Get ready for a GOP convention eager to brand Democrats as hungry for higher taxes
It’s likely to come up over and over at the Republican convention this week: President Donald Trump’s assertion that Joe Biden and Kamala Harris are eager to impose a $4 trillion tax increase on America.
It’s a tax increase, a Trump campaign ad says, that will be “crushing middle class families.”
While the $4 trillion estimate is largely accurate, the Democrats’ tax plan won’t devastate the middle class, said several independent analysts.
Taxes would go up slightly for lower and middle class earners under Biden’s plan, but most of the increases would be paid by the wealthy. Harris, the vice presidential nominee, supports most of Biden’s major ideas, and has long been an advocate for middle and lower income earner tax cuts.
“A substantial number of low and middle income people will receive benefits from the Biden and Harris style plans,” said Elaine Maag, principal research associate at the nonpartisan Tax Policy Center.
That hasn’t stopped the Trump campaign from launching a constant barrage of charges that, as the president put it, “they’re big taxers.”
Minutes after Biden delivered his acceptance speech Thursday, the campaign issued a statement saying “Biden supports raising taxes by $4 trillion.”
Trump told Fox Business Network’s “Mornings with Maria” earlier this month that “they want to tax $4 trillion, it’s going to be the biggest tax increase in history by far...It’s just something that won’t work.”
House Republican Leader Kevin McCarthy of California summed up the Democratic convention this way: “The Democrats just spent four days in a convention, and I don’t know one thing that’s on their agenda except they dislike this president and they’re going to raise your taxes.”
Trump’s ad
Four separate independent tax research groups had similar findings about the plan offered by Biden, the Democrats’ presidential nominee.
“New tax increases would be borne almost entirely by very high-income households and would likely slow the pace of economic growth modestly,” said the nonpartisan Committee for a Responsible Federal Budget, which analyzed the four studies.
A Trump ad that began running earlier this month uses a March analysis by the nonpartisan Tax Policy Center of Biden’s plan--but does not tell the whole story.
The ad “exposes Joe Biden as a tool of the radical left for his pledges to raise taxes by trillions of dollars,” a campaign statement said.
The 30-second spot flashes onto the screen the finding “Trillions of New Taxes, Tax Policy Center, 3/3/2020.” That’s true.
But after saying the Biden plan could cost about $4 trillion, the next sentence of the center’s analysis says, “Under his plan, the highest income households would see substantially larger tax increases than households in other income groups, both in terms of dollar amounts and as a share of their income.”
The Biden tax plan
Biden and Harris have both said they would raise the top income tax rate, now 37%, to 39.6% for income above $400,000, the rate levied prior to adoption of the Republican-authored 2017 tax cut package.
Individuals who earn more than $518,000 and joint filers reporting more than $622,050 now are in the 37% bracket. The rate below that is 35%.
Biden would also require people earning more than $400,000 to pay Social Security taxes. Currently, once someone’s income hits $137,700 they no longer pay the tax. People who earn between $137,700 and $400,000 would continue to pay no payroll tax.
Under Biden’s proposals, those in the top 1% of income, who earn more than $837,000, would pay an average of $299,000, or 17%, more of after-tax 2021 income, the Tax Policy Center analysis says.
Across virtually all income groups, there would be some tax increase, but on average it would be less than 1%.
Taxpayers in the middle income brackets, those with income between $52,000 and $93,000, would get an average increase of $260, or 0.4% of after tax income. People earning less than $26,000 would see an average increase of $30, or 0.2%.
Harris has said she wants to repeal the 2017 GOP-authored tax cut, which lowered the top income tax rate to its current level. “Get rid of the whole thing,” she said during her 2019 presidential campaign.
The four analyses estimate that the major Biden campaign proposals would raise $1.6 to $1.9 trillion over 10 years from corporations, $1 to $1.2 trillion from top income earners from income tax, and $800 billion to $1 trillion from expanding the Social Security payroll taxes.
To Trump and his backers, all that means $4 trillion in taxes. “Joe Biden has pledged to hike your taxes by $4 trillion in the largest tax hike in history,” Trump told a rally in Old Forge, Pa., Thursday.
“And they’re going to waste the money on the Green New Deal,” he said, referring to a Democratic climate change plan. “You know what you get out of that? Nothing. Nothing except debt and death.”
This story was originally published August 24, 2020 at 8:00 AM with the headline "Get ready for a GOP convention eager to brand Democrats as hungry for higher taxes."
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