household Income Distributions," accessed Aug. 24, 2020
Read About Our Process
In a world of wild talk and fake news, help us stand up for the facts.