Would you pay more taxes under Trump or Biden? Here’s what experts predict
President Donald Trump and Democratic challenger Joe Biden have often clashed over taxes, leaving many people wondering whether they would pay more or less depending on who wins the election.
The short answer is this, a new report says: Most Americans, except for the super wealthy, would pay about the same tax rate under Trump or Biden, at least in the short term.
But there are nuances and unknowns, and predictions are complicated by the fact that Trump’s second term agenda released in August lacks specifics about taxes.
Trump has criticized Biden’s tax plans, saying without evidence Biden would raise taxes on all Americans. But Biden’s proposed tax policies, outlined on his campaign website, say he would only raise taxes on Americans making more than $400,000 a year.
“The basic Biden story is if you’re rich or if you’re a corporation, you’re going to pay more tax,” Howard Gleckman, senior fellow at the Tax Policy Center, told MarketWatch. “If you’re middle-income or lower-income, you’ll pay either what you pay now, or you’ll pay less depending on your specific circumstances.”
A report released Tuesday by personal finance website WalletHub looked at likely tax rates for Americans in different income brackets under Trump and Biden. To come up with Trump’s numbers, researchers “relied on the president’s statements and the fiscal proposals contained in his 2021 budget.”
The report predicts voters in these income brackets would pay the existing tax rate under Trump or Biden:
$207,351-$518,000: 35%
$163,301-$207,350: 32%
$85,526-$163,300: 24%
$40,126-$85,525: 22%
$9,876 to $40,125: 12%
$0 to $9,875: 10%
Under Biden’s plan, Americans earning between $400,001 and $518,400 would pay a rate of 39.6%, compared to the current rate of 35%. Those earning more would pay 39.6%, compared to the current 37%.
Trump vs. Biden
Trump’s plan includes unspecified individual tax cuts, “Made in America” tax cuts, expansion of opportunity zones and tax credits for “companies that bring back jobs from China.” But the proposal does not include a detailed plan for extending “the expiring provisions under the 2017 Tax Cuts and Jobs Act,” according to the nonprofit Tax Foundation.
The act, signed into law by Trump, lowered most individual income tax rates, including the top marginal rate, according to the Tax Foundation. But MarketWatch reports that higher-income taxpayers “reap the biggest tax savings.”
The Committee for a Responsible Federal Budget says Trump has “floated additional tax cuts,” including cutting taxes on the middle class. The report found these ideas could add between $1.25 trillion and $2.45 trillion to the nation’s debt.
“A Trump presidency would probably see a decline in personal taxes, especially for high-income earners to prime an economic recovery,” said Bill Kubik, political science professor at Hanover College, according to WalletHub.
The report by the Committee for a Responsible Budget found Biden’s tax plan would raise between $3.65 trillion and $6.60 trillion.
“Supposedly, if a person makes less than $400k/year there will be no tax increase,” said Linda Loubert, interim chairperson and graduate coordinator of the Economics Department at Morgan State University, according to WalletHub. “Biden essentially believes that the Trump tax cut caused harm to the lower-income population by having lower taxes for the rich and then in turn cutting programs that supported the poor.”
This story was originally published October 27, 2020 at 3:09 PM with the headline "Would you pay more taxes under Trump or Biden? Here’s what experts predict."
