
Details And Analysis Of President Joe Biden’s Tax Proposals: Highlights
Key Findings President Joe Biden’s tax plan he released before the election, would enact several policies that would increase taxes on individuals with income above $400,000. This includes raising individual income, payroll taxes, and capital gains. He would also increase corporations’ taxes by imposing a corporate minimum book tax and increasing the corporate income tax rate. Biden’s plan would increase tax revenue by $3.3 trillion over the next decade on a conventional basis. The project would collect about $2.8 trillion the next decade when accounting for macroeconomic feedback effects. It is lower than we initially estimated due to the coronavirus pandemic and economic downturn’s revenue effects and new tax credit proposals introduced by the Biden campaign. The Biden tax plan would lessen GDP by 1.62 percent over the long term, according to the Tax Foundation’s General Equilibrium Model. Regularly, the Biden tax plan by 2030 would take to about 7.7% less after-tax income for the top 1% of taxpayers and about a 1.9% decline in after-tax income for all taxpayers on average. Details of the Plan On income earned above $400,000, imposed 12.4% on Survivors, Old-Age, and Disability Insurance (Social Security) payroll tax, and divided equally between the employees and employers. It would create a “donut hole” in the current Social Security payroll tax, where compensations are not taxed salaries between $137,700, the current wage gap, and $400,000. Reverts the highest tax rate on individual income from 37% to the taxable incomes above $400,000 to the pre-tax reform and jobs Act standard of 39.6% on personal income above $400000 under the new legislation. Taxes long-term capital gains and eligible dividends at the usual income tax rate of 39.6% on compensations above $1 million and eliminates step-up in basis for capital gains taxation. Caps the tax benefit of the itemized deductions