Biden's New Tax Plan to Cost America’s Wealthiest Extra $1.5 Million Each

Published July 6th, 2021 - 08:30 GMT
Biden's New Tax Plan to Cost America’s Wealthiest Extra $1.5 Million Each
These programs include free community college, universal pre-K, bolstered elderly and disabled care and child tax credits for low, middle-income families. (Shutterstock)
Highlights
If President Joe Biden's massive spending proposal passes, the top 0.1% of earners could end up paying an additional $1.56 million each in taxes next year

The wealthiest American earners could pay $1.5 million more in taxes, according to a new analysis based on if Congress passes Joe Biden’s proposed tax hikes to pay for his so-called ‘human infrastructure’ plan.

The nonpartisan Urban-Brookings Tax Policy Center found that the top 0.1 per cent of Americans – those who earn $3.6 million or more – would pay another $1.56 million each in federal taxes each year on top of the taxes they already pay.

This increase would cause the biggest earners in the U.S. to lose 16.8 per cent in after-tax income.

If Biden’s hikes are approved by Congress, according to the analysis, those in the top 1 per cent would pay an additional $213,530 in taxes while those in the top 4 per cent would pay $5,090 more per year.

An Urban-Brookings Tax Policy Center analysis show those int he top 1 per cent would pay an additional $213,530 in taxes and the top 4 per cent would pay $5,090 more per year

Biden’s ‘Build Back Better’ economic plan includes an infrastructure proposal and an overhaul on social welfare programs and climate change initiatives.

While a group of Republicans reached an infrastructure deal with Biden last month, the two sides are much further away on reaching any sort of compromise on the ‘Families Plan’ part of Biden’s agenda.

Partners in the infrastructure compromise laud the plan because they say it won’t be financed by raising taxes.

On the other hand, Republicans are not sold on the ‘human’ infrastructure part of Biden’s economic agenda because it includes environmental initiatives and expanding government-funded social programs.

These programs include, but are not limited to, providing free community college, establishing a universal pre-kindergarten nationwide, increasing government-funded care for the elderly and disabled and giving children tax credits to low and middle-income families.

Should the plan pass Congress, likely with no Republican support, the child tax credit from Biden’s American Rescue Plan, would get extended through 2025 and give low and middle income parents $3,000 for each child six through 17-years-old and $3,6000 for children under six.

The benefit would start to decrease from that amount for individuals making more than $75,000 and married couples making $150,000 or more.

Biden wants these social welfare programs to be paid for by reversing Donald Trump’s 2017 tax cuts, which would raise the top capital gains tax for those earning more than $1 million from 20 per cent to 39.6 per cent.

It would also get funded by bringing back the top individual income tax rate and increasing it by nearly 3 per cent for families with a combined income of $509,3000 and individuals earning $452,700.

 


© Associated Newspapers Ltd.

You may also like