During the run-up to the November election, mainstream media largely ensured that voters believed that then-presidential candidate Joe Biden would not raise taxes on middle-income Americans. Period.
“Nobody making under 400,000 bucks would have their taxes raised, period, bingo,” the Washington Post quoted Biden as saying in August 2020 as he debated Trump on tax policy.
It was a Biden claim the Post rated as “accurate.”
However, now that Biden is president and his tax plans are being contemplated as a matter of policy, it seems that the middle class (and the poor) will be hit with a tax increase after all.
And the question was never in doubt.
“A top White House economist made clear on Monday that Biden doesn’t want to impose costs on anyone earning less than $400,000 per year,” Michael Strain, an economist at the American Enterprise Institute, wrote this week before revealing the big “but.”
“At the same time, the White House is likely to push for a higher corporate tax rate,” Strain said. “These goals are incompatible. If the corporate rate goes up, it will reduce the incomes of the middle class.”
The Tax Policy Center, a joint venture between the Urban Institute and the Brookings Intuition — both left-leaning think tanks — found as early as March of 2020 that Biden’s tax policy would, in fact, raise taxes on all Americans.
“In 2021, the proposals would increase taxes on average on all income groups, but the highest-income household would see substantially larger increases, both in dollar amounts and as a share of their incomes,” ” the TPC reported.
All income groups on average means that even working- and middle-class Americans will feel a tax increase.
The TPC economists said that 20 percent of any corporate tax increase under Biden’s plan would be absorbed by workers, while the Congressional Budget Office claims that corporate tax increases under Biden would hit workers 25 percent harder, at about 25 percent of their income.
As Howard Gleckman at TPC explains it: “[T]hose low- and middle-income households would not be writing bigger checks to the IRS. Rather, their incomes would be cut through lower wages or smaller returns to their investments.”
While the think tanks say that for lower-income and middle-income households the hit will only average $30 to $260 tax increases this year, it misses the point that not all of the households will feel the tax increases equally.
Some working families will have no tax increase, others with face a 100 percent tax increase in the loss of jobs.
The Tax Foundation says that 159,000 jobs would be eliminated to corporate taxes under Biden’s plan.
That means that 159,000 working-class Americans will be taxed $3.36 billion dollars at an average wage of $40,000 in 2021.
That equals a 100 percent tax increase on some working families. And no job.