Biden plans tax increase for Americans making more than $400,000

U.S. President Joe Biden said on Wednesday that he plans a tax hike for Americans who earn over $400,000 annually as his post-stimulus legislative plans take shape.

“Anybody making more than $400,000 will see a small to significant tax increase,” the president told ABC News. “If you make less than $400,000, you won’t see one single penny in additional federal tax.”

Earlier this week, Bloomberg reported that the Biden administration was already working on a framework to increase taxes for those making more than $400,000, as well as large corporations. Officials of the administration told NBC News that the full scope is yet to be finalized. They said that tax increases are necessary to enable Biden to finance future initiatives for the country.

Director of economic policy at the Bipartisan Policy Center, Shai Akabas said the new taxes will be used to improve on infrastructural development and other national priorities. He expects that Biden will stick to his initial proposal during his campaign.

Democrat lawmakers have shown their support for Biden’s move to increase taxes. Sen. Ron Wyden, D-Ore., chairman of the Finance Committee also has plans to present two tax increase proposals next week. One would target multinational corporate taxes, while the other would treat capitol gains like income. The improved tax structure will benefit all taxpayers.

“Rebuilding our economy so it works for all Americans, not just mega-corporations and billionaires, starts with fixing our broken tax code and requiring they pay their fair share,” said Wyden, in a statement.

The Republicans, on the other hand, may not support a tax increase. They argue that the slightest increase in rates could cause businesses to relocate from the U.S. to other countries, a move that could hurt the economy in the long run.

According to an estimate, Biden’s tax proposals could raise more than $2 trillion in revenue over the next 10 years, if all goes as planned.

“Oh, I may not get (Republican support) but I’ll get the Democratic votes for a tax increase,” said Biden. “If we just took the tax rate back to when it was when Bush was president, top rate paid 39.6 percent in federal taxes, that would raise $230 billion. Yet there are complaining because I’m providing a tax credit for child care? For the poor, for the middle class?”

White House press secretary Jen Psaki said the president is committed to his words that no American earning less than $400,000 a year will have a dime added on their taxes. She added that the $400,000 threshold was specific to families and not individuals. This means an individual who earns $200,000 could be affected if they married someone who earned the exact amount or more.

Although a formal package has not been released, Psaki said president Biden’s goal is to ensure that wealthy individuals and corporations pay their fair share.