According to Bloomberg News, millionaires could see much bigger tax bills if Democrat Joe Biden is elected president in November, but levies on most households below the top income brackets would stay about the same as under President Donald Trump, an outside analysis shows.
Biden’s tax proposals would have the top 0.1% of earners — those currently making about $3.3 million or more annually — paying a 43% rate on their income, according to the Penn Wharton Budget Model. That top group pays a rate of about 30.6% under Trump’s 2017 tax law, according to the report, which accounts for income, payroll and corporate duties.
The figures highlight the key dividing line between the two candidates when it comes to taxes. The Trump campaign has run ads saying Biden’s increases would crush middle-class families, but the data show there would be little effect for most who earn less than $400,000. Trump has said he wants to cut taxes again, but hasn’t released a plan on how he would do that.
Biden’s platform would increase the top rate to 39.6%, where it was before Trump’s overhaul pared it to 37%. The Democrat would also tax capital gains earnings the same as regular income for top earners, and impose an additional payroll levy on incomes above $400,000. Payroll taxes are currently only paid on the first $137,700 of income. About 80% of Biden’s increases would fall on the top 1% of earners, or those earning at least $710,000, according to the report.
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Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.