A new report released yesterday shows that should Democratic nominee Joe Biden win the election in November, he’ll more than live up to his promise to raise our taxes.
The report was released by the Committee for a Responsible Federal Budget (CRFB). It estimates that Biden’s proposed policies would increase the amount of taxes collected by the government by about $4.3 trillion over 10 years. For comparison, President Trump’s tax cuts would decrease tax revenue for the government by about $1.7 trillion over the same period.
The biggest difference between the two candidates is their tax policies. The CRFB says at the very low end of their estimates, Biden would raise taxes by $3.65 trillion by 2030. At the high end, that amount balloons to $6.6 trillion.
These tax increases would primarily come from Biden’s plan to raise the corporate tax rate. He plans to get it back up to 28% from the current 21% rate. Biden also plans on raising $1.8 trillion in tax revenue by adding a 15% minimum tax on “book” profits.
He would also raise taxes on individuals making more than $400,000 per year. Biden would do so by increasing the tax rate from 37% up to 39.6%. Investors would also feel the pinch. Biden wants to nearly double the capital gains tax rate from 20% to 39.6% for anyone making more than $1 million per year. These policies, along with the elimination of the “stepped-up basis” for capital gains upon death, would increase taxes by $1.4 trillion according to the CRFB. However, their high-end estimate jumps to $2.3 trillion.
Are you starting to get queasy?
The hits just keep coming. Biden also wants to raise $900 billion by increasing the minimum payroll tax for Social Security, another $100 billion by charging large “financial risk fee” banks. He also wants to raise it by $100 billion more by having the IRS crack down on tax evasion.
The CRFB report notes that Trump’s plan is all tax cuts and no tax hikes.
While it doesn’t have a concrete plan to work from, based on what the Trump administration has done in the past, the report assumes that President Trump would extend his Tax Cuts and Jobs Act of 2017, as well as cutting income taxes for middle-class earners, reduce the capital gains tax rate to 15%, index capital gains taxes to inflation and cut the 22% marginal tax rate for individuals down to 15%.
The report notes that President Trump could potentially save Americans more than $2.45 trillion in taxes. He could do so with a few additional tax cuts.
It should be clear to everyone which candidate is pro-business and pro-capitalism. Increasing the tax burden on individuals and businesses that are still trying to recover from the pandemic makes no sense. It would also threaten the economic recovery.