August 24, 2020

Yes, Biden Would Raise Taxes On Those Making Under $400,000

Key Takeaways:

  • Last night, Joe Biden falsely claimed that Americans making under $400,000 would not see a tax hike under his plans

  • Five independent analyses have concluded that Biden would raise taxes on middle class Americans:

  • Biden’s formal tax plan doesn’t even include other taxes that Biden has endorsed, which would raise taxes on the middle class

    • Biden has endorsed bringing back Obamacare’s individual mandate, a tax that primarily hit the middle class and lower income Americans

    • Biden previously said he supported a carbon tax

  • Biden’s $4 trillion tax hike is more than double what Hillary Clinton proposed, and is the largest proposed tax hike in recent history

    • Biden’s tax plan would shrink the economy and kill an estimated 585,000 jobs

Biden Has Claimed That Under His Tax Hikes, “Nobody” Making Under $400,000 Would See An Increase, “Period”

In August 2020, Joe Biden Claimed That He Will Not Raise Taxes On Anyone Making Less Than $400,000, “No New Taxes, There Would Be No Need For Any.”  ABC’S DAVID MUIR: “We know there's another crisis attached to this pandemic and that's the economy. Thirty million Americans on unemployment right now we just learned of another million last week filing for unemployment. You lead in the polls, but in the same polls there’s also a vulnerability. Over and over again, President Trump leads on the economy, and you know what he’s saying? He said, President Biden, a Biden administration, will raise your taxes, will you raise taxes?” JOE BIDEN: “I will raise taxes for anybody making over $400,000. Let me tell you why I'm going to do it. It's about time they start paying a fair share of the economic responsibility we have. The very wealthy should pay fair share, corporations should pay a fair share. The fact is, there are corporations making close to a trillion dollars that pay no tax at all. I’m not punishing anybody. This is about everybody paying their fair share.” MUIR: “So no new taxes $400,000 and down?” BIDEN: “No new taxes, there would be no need for [any].” (ABC’s 20/20, 8/23/20)

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In May 2020, Biden Claimed Nobody Making Under $400,000 Would Have Their Taxes Raised Under His Tax Plan, “Period.” JOE BIDEN: “Nobody making under $400,000 bucks would have their taxes raised, period bingo.” (Joe Biden, CNBC’s “Squawk Box,” 5/22/20)

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FIVE INDEPENDENT ANALYSES HAVE CONCLUDED BIDEN’S PLAN WOULD RAISE TAXES ON THOSE MAKING LESS THAN $400,000

A March 2020 Tax Policy Center Analysis Found That Taxes Would Go Up On Americans At Every Income Level Under Biden’s Tax Plans. (Gordon B. Mermin, Surachai Khitatrakum, Chenxi Lu, Thornton Matheson and Jeffrey Rohaley, “An Analysis Of Former Vice President Biden’s Tax Proposals,” Tax Policy Center, 3/3/20)

  • Tax Policy Center: “In 2021, The Proposals Would Increase Taxes On Average On All Income Groups” (Gordon B. Mermin, Surachai Khitatrakum, Chenxi Lu, Thornton Matheson and Jeffrey Rohaley, “An Analysis Of Former Vice President Biden’s Tax Proposals,” Tax Policy Center, 3/3/20)

  • By 2030, Income Taxes Would Still Be Higher For Middle And Lower Income Taxpayers Under Biden’s Tax Plan. “By contrast, taxpayers in the middle income quintile would see an average tax increase of about $330, or 0.4 percent of after-tax income. Taxpayers in the bottom quintile would see an average tax increase of just $20, or 0.1 percent of after-tax income.” (Gordon B. Mermin, Surachai Khitatrakum, Chenxi Lu, Thornton Matheson and Jeffrey Rohaley, “An Analysis Of Former Vice President Biden’s Tax Proposals,” Tax Policy Center, 3/3/20)

An April 2020 Analysis From The Tax Foundation Found That Biden’s Tax Plan Would Lead To Americans “Across All Income Groups” Seeing Lower After Tax Incomes. “In 2021, on a conventional basis, taxpayers in the top 1 percent would see their after-tax incomes reduced by around 13.0 percent due to higher taxes on income above $400,000. However, taxpayers in other income quintiles would also see a reduction in their after-tax income. On a dynamic basis, the Tax Foundation’s General Equilibrium Model estimates that the plan would reduce after-tax incomes by around 2.6 percent across all income groups over the long run.” (Huaquin Li, Garrett Watson, and Taylor LaJoie, “Details and Analysis of Former Vice President Biden’s Tax Proposals,” Tax Foundation, 4/29/20)

An American Enterprise Institute (AEI) Analysis Found That Biden’s Tax Plan Will Increase Taxes On “Households At Every Income Level.” “Biden’s proposals would increase taxes, on average, for households at every income level and make the federal tax code more progressive.” (“An Analysis Of Joe Biden’s Tax Proposals,” American Enterprise Institute, 6/15/20)

