When Joe Biden ran for president, his campaign platform included dozens of relatively specific tax proposals. They ranged from expanding refundable tax credits for low- and moderate-income households to increasing payroll taxes for high-income workers to major changes in the way the US would tax multinational corporations.
And, with a few notable exceptions, President Biden’s tax agenda so far has tracked closely with that of candidate Biden. He has revised some ideas, added a few new ones, and—at least for now—left out some others.
Later this month, the Treasury Department will release more detailed tax proposals in what’s come to be called the Green Book (thanks to the color of its cover). At that point we’ll know even more about Biden’s tax agenda. But to help track its progress, the Tax Policy Center has created a comprehensive matrix that compares Biden’s campaign plans with his presidential proposals to date.
At the very highest level, Biden essentially is doing what he promised last year: Raise taxes on households making $400,000 or more and on corporations. However, the tax hikes he’s proposed so far appear to raise individual income and payroll taxes by less overall than he promised in the campaign.
At the same time, his proposals are intended to exempt those making less than $400,000 from tax hikes. But until he makes more details available it is not possible to know how closely he’ll be able to hew to that vow. Two key questions the White House has yet to definitively answer: How does it define income and would the $400,000 threshold apply to single filers, couples filing jointly, or both?
When it comes to individual income taxes, Congress already has enacted temporary expansions to the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and the child and dependent care tax credit (CDCTC), all ideas Biden proposed during the campaign.
Keeping with the his campaign pledge, Biden would raise the top individual income tax rate from 37 percent to 39.6 percent, where it was before passage of the 2017 Tax Cuts and Jobs Act (TCJA). He’d also tax capital gains at that rate for households with total annual income of $1 million or more.
In addition, Biden would tax unrealized capital gains at death, a major change from current law where unrealized gains accrued over a decedent’s lifetime go untaxed.
As president, Biden also generally has tracked his campaign’s corporate tax changes. He’d raise the corporate rate from 21 percent to 28 percent, impose a tougher new minimum tax on US-based multinational corporations, and impose a minimum tax on the “book” income that companies report to their shareholders.
At the same time, Biden has proposed repealing a TCJA tax break for US-based multinationals that sell goods overseas based on patents and copyrights held in the US, an initiative not in his campaign platform. But he has yet to propose a new “Made in America” tax break for some US investment, an idea that was.
Even before publishing the Green Book, the White House has been more specific than the campaign in some areas. For example, last year Biden said only that he’d increase compliance among high-income taxpayers. But he’s now proposed an $80 billion increase in the IRS budget over a decade as well as a new requirement that banks report to the IRS additional information on all their customers.
There are a few key areas where Biden has yet to transfer his campaign platform to his governing agenda.
For example, candidate Biden said he would repeal all of the individual income tax cuts in the TCJA for those making more than $400,000 annually. But, as president, he has not specifically proposed scrapping all those TCJA provisions. One of the biggest is the special 20 percent tax deduction for qualified income of pass-through businesses such partnerships and sole proprietorships. TPC estimated last Fall that denying that deduction for those making $400,000 or more would raise $143 billion from 2022-2026.
In addition, while Biden would tax unrealized gains at death, the White House has not followed through on his campaign pledge to toughen the estate tax. The TCJA expanded the number of households that are exempt from the levy.
The largest single omission, however, is related to the payroll tax. Candidate Biden proposed an ambitious plan to restructure Social Security, including a more than $700 billion hike in payroll taxes paid by those making $400,000 or more. President Biden has yet to propose either the benefit changes or the tax hikes.
We’ll soon learn more about the details of Biden’s tax agenda. But, so far, the president has stuck relatively closely to the ideas he raised in the campaign. You may like them. You may hate them. But they shouldn’t surprise you.