Joe Biden hasn’t been shy about telling voters he wants to raise taxes on the wealthy. That’s a big part of his overall tax plan. But what, exactly, does he mean by “wealthy”? Biden has repeatedly said he won’t raise taxes on anyone making less than $400,000 per year. That appears to be a nice, clean, easy to understand dividing line between those who’ll pay more taxes and those who won’t. Unfortunately, though, it’s not that simple.
Some Biden tax proposals could increase taxes on Americans who don’t earn $400,000 in a year. For example, the $400,000 threshold generally applies to income taxes and certain payroll taxes. But Biden is calling for changes that would raise other taxes, too. People making less than $400,000 per year could get caught up in those tax increases. Boosting business taxes could also have a trickle-down effect that indirectly raises taxes for workers. So, just because your annual salary is below $400,000 doesn’t mean you’ll automatically escape all tax increases if Biden is elected president.
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Also remember that the president can’t raise or lower taxes on his or her own. Congress has to pass legislation to adjust taxes and then send the bill to the president for a signature. So, even if Biden is elected president, his tax plans will go nowhere unless enough like-minded lawmakers are elected to Congress. If the Republicans hold on to the Senate, don’t expect very many (if any) of his proposals to be enacted into law.
Having said all that, let’s take a look at some of the people who should be the most concerned about tax increases if Biden wins the election. Just remember that this isn’t necessarily an all-inclusive list – other people could also face higher taxes in 2021 and beyond, too. The tax increases for other people might be relatively small, but you’re not completely out of the woods if you’re not on the list.