  • Americans In All 10 Deciles, On Average, Would See Their Taxes Increase Under The Biden Tax Plan.  (Kyle Pomerleau, Jason DeBacker, and Richard W. Evans, “An Analysis of Joe Biden’s Tax Proposals,” American Enterprise Institute, 6/20)

A March 2020 Analysis Using The Penn Wharton Budget Model Found That Biden’s Plan Would Raise Taxes For Americans At Every Income Level. (“The Updated Biden Tax Plan: Budgetary, Distributional, And Economic Effects,” University Of Pennsylvania Wharton, 3/10/20)

The Committee For A Responsible Federal Budget Found That Americans At Every Income Quintile Would Face Higher Taxes Under Biden’s Plans.  (“Understanding Joe Biden's 2020 Tax Plan,” Committee For A Responsible Federal Budget, 7/30/20)

  • “Those In The Bottom Four Income Quintiles Will Face Tax Increases Of 0.2 To 0.6 Percent Of After-Tax Income.”  (“Understanding Joe Biden's 2020 Tax Plan,” Committee For A Responsible Federal Budget, 7/30/20)

DURING HIS CAMPAIGN, BIDEN HAS ENDORSED OR SAID HE IS OPEN TO TAX HIKES THAT WOULD HIT MIDDLE AND LOWER-INCOME AMERICANS

Biden Has Pledged To Bring Back Obamacare’s Individual Mandate, Which Is A Tax On Americans Who Don’t Buy Health Insurance

In July 2019, Biden Said That He Will “Bring Back The Individual Mandate.” CNN’S CHRIS CUOMO: “Would you bring back the individual mandate?” JOE BIDEN: “Pardon Me.” CUOMO: “Would you bring back the individual mandate?” BIDEN: “Yes, yes I’d bring back the individual mandate.” (CNN’s “New Day,” 7/5/19)

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Obamacare Imposed A Tax On Individuals Who Did Not Comply With Obamacare’s Minimum Essential Coverage Provision, Known As The Individual Mandate. “As you probably know by now, Obamacare imposes a penalty on individuals who fail to have a certain level of health insurance coverage for any month of the year. This requirement is commonly called the individual mandate, and the penalty is the cost of noncompliance. … Unless you are exempt, you will owe the penalty if you do not have minimum essential coverage for yourself and your dependents. Minimum essential coverage includes certain government sponsored programs (such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and TRICARE), eligible employer-sponsored plans, plans obtained in the individual marketplace, certain grandfathered group plans, and certain other coverage specified by the Feds.” (Bill Bischoff, “Beware of the 2016 Obamacare individual mandate penalty,” MarketWatch, 10/27/15)

  • In 2016, The Individual Mandate Was The Higher Of $695 Per Adult And $347.50 Per Child Or 2.5 Percent Of Income. “The penalty you pay for not having health coverage is either a dollar amount or a percentage of family income, whichever is greater. For the law’s first year, 2014, the law set the annual penalty at $95 per adult and $47.50 per child, up to a maximum of $285 per family—or 1 percent of family income, whichever is greater. For 2015, the penalty was set at $325 per adult and $162.50 per child, up to a maximum of $975 per family—or 2 percent of family income, whichever is greater. For 2016 and beyond, the law set the penalty at $695 per adult and $347.50 per child, up to a maximum of $2,085 for a family—or 2.5 percent of income, whichever is greater. Penalties are to rise with inflation.” (“What Is the Individual Mandate for Health Care Reform?” Turbotax, Accessed 3/12/20)

In 2015, 58 Percent Of People Who Paid The Individual Mandate Tax Made Under $50,000. (Andrew Minicozzi, “Modeling The Effects Of The Individual Mandate On Health Insurance Coverage,” Congressional Budget Office, 11/14/17)

In 2016, Nearly 5 Million Americans Were Forced To Pay The Individual Mandate Penalty, Costing Them $3.6 Billion. (“Obamacare’s Poverty Tax: Americans Paying individual Mandate Tax Penalty,” Senator Steve Daines, 2016)

  • 77 Percent Of These Taxpayers Earned Less Than $50,000 A Year. (“Obamacare’s Poverty Tax: Americans Paying individual Mandate Tax Penalty,” Senator Steve Daines, 2016)

  • 34 Percent Of These Taxpayers Earned Less Than $25,000 A Year. (Alex Hendrie and Gillian Richards, “GOP Tax Cuts Abolished Obamacare Individual Mandate Tax,” Americans For Tax Reform, 10/9/18)

Biden Previously Said He Would Support A Carbon Tax, And His Campaign Has Not Ruled It Out

In September 2019, Biden Has Said He Would Support A Carbon Tax. CNN’S ANDERSON COOPER: “Would you support a carbon tax? Some other candidates say they would.” JOE BIDEN: “Yeah, no, I would.” (Joe Biden, Climate Crisis Town Hall, CNN, 9/4/19)

