WH walks back Biden income tax promise from campaign
During his presidential campaign and up until this week, President Joe Biden had repeatedly said that he would hike taxes for individuals making more than $400,000 per year. However, the White House recently walked back that promise by a dramatic margin.
At Wednesday’s daily press briefing, White House press secretary Jen Psaki clarified that Biden’s proposed tax increase would affect individuals who make $200,000 annually if they are married to a person who earns the same amount.
Psaki said that the proposed $400,000 threshold for tax increases applies to “families” instead of individuals. Though, she did not indicate a specific threshold for individual earners.
This doesn’t match what she had said at Monday’s briefing that: “The President remains committed to his pledge from the campaign that nobody making under $400,000 a year will have their taxes increased.”
Psaki’s clarification on Wednesday came later on the same day that Biden appeared to indicate that the cutoff for individuals’ income would be $400,000.
“Yes, anybody making more than $400,000 will see a small to a significant tax increase,” Biden told George Stephanopoulos in an interview on ABC’s “Good Morning America” that aired Wednesday.
“If you make less than $400,000,” the president added, “you won’t see one single penny in additional federal tax.”
Although, Biden conceded that Republican lawmakers will very likely be opposed to a drive to raise taxes.
“I may not get [Republican support], but I’ll get the Democratic votes for a tax increase. If we just took the tax rate back to what it was when [George W.] Bush was president—[when] the top rate paid 39.6% in federal taxes—that would raise $230 billion,” he said. “Yet they’re complaining because I’m providing a tax credit for child care for the poor, from middle class?”
No formal legislative package has been put forward yet, it should be noted.
Any tax hikes included in the legislation would likely take effect starting next year. However, some lawmakers are hesitant to raise rates until the economy sees a fuller recovery from the coronavirus pandemic, which has negatively affected millions of Americans’ incomes.
Nonetheless, in a report published Monday, unidentified people familiar with the matter reportedly told Bloomberg that Biden is aiming for it to be the first major tax increase since 1993 and provided some hints as to what might be included in such a proposal.
The proposed tax raises, according to the report, mostly resemble Biden’s proposals during the 2020 presidential campaign, when he promised to reverse former President Donald Trump‘s 2017 tax cuts on “day one” in the Oval Office.
The tax hike proposals reportedly either under consideration or currently planned include: raising the corporate tax rate to 28% from 21%; raising the income tax rate on individuals making over $400,000; paring back tax preferences for pass-through businesses, such as limited-liability companies or partnerships; expanding the estate tax; and establishing a higher capital gains tax rate for people making at least $1 million annually.
You can follow Douglas Braff on Twitter @Douglas_P_Braff.