Debunking Tax Hike Claims Amid Biden’s Budget Proposal
As Americans filed their taxes, former President Donald Trump took to Truth Social to caution against potential tax increases under President Joe Biden. Trump’s post reminisced on the tax cuts from his administration, suggesting that Biden’s re-election could lead to “colossal tax HIKES.” However, this claim contrasts with Biden’s latest budget proposal, which indicates support for extending the tax cuts for individuals making less than $400,000—a continuation of the relief initiated during Trump’s tenure.
The 2017 Tax Cuts and Jobs Act (TCJA), which Trump referenced, indeed lowered taxes for many Americans. The Tax Policy Center’s analysis showed an average reduction in individual income taxes by about $1,260 in 2018, with middle-income earners experiencing an $800 cut. Yet, the assertion that everyone benefited from the TCJA is not entirely accurate; approximately 65% of taxpayers received a cut, while 6% faced increases.
Contrary to Trump’s assertions of impending tax hikes, Biden’s fiscal changes thus far have included corporate tax adjustments and tax reductions for families by expanding the child tax credit. During his campaign, Biden did propose tax increases targeting high-income earners and corporations, but these would not have resulted in the drastic tax hikes for the average American that Trump predicted.
Biden’s fiscal year 2025 budget reiterates his stance against raising taxes on those earning less than $400,000. The plan suggests increasing the corporate income tax rate and restoring the top individual tax rate to 39.6%, alongside proposing an extension of the expanded child tax credit. To balance these extensions, Biden aims to ensure that the wealthy and corporations contribute their fair share.
Analyses by the Tax Foundation reveal that Biden’s budget would redistribute income from high earners to low earners, with the bottom 60% of earners seeing increases in after-tax income. However, the same analysis warns of potential long-term economic harm, predicting a decrease in GDP and employment over a decade.
Despite these projections, it’s important to note that presidential budget plans are more indicative of priorities than actionable legislation. While Biden has succeeded in establishing a corporate minimum tax rate, the full realization of his budget proposals remains uncertain.
Amidst these discussions, it is clear that Biden’s budget does not call for “colossal tax hikes” on the typical American family, challenging the narrative put forth by Trump on the tax filing deadline.
