- Nov 8, 2012
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Looks like Joe Biden has released some early proposals of what he would change about the tax system.
Overall leaves a lot of the Trump tax reformation in place with just a few adjustments.
It effectively creates a "Donut" as far as social security where if you make $200k you stop social security payments @ around $140k, but then resume social security if you make over $400k. So I'm sure high earners are going to love having a 12.4% of their income disappear heh. Needless to say, something has to be done to fix our social security issues.
Additional tax credit for childcare is overall good - though I honestly think we should just expand schools to have daycare as well. The costs of daycare are just nuts in general - and if we want more 'Merican babies, you need to give people an incentive to reproduce.
Though overall, this conversation might be worthless because if he keeps up with his public appearances were destined for another 4 years....
Also even if he does get elected might not have the senate/house majority to pass it.
Business tax changes:
- Imposes a 12.4 percent Old-Age, Survivors, and Disability Insurance (Social Security) payroll tax on income earned above $400,000, evenly split between employers and employees. This would create a “donut hole” in the current Social Security payroll tax, where wages between $137,700, the current wage cap, and $400,000 are not taxed.[1]
- Reverts the top individual income tax rate for taxable incomes above $400,000 from 37 percent under current law to the pre-Tax Cuts and Jobs Act level of 39.6 percent.
- Taxes long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6 percent on income above $1 million and eliminates step-up in basis for capital gains taxation.[2]
- Caps the tax benefit of itemized deductions to 28 percent of value, which means that taxpayers in the brackets with tax rates higher than 28 percent will face limited itemized deductions.
- Restores the Pease limitation on itemized deductions for taxable incomes above $400,000.
- Phases out the qualified business income deduction (Section 199A) for filers with taxable income above $400,000.
- Expands the Earned Income Tax Credit (EITC) for childless workers aged 65+; provides renewable-energy-related tax credits to individuals.
Other Changes Include:
- Increases the corporate income tax rate from 21 percent to 28 percent.[3]
- Creates a minimum tax on corporations with book profits of $100 million or higher. The minimum tax is structured as an alternative minimum tax—corporations will pay the greater of their regular corporate income tax or the 15 percent minimum tax while still allowing for net operating loss (NOL) and foreign tax credits.[4]
- Doubles the tax rate on Global Intangible Low Tax Income (GILTI) earned by foreign subsidiaries of US firms from 10.5 percent to 21 percent.
- Establishes a Manufacturing Communities Tax Credit to reduce the tax liability of businesses that experience workforce layoffs or a major government institution closure; expands the New Markets Tax Credit and makes it permanent; offers tax credits to small business for adopting workplace retirement savings plans; expands several renewable-energy-related tax credits and deductions and ends subsidies for fossil fuels.
An $8,000 tax credit for childcare; equalizing the tax benefits of defined contribution retirement plans; eliminating real estate industry tax loopholes; expanding the Affordable Care Act’s premium tax credit; sanctions on tax havens and outsourcing, among other proposals[5] which are not included in our analysis due to the lack of detailed information.
Economic Effect
According to the Tax Foundation General Equilibrium Model, Biden’s tax plan would reduce the economy’s size by 1.51 percent in the long run. The plan would shrink the capital stock by 3.23 percent and reduce the overall wage rate by 0.98 percent, leading to 585,000 fewer full-time equivalent jobs.
Overall leaves a lot of the Trump tax reformation in place with just a few adjustments.
It effectively creates a "Donut" as far as social security where if you make $200k you stop social security payments @ around $140k, but then resume social security if you make over $400k. So I'm sure high earners are going to love having a 12.4% of their income disappear heh. Needless to say, something has to be done to fix our social security issues.
Additional tax credit for childcare is overall good - though I honestly think we should just expand schools to have daycare as well. The costs of daycare are just nuts in general - and if we want more 'Merican babies, you need to give people an incentive to reproduce.
President Biden’s Campaign Tax Plan
Biden’s tax plan is estimated to raise about $3.33 trillion over the next decade on a conventional basis, and $2.78 trillion after accounting for the reduction in the size of the U.S. economy. While taxpayers in the bottom four quintiles would see an increase in after-tax incomes in 2021...
taxfoundation.org
Though overall, this conversation might be worthless because if he keeps up with his public appearances were destined for another 4 years....
Also even if he does get elected might not have the senate/house majority to pass it.