During the last election, Trump attacked the Biden campaign by saying, “He is going to raise your taxes”. The first question that should pop into your mind is, “Is that really the case?”

Biden’s tax scheme seems only to be directly proportional. If you earn $400,000 and above a year, you’d pay higher taxes. If you earn less than $400,000, you pay lower.

From the look of things, Biden’s proposed tax laws only aim to benefit poor and middle-class individuals and families more than wealthy individuals and large corporate organizations.

It All Goes Back to Trump’s Original Tax Law

During the Biden campaign, Joe Biden clearly stated that his tax laws would only affect 1.5% of all american households. He only plans to raise taxes for corporations and wealthy individuals making millions of dollars yearly.

This means that there will be 28% deduction for medical expenses, state and local taxes, mortgage interests, etc.

How Biden’s Proposal will affect US Corporations

Initially, US Corporations had a 40% corporate tax rate. However, in 2017, the TCJA law reduced it from 40% to 21%. When these corporations were paying higher taxes, the national deficit increased because they were piling profits due to overseas taxes instead of reinvesting into the US economy.

In this proposed plan, Biden wants to raise corporate taxes from 21% to 28%. Corporations that earn 100 million dollars or more will have minimum tax at 15%. The taxable amount on high-earner companies is different from the federal taxes they pay. Several large corporations do not pay federal income taxes even though they generate billions in profit.

Examples of these are Amazon and several Fortune 500 companies. These companies have generated over 11 billion dollars in profit as seen in their record books. With this new proposal, Biden will ensure that these big giants do not escape paying federal taxes.

According to the Penn Wharton Budget Model, $1.5 trillion will be generated in tax revenue between 2021-2030.

Benefits of Tax Roll Back for You and Your Family

The proposed tax law will benefit poor and middle-class individuals, so there are several benefits:

Improved healthcare programs

The Affordable Care Act for underprivileged US citizens is one of the main targets of the Biden proposal. Tax credits will increase to aid individuals in getting insurance premiums. The ACA program will also eliminate the 400% income cap for tax credit eligibility.

Student programs

When high-income individuals and corporations pay more tax, the budget increases. This creates more room for the government to provide for people that need it. Biden always expresses the need to reduce education costs.

Even though Biden didn’t grant permission to offset student loan debts, he made it very clear that he will reduce education costs in the US drastically. Furthermore, he assures US citizens that community college will be free for two years under his administration.

 

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