President Biden has made a vow that if he is re-elected, former President Donald Trump’s 2017 tax cuts will be allowed to lapse, resulting in higher taxes for middle class and low-income Americans. During a speech to electrical union members in Washington, Biden criticized the Tax Cuts and Jobs Act (TCJA) for benefiting the wealthy and big corporations while adding to the federal debt. He stated that allowing the tax law to expire would be a priority if he wins a second term.
The Tax Foundation has warned that Americans would face across-the-board income tax hikes if the TCJA is allowed to lapse. The foundation highlighted that the top 1% of earners saw their average federal income tax rate decrease from 26.8% to 25.4%. However, other income groups also experienced tax cuts, with those in the next-highest 4% of earners seeing rates drop from 19.5% to 17.3% and the bottom 50% of filers having their rate lowered from 4% to 3.4%. The foundation’s analysis showed that a wide range of income groups benefited from the tax cuts under the TCJA.
President Biden has repeatedly stated that he would not raise taxes on individuals earning under $400,000 annually. It remains unclear if his intention to allow the tax law to expire is a definitive policy stance or an impromptu remark. The White House and Biden campaign did not immediately provide comment following the president’s speech on the issue. The Tax Foundation has created a calculator tool to help Americans determine their likely tax hike if the TCJA is not renewed by Congress.
The expiration of Trump’s tax cuts would impact a wide range of income earners in the United States, potentially leading to increased taxes for many Americans. Biden’s promise to let the tax law lapse if he is re-elected sets the stage for a key economic issue in the upcoming election rematch between him and Trump. The debate over tax policy and its impact on different income groups is likely to continue to play a significant role in shaping the economic and political landscape in the country. As the deadline for renewing the TCJA approaches, the future of tax rates in the United States remains uncertain.
