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Biden tax plan would not raise taxes on majority of Americans

 

CLAIM: By reversing President Donald Trump’s tax cuts, Democratic presidential nominee Joe Biden would raise taxes on 82 percent of Americans.

THE FACTS: A popular but false post on Facebook claims, “By reversing the tax cuts @realDonaldTrump signed into law, Joe Biden would raise taxes on 82 percent of Americans.” The quote is attributed to Ronna McDaniel, chairwoman of the Republican National Committee, who made similar inaccurate claims at the party’s convention in August.

In fact, Biden says he won’t raise taxes on anyone making less than $400,000, which translates to a small portion of American households. “If you’re looking only at individual income taxes and payroll taxes, we find that about 2 percent of all families would see their taxes go up directly under the Biden plan — almost all of them in the top 5 percent by income,” John Ricco, a senior tax analyst at the University of Pennsylvania’s Penn Wharton Budget Model, told The Associated Press in an email. Biden has also proposed repealing part of Trump’s corporate tax break.

Trump lowered that tax rate from 35 percent to 21 percent, and Biden has proposed raising it to 28 percent. The false social media posts about Biden raising taxes on 82 percent of Americans appear to misstate the Penn Wharton Budget Model’s analysis of how a corporate tax increase will impact the country. Ricco said the model predicts that 82 percent of families will be affected long-term by an increase in corporate taxes, but not because their individual taxes would go up. “Instead of seeing their taxes go up directly, those additional families are paying the corporate tax hikes in the form of lower investment returns or lower wages over time,” Ricco wrote.

For the bottom 90 percent of American households in terms of income, the Penn Wharton Budget Model predicts the passed down costs of the corporate tax increase in the future would average between $25 and $690, depending on income. But for those same households, the model found that tax credits proposed in Biden’s plan would more than offset those costs on average.

— Associated Press writer Jude Joffe-Block reported from Phoenix.