Biden has repeatedly claimed his plans would not raise taxes on anybody making under $400,000. A new analysis finds his signature Build Back Better plan would do just that.
President Biden has repeatedly claimed that his plans would not raise taxes on anybody making under $400,000 a year. But a new analysis from the Tax Policy Center — hardly a conservative source — finds that his signature Build Back Better plan would do just that.
“Taking into account all major tax provisions, roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022,” according to the analysis. True, the analysis finds that the increases would be relatively small. “Among those with a tax increase, low- and middle-income households would pay an additional $100 or less on average. Those making $200,000-$500,000 would pay an average of about $230 more,” it reads.
Yet there were many occasions on which Biden reiterated his tax pledge, and he was quite clear that there would not be any increases, even small ones.
“Here’s the deal,” he said on September 3, 2020 (video below). “I pay for every single thing I’m proposing without raising your taxes one penny. If you make less than 400-grand you’re not going to get a penny tax.”
But this isn’t the only way that the tax plan runs counter to Biden’s campaign rhetoric, which blasted Republicans for giving tax breaks to the wealthy. The latest version of his plan would raise the cap on the SALT deduction.
The TPC analysis finds, “Despite what its promoters say, raising the cap to $80,000 would provide almost no benefit for middle-income households. It would reduce their 2021 taxes by an average of only $20. Even those making between $175,000 and $250,000 would get a tax cut of just over $400 or about 0.2 percent of after-tax income. By contrast, the higher SALT cap would boost after-tax incomes by 1.2 percent for those making between about $370,000 and $870,000 (the 95th to 99th percentile).”
A further breakdown shows that 65.6 percent of millionaires — or nearly two thirds — would receive a tax cut, and that the average cut would be $16,760.
UPDATE: To avoid any confusion, I see some people on Twitter are focusing on a different part of the analysis that finds it would be a net tax increase for millionaires. So how to reconcile it with what I wrote above? Well, the Tax Policy Center finds that about two-thirds of millionaires would get a tax cut, and one-third would get a rather large tax increase. So on net, that works out to an increase of about $68,000 on millionaires as a group. But still, it means that two-thirds of millionaires would pay lower taxes under the Democrats’ plans.
