Speaking to a crowd of potential campaign donors as part of a virtual fundraiser, Joe Biden said what many had expected all along. He said, if he wins the election in November, he’s going to nuke almost all the Trump tax cuts that helped propel the economy to record levels.
He did, however, say that even amongst his Democratic supporters it wasn’t going to be a popular move. Biden added, “a lot of you may not like that.”
According to reporters covering the event, Biden said, “I’m going to get rid of the bulk of Trump's $2 trillion tax cuts, and a lot of you may not like that, but I'm going to close loopholes like capital gains and stepped-up basis.”
President Trump cut the corporate tax rate from 35% down to 21% as part of the 2017 Tax Cuts and Jobs Act. This is a move Biden will partially undo. He said he would raise the corporate tax rate back up to 28%. He projects that this would raise an additional $1.3 trillion in tax revenue over the next decade.
Placing Deduction Limits
Biden also said he would consider capping deductions after President Trump nearly doubled the size of the standard tax deduction in 2017.
He attacked the President’s tax cuts and tried to paint them as the reason the country is facing a record deficit. Biden called them “irresponsible sugar-high tax cuts had already pushed us into a trillion-dollar deficit,” and added, “Folks, this is going to be really hard work and Donald Trump has made it much harder to foot the bill” as the national debt soars during the coronavirus pandemic.
Many expect the deficit for fiscal 2020 to hit a record $3.8 trillion, fueled by stimulus spending as the country tries to recover from the worst pandemic in memory.
Of course, Biden doesn’t mention that prior to this year, the last time the deficit was over $1 trillion was in 2012, when he was Vice President.
To help our country recover, we need a “stronger, more inclusive middle class,” according to Biden and we’ll get that by investing “record sums of money” in clean energy innovation and infrastructure.
“We have to think as big as the challenge we face,” Biden added. “But this is America, there is nothing we cannot do if we do it together. But I think the country is ready.”
Effect of Reform on Tax Cuts
Americans For Tax Reform reveal that the middle class will be especially hit hard if Biden ends up in office and rolls back the Trump tax cuts.
A family of four earning the median income of $73,000 would see a $2,000 tax increase each year, a single parent (with one child) making $41,000 would see a $1,300 tax increase each year, small employers will face tax increases due to the increase in marginal income tax rates and the repeal of the Tax Cuts and Jobs Act 20% deduction for small business income and millions of households would see their standard deduction cut in half.
And according to Americans For Tax Reform, “Biden has a history of lying to the American people. He lied when he ran for Vice President in 2008 when he repeatedly said he would not support any form of any tax that imposed even ‘one single penny' of tax increase on anyone making less than $250,000. Biden shattered that promise upon taking office.”