New analysis of President Biden's tax proposals has suggested that nearly 60 percent of Americans may still face bigger bills, despite...
New analysis of President Biden's tax proposals has suggested that nearly 60 percent of Americans may still face bigger bills, despite his continued promise that no one earning less than $400,000 a year would be impacted.
The findings from the nonpartisan Tax Policy Center show that the majority of the burden would be placed on America's richest families - also known as the one-percenters - earning more than $800,000.
Around 99.8 percent earning between $500,00 and $1million will pay more an average of $8,810 more in taxes each year.
But low and middle-income families who have been told they would avoid a hike in rates may also have to pay extra. These tax bills may be offset by tax credits, but experts suggest that families earning between $75,000 and $500,000 may still get pinched.
This is not as a result of direct taxes on income but of the impact of the other hikes in rates, such as the corporate tax rise.
New analysis of President Biden's tax proposals has suggested that nearly 60 percent of Americans may still face bigger bills, despite his continued promise that no one earning less than $400,000 a year would be impacted. The findings from the nonpartisan Tax Policy Center show that the majority of the burden would be placed on America's richest families - also known as the one-percenters - earning more than $800,000
Three-quarters of households earning between $75,000 and $100,000 annually would face paying an additional $440 per year in taxes under Biden's tax hikes, according to the data released last week.
About 69 percent of those earning between $100,000 and $200,000 would see their yearly tax bill rise by $830 on average, according to the analysis.
Meanwhile, 83.7 percent of those earning between $200,000 and $500,000 would see an increase of $2,040 on average.
While Biden is not directly taxing Americans earning less than $400,000 a year, some small and middle income families will be hit indirectly through corporate tax hikes, lower investment earnings and shrinking compensation.
Many, however, could benefit from the wider rollout of child tax credits and earned income tax credit.
Howard Gleckman, a senior fellow at the Tax Policy Center, wrote: 'For those looking to see if Biden kept his promise to not raise taxes for those making $400,000 or less, the answer is: Mostly, but not entirely.
'Including corporate tax increases, most households would pay more in 2022. About three-quarters of middle-income households would face a tax increase averaging about $300. But nearly all would be a result of those higher corporate taxes.'
When factoring in credits, a household making between $100,000 and $200,000 would see its overall tax burden shrink by $110.
Households making between $75,000 and $100,000 would pay about $240 less, while those earning between $50,000-$75,000 could save an average of $540.
None of these proposals have been set in stone and would need to be signed into law by Congress before they are enacted.
The Biden administration, Democrats and Republicans are still negotiating to try and reach a deal on a final total for the package.
The Biden administration has insisted there will need to be tax hikes to pay for the final plan, which based on current talks between parties could be around $1.2trillion.
However the number could still decrease as the Democrats and White House look for a way to get it signed into law.
David Williams from the Taxpayers Protection Alliance told DailyMail.com that there is a 'lot to unpack' from the findings, but ultimately Americans at all income levels will feel the pinch.
'Biden is trying to play the class warfare game by raising corporate taxes and other business taxes that he says will only affect the wealthy. The truth is that these taxes will be felt by everybody,' he said.
'It is becoming obvious to the President that these tax increase are very unpopular because there has been no serious legislative movement to get these tax increases through Congress'.
The Biden administration is still negotiating with Republicans over the final price tag of the the president's infrastructure bill.
He started out with a $2trillion proposal, but since then he has shrunk the package with the latest figure suggested being $1.2trillion.
The tax hikes on the wealthy that headline the way to pay for the proposals has received strong pushback from Republicans who want to keep the tax cuts Donald Trump signed when in office.
But low and middle income families who have been told they would avoid a hike in rates may also have to pay extra. These tax bills may be offset by tax credits, but experts suggest that families earning between $75,000 and $500,000 may still feel the pinch
Under Trump's plans, only individuals making more than $518,401 pay the top marginal tax income rate of 37 percent. Couples would have to jointly earn $622,051.
Williams also pointed out that raising corporate taxes will mean higher prices for consumers in general because they pass on the increase rates.
'These higher prices disproportionately hurt lower-income folks who have less money to spend on everyday household goods.
'So, yes, technically raising the corporate rate is a tax on business so Biden can say that he didn’t raise taxes on the Middle Class, but realistically it will be the Middle Class paying the tax.
David Williams from the Taxpayers Protection Alliance told DailyMail.com: 'Biden is trying to play the class warfare game by raising corporate taxes and other business taxes that he says will only affect the wealthy. The truth is that these taxes will be felt by everybody'
Williams is also concerned that the Obamacare 'penalty' Trump reversed could return following the Supreme Court's decision to keep the Affordable Care Act in place.
'There is a possibility that could come back which would mean that people at all income levels would be affected.'
He also explained that while credits may offset some of the hikes initially, it is a 'merry go-round'.
'Because it is refundable credit, the policy in itself will result in tax hikes, which in turn would have to be "offset', according to Biden's logic.
'The child tax credit starts to phase out for singles making $75,000 and couples making $150,000. The credit phases out by $50 for every $1,000 of income over the threshold amount for all filers.
'It will be a tax hike for people without kids since they won't be eligible for tax credit. So, middle class couples or singles without kids will see a tax hike. It also unfairly punishes (many liberal) young people who want to work before having kids.'
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