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When Asked In August 2020 To Comment On Whether Biden Supported A Carbon Tax, His Campaign Declined To Disavow It, Even Though A Carbon Tax Was Not Included In His Climate Plan. “For the record: Biden campaign spokesperson Matt Hill declined to comment. Public information about the nominee’s positions compel some reading between the lines. The campaign’s June 2019 plan includes language calling on Congress to create an ‘enforcement mechanism’ to cut carbon emissions, which at the time the campaign said indicated a carbon price. Its July plan, which is meant to complement the earlier draft, doesn’t repeat that language but does include a clean-electricity standard, which could impose an implicit price on electricity emissions.” (Amy Harder, “Joe Biden Unlikely To Push Carbon Tax As Part Of Climate Change Plan,” Axios, 8/20/20)

BIDEN IS PUSHING A $4 TRILLION TAX HIKE, MORE THAN DOUBLE WHAT CLINTON PROPOSED

Multiple Analyses Show Biden Would Hike Taxes By $4 Trillion

According To The Tax Policy Center, Biden Would Hike Taxes By $4 Trillion Over The Next Decade. “Biden would increase income and payroll taxes on high-income individuals and increase income taxes on corporations. He would increase federal revenues by $4.0 trillion over the next decade. Under his plan, the highest-income households would see substantially larger tax increases than households in other income groups, both in dollar amounts and as share of their incomes.” (“An Analysis of Former Vice President Biden’s Tax Proposals,” Tax Policy Center, 3/5/20)

According To The Tax Foundation, Biden Would Hike Taxes By $3.8 Trillion Over Ten Years. “Based on the Tax Foundation General Equilibrium Model, we estimate that, on a conventional basis, Biden’s plan would increase federal tax revenue by $3.8 trillion between 2021 and 2030 relative to current law.” (Huaqun Li, Garrett Watson, and Taylor LaJoie, “Details And Analysis Of Former Vice President Biden’s Tax Proposals,” Tax Foundation, 4/29/20)

According To The Penn Wharton Budget Model, Biden Would Hike Taxes By $3.7 Trillion.  “Relative to current law, PWBM projects that the updated Biden tax plan would raise between $3.1 trillion (including macroeconomic effects) and $3.7 trillion (not including macroeconomic effects) over fiscal years 2021-2030 while decreasing GDP by 0.6 percent in 2030 and 0.7 percent in 2050.” (“The Updated Biden Tax Plan: Budgetary, Distributional, And Economic Effects,” Penn Wharton, 3/10/20)

Biden’s Tax Hike Is More Than Double What Hillary Clinton Proposed, The “Most Expensive” Seen From A Presidential Nominee In Modern Times

Biden’s $4 Trillion Tax Hike Is More Than Double What Hillary Clinton Proposed In 2016. “Joe Biden's tax plan would raise taxes by $4 trillion over the coming decade, mostly paid by wealthier taxpayers, the nonpartisan Tax Policy Center estimated Thursday. The analysis shows that the former vice president’s tax agenda is well to the left of past Democratic presidential campaigns. The same group, for instance, projected that Hillary Clinton’s 2016 tax proposal would have increased taxes by $1.4 trillion over a decade.”  (Jay Heflin, “Biden Tax Plan Would Raise $4 Trillion, More Than Twice The Hike Proposed By Clinton In 2016,” Washington Examiner, 3/5/20)

  • CNBC Business Reporter Robert Frank Described Biden’s Tax Plan As “The Most Expensive Democratic Plan We Have Seen From Any Democratic Candidate In Recent History.” ROBERT FRANK: “Well, the truth is that, Joe Biden, even though he is portrayed as a moderate is offering the most expensive Democratic plan that we have seen from any Democratic candidate in recent history.  Hillary Clinton’s plan was 1.5 trillion. Biden’s plan is $4 trillion.”  (CNBC’s “Closing Bell,” 5/22/20)

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Biden’s Tax Plan Would Shrink The Economy And Kill 585,000 Jobs

Biden’s Tax Plan Would Shrink The Economy By 1.5 Percent And Kill 585,000 Jobs According To The Tax Foundation. “According to the Tax Foundation General Equilibrium Model, Biden’s tax plan would reduce the economy’s size by 1.51 percent in the long run. The plan would shrink the capital stock by 3.23 percent and reduce the overall wage rate by 0.98 percent, leading to 585,000 fewer full-time equivalent jobs.” (Huaqun Li, Garrett Watson, and Taylor LaJoie, “Details And Analysis Of Former Vice President Biden’s Tax Proposals,” Tax Foundation, 4/29/20)

The Penn Wharton Budget Model Says Biden’s Tax Hike Would Shrink The Economy Over Both A 10-Year And 30-Year Period.  “Relative to current law, PWBM projects that the updated Biden tax plan would raise between $3.1 trillion (including macroeconomic effects) and $3.7 trillion (not including macroeconomic effects) over fiscal years 2021-2030 while decreasing GDP by 0.6 percent in 2030 and 0.7 percent in 2050.” (“The Updated Biden Tax Plan: Budgetary, Distributional, And Economic Effects,” Penn Wharton, 3/10/20)

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