President Joe Biden has repeatedly said he won’t hike taxes on anyone earning less than $400,000, but then this week he promised on X to hike taxes on just about everyone.
Now, to be fair, Biden may not have understood that’s what he’s saying.
Letting the Tax Cuts and Jobs Act expire and “stay expired” would be a massive middle-class tax hike because the Tax Cuts and Jobs Act was a massive middle-class tax cut. Yes, wealthy people also saw their taxes reduced by the TCJA, but the law actually shifted a greater portion of the tax burden onto the wealthy.
The TCJA doubled the child tax credit and the standard deduction while lowering everyone’s tax rates. Letting this law expire would cut the standard deduction in half, cut the child tax credit in half, and increase everyone’s marginal rates. Keep in mind that rich people don’t use the standard deduction, and the child tax credit phases out for the wealthy, and so these tax hikes would really only hit the non-rich.
A family of five earning $90,000 (slightly below the median in Biden’s home state of Delaware) would see its marginal tax rate jump from 12% to 15%, and would see its $6,000 in tax credits fall to $3,000 under the Biden plan.
Biden would thus be hiking their federal income taxes from about $350 a year up to $2,875 a year.
Now, of course, Biden could let TCJA expire and then try to pass a new middle-class tax cut. Or he could work with Congress to extend the portions of TCJA he likes (which presumably includes the larger child tax credit and the rate reductions in the lower brackets). But that’s not what Biden promised to do in his post. He said he wanted the whole TCJA permanently dead.
Why would he say that?
Maybe he doesn’t understand what the TCJA did. Maybe he’s just lying, trying to pretend that the bill only benefited the wealthy and corporations — and thus letting it expire wouldn’t harm regular folks.
Biden regularly misleads about TCJA. During the 2022 State of the Union address, Biden made the same sort of claim.
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At the time, I wrote, “The lowest quintile of income earners in the United States saw a 100% tax cut from the bill. That is literally ‘help[ing] working people.’ Every quintile saw significant tax cuts, as the Tax Foundation showed. So, Biden was simply wrong on his central claim, and the data showing he was wrong was available and long known.”
This is a common theme with Biden: If you listen to him, and you understand taxes, you have to wonder if he’s lying or if he just doesn’t understand taxes.