Former Vice President Joe Biden wants to spend a lot of money if he wins the 2020 election. Based on some of his proposals concerning infrastructure, climate change, and health care, Biden plans to spend trillions of dollars in his first term. How will he pay for it? Biden is proposing to raise taxes on corporations and the rich to boost federal revenues by $4 trillion over the next ten years. What taxes does he suggest raising? Let’s explore his overall tax policy.
Under Biden’s plan for individuals earning more than $1 million, capital gains and dividends would be taxed as regular income at a new top rate of 39.6%.
A corporate minimum tax is a penalty on book income, which is money earned before taxes.
According to the campaign late last year, Biden would slap a 15% minimum tax on book income of businesses earning more than $100 million in profits. He estimates that it would impact approximately 300 companies.
A corporate tax is when the government applies a levy to a company’s income or capital.
President Donald Trump slashed the U.S. corporate tax rate from 35% to 21% as part of the 2017 Tax Cuts and Jobs Act. While Biden does not want to return to the pre-2017 level, he does suggest increasing the rate to 28%
Also known as an inheritance tax, this public policy consists of a person paying a tax after inheriting money or property when someone has passed away.
Biden has not been clear on this issue, but The Wall Street Journal”s Editorial Board warns that the campaign could copy Senator Bernie Sanders’ (I-VT) idea of raising the estate tax to 77%, up from 40% today.
The Global Tangible Low Tax Income (GILTI) is when companies earn money outside the United States through foreign subsidiaries.
The former vice president has proposed doubling GILTI, from 10.5% to 21%. He argues that raising taxes on foreign income, in addition to GILTI, would raise more than $309 billion for the government.
The individual income tax is a levy on somebody’s total earnings from wages during a given period.
The ex-senator from Delaware refrains from targeting low- and middle-income Americans in this area, concentrating mostly on high-income earners. Biden proposes raising the top marginal rate from 37% to 39.6%, as well as repealing a $10,000 cap on the deduction of state-and-local taxes.
A payroll tax is a penalty imposed on employees or employers. It is typically calculated as a percentage of salaries employers pay their workers. A payroll tax is deducted from the employee’s wages, or the employer pays it based on the person’s wages.
The presumptive Democratic nominee wants to institute a 12.5% Social Security levy that is split between employees and employers to all income more than $400,000 per year without a limit. This is in stark contrast to President Trump’s suspending the payroll tax through an executive order.
Taxation in 2020
The United States government is currently facing a fiscal crisis, enduring a $4 trillion budget deficit and a $26 trillion national debt. While President Trump has proposed cutting taxes, Biden thinks the remedy is to raise them. The former vice president is not proposing tax hikes to pay down America’s debt but rather to finance his new spending efforts. Is taxation a hot topic ahead of the presidential election? Not quite when you have the Coronavirus pandemic, riots, and unemployment becoming the biggest issues ahead of the November electoral contest.