Former vice president Joe Biden’s tax plan has stirred up plenty of controversy over the course of the 2020 election. In the weeks leading up to the election, President Trump has made it one of his central talking points. It’s election day in America, and here is what you need to know about Biden’s tax plan.
- Biden’s tax plan is aimed at the wealthy. Under his tax increases, the top 1% of households would see a 16% decrease in post-tax income in 2022, according to the Tax Policy Center. On average, that creates a tax increase of about $265,640 for very high-income households.
2. For middle-income Americans, Biden’s tax plan includes about $265 in annual benefits, an increase in dependent care credits, and a $15,00 tax credit for first-time homebuyers. In September, a study conducted by the University of Pennsylvania’s Wharton Business School found that under Biden’s tax plan, middle-income Americans would receive higher paychecks.
3. According to the Tax Foundation, the Biden plan would raise tax revenue between $2.8 and $3.3 trillion over the next decade. The Wall Street Journal reports that this is about a 6% increase in federal revenue compared to if Congress remained idle.
4. Biden aims to expand the Child and Dependent Care Tax Credit from $3,000 to $8,000. That credit would go from 35 percent to 50 percent refundable. He also plans to add $600 for children under 6. In addition, he is proposing targeted tax incentives for caregivers, child-care expenses, and first-time home buyers.
5. For corporations, Biden plans to increase the tax rate from 21 percent to 28 percent. He would also create a minimum tax on corporations with book profits $100 million or higher. Corporate foreign income would have double the tax rate, from 10.5 percent to 21 percent.