President Biden Wants Taxes to Go Up—Way Up—for High Income Households

TPC shows how Biden’s tax plan would affect different households. TPC projects that in 2022, households making $26,000 or less would receive an average tax cut of about $600. Taxes for low-income families with children would plunge by an average of $3,200. TPC’s Howard Gleckman calls this a feature, not a bug, in Biden’s plan: Households making between about $52,000 and 92,000 would pay on average about $300 less in taxes. By contrast, those  in the top 1 percent would pay an average of about $213,000 more, and those in the top 0.1 percent (who make at least $3.6 million) would pay an average of nearly $1.6 million more, or almost 17 percent of their after-tax income. 

Read their lips: No new taxes. Sen. Mitt Romney and others in a bipartisan group of 20 senators are floating the idea of a roughly $900 billion infrastructure bill funded without any tax increases. Even some in the group are skeptical but willing to hear more. Says Democrat John Tester, “I would consider it, sure. There’s plenty of pots of money out there – hopefully they’re not all smoke and mirrors.”  

What will China do with a global corporate tax deal? The Wall Street Journal reports (paywall) on the question. While the deal reached by the Group of 7 would have few tax implications for China, where tax rates are already higher than the G-7-proposed 15 percent minimum tax. But the Chinese territories of Hong Kong and Macau have lower tax rates. And if the G-7 plan wins support in the Group of 20, which  includes China, the agreement would test the Chinese government’s commitment to international consensus.

Tune in to TPC’s Prescription today at noon. Kim Clausing, Deputy Assistant Treasury Secretary  for Tax Analysis, will join TPC’s Howard Gleckman today to discuss Biden’s tax proposals as well as efforts to design an international corporate tax regime. Tune in today at noon here.

Massachusetts’ Constitutional Convention to put a millionaire’s tax on the November ballot. Lawmakers voted yesterday to advance a significant change to state tax policy. Massachusetts currently has a flat income tax, but the referendum would allow the state to levy a 4 percent surtax on household income above $1 million to take effect in 2023. 

But a majority of millionaires might not be miffed. The latest national CNBC millionaires survey shows that almost half favor a higher capital gains tax to help fund education reform. More than half also support a wealth tax on individuals worth $10 million or more. And most millionaires have no plans to change the way they manage their finances, even though they expect higher tax bills under President Biden.



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