While some critics say Democratic presidential Joe Biden is too moderate in his campaign proposals, one study shows just how much he is actually promising voters.
As the Penn Wharton Budget Model explained in its recent analysis, the former vice president’s platform is the most expensive in 50 years and would, if implemented, lead to massive tax increases over the next decade.
“Lower investment returns and wages”
According to the recent report, the Biden plan would hike taxes on Americans by a total of $3.4 trillion over the next year, although that will still fall short of the commitments he is making on the campaign trail.
His proposal calls for new corporate taxes totaling $1.4 trillion, almost $1 trillion more in payroll taxes, and $944 billion in individual income taxes.
Roughly 80% of the income tax increase will be paid by the top 1% of earners, according to the analysts.
Biden’s tax plan takes aim at the 2017 tax cuts implemented by President Donald Trump. It would both return the top income tax rate to 39.6% from its current 37% and boost the corporate tax rate by seven points to 28%.
While those earning less than $400,000 per year would also see a decrease in income according to the analysis, it is due to “lower investment returns and wages” instead of an increase in income taxes.
$2 trillion added to the deficit
“Under the Biden plan, households with adjusted gross income (AGI) of $400,000 per year or less would not see their taxes increase directly but would see lower investment returns and wages as a result of corporate tax increases,” the report states. “Those with AGI at or below $400,000 would see an average decrease in after-tax income of 0.9 percent under the Biden tax plan, compared to a decrease of 17.7 percent for those with AGI above $400,000 (the top 1.5 percent by income).”
Despite the massive tax increases, the Biden plan would still reportedly be insufficient to fund the spending plans his campaign has promised.
With more than $5 trillion tied to various projects over the next decade, the new projection shows that Biden’s proposal would add another $2 trillion to the federal deficit.
Among the sums included in that figure are $1.6 trillion in infrastructure, $650 billion in housing, $290.7 billion in Social Security benefits, $1.6 trillion in health care, and $527 billion in paid family leave funding.
After the increase in spending necessitated for the response to the coronavirus pandemic, many American voters are sure to reject a plan that will only exacerbate the problem — while raising taxes on many households — with a decadelong federal spending spree.