Fact check: Nikki Haley wrong about Biden tax plan
Despite a claim from Nikki Haley, independent tax analysts agree that the Biden plan would not directly raise taxes on any household earning below $400,000 a year.
Posted — UpdatedSpeakers on the first night of the Republican convention criticized Democratic nominee Joe Biden on one of the foundational issues of the GOP: taxes.
"They want massive tax hikes on working families," said Nikki Haley, the former Republican governor of South Carolina and ambassador to the United Nations, of the Biden-Kamala Harris ticket.
The Trump campaign pointed to one video clip in which Biden said that the "first thing" he will do in office is repeal the GOP tax cuts. However, that’s not his official campaign proposal.
- Increase the top corporate tax rate to 28% from 21%;
- Raise the top individual federal income tax rate to 39.6%;
- Place a 12.4% Social Security tax on incomes above $400,000;
- Tax capital gains at the same rate as ordinary income for very high earners.
Independent tax analysts side with Biden’s characterization of his plan.
The Committee for a Responsible Federal Budget, a group that’s hawkish on the federal budget deficit, has confirmed that no direct taxes would be imposed on any household making less than $400,000 per year. Households below $400,000 a year could face small income losses indirectly, largely from the portion of higher corporate taxes that companies pass along to their workers through constraints on compensation.
The group concluded that "overall, Biden’s tax plan would make the tax code more progressive, with the vast majority of increased tax burdens and the entirety of direct tax increases falling on high-income households."
The group summarized four independent assessments of how Biden’s tax plan would affect members of the lowest, second-lowest, middle, second-highest, and highest income quintiles. The four analyses were conducted by the American Enterprise Institute, the Tax Foundation, the Urban Institute-Brookings Institution Tax Policy Center, and the University of Pennsylvania’s Wharton School.
By contrast, the top one-fifth of earners would face a significantly bigger hit — a loss of somewhere between 2.3% and 5.7% of after-tax income in 2021. And the top 1% of earners would take the biggest hit of all, between 13% and 17.8% of after-tax income.
PolitiFact ruling
Haley said Biden and Harris "want massive tax hikes on working families."
Independent tax analysts agree that the Biden plan would not directly raise taxes on any household earning below $400,000 a year, and it would pose small hits from the indirect impact of raising the corporate tax rate. The vast majority of the income losses from the Biden tax proposal would fall on the top one-fifth of incomes, and especially on the top 1%.
All in all, the indirect tax hikes on "working families," such as they are, are not "massive." We rate the statement False.
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