A bipartisan report from the Congressional Committee on Taxation again adds fuel to the fire that President Biden has broken his widely-touted campaign promise, publicized by his allies in the media during the 2020 presidential campaign, not to raise taxes on anyone making less than $400,000. Biden has proposed increasing corporate taxes, which will be to raise taxes on 98% of all taxpayers, says the analysis.
The report comes as America continues to debate measures to get the economy going for ordinary people after COVID lockdowns damaged the economy last year.
The analysis shows that Biden’s proposal to increase corporate taxes from 21% to between 25%-28% will largely be paid by the poor and middle class, the percentage of which affected will get larger over time. The Biden administration is proposing to raise corporate taxes under his American Jobs Plan, according to the non-partisan Tax Foundation.
“This study supports what we’ve long known corporate tax hikes are primarily borne by workers and retirees, and certainly the middle classthose making well below $400,000 a year,” said U.S. House Ways and Means Leader Rep. Kevin Brady (R-TX) and U.S. Senate Finance Committee Ranking Member Sen. Mike Crapo (R-ID). “America’s health and economic recovery remain very fragile and may get worse again before getting better. Unemployment is still too high and inflation is a real concern. Now is not the time to raise taxes on the very people we are asking to lead us out of this crisis.”
The analysis shows that 57 percent of that additional revenue ($15.8 billion) would come from taxpayers earning less than $500,000 per year in 2022, which will increase to 66.3 percent (or $26.8 billion) by 2031.
That doesn’t include the effects of the ownership interest in American companies represented by stock and bond investment.
Especially hard hit will be taxpayers between the $50,000 to $400,000 range. Of the more than 172 million taxpayers who would bear the burden of the increased corporate tax rate, 98.4 percent, or about 169 million, have incomes under $500,000, says the Committee report.
107.8 million U.S. taxpayers also have some taxable ownership stake in U.S. corporations. Of those 107.8 million U.S. taxpayers with a taxable holding of U.S. corporate equities and bonds, about 97.7 percent, or about 105 million, earn $500,000 or less a year.
The media has repeatedly claimed that Biden would not raise taxes on anyone making less than $400,000 and used extraordinary methods during the presidential campaign, including Washington Post Fact-Checker, Glenn Kessler, to support the patently false promise.
“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.
But as AIM has previously reported even before this new analysis, the Biden administration’s plans to raise corporate taxes is a violation of his promise.
“[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,” said Howard Gleckman at the Tax Policy Center. The money going to the government, after all, will have to come from someone’s pocket.
A tax increase is something that poor and middle-class Americans can’t afford ever, but it will be especially devastating to families as the country tries to recover from the COVID19 lockdowns.
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