Joe Biden’s tax plan to raise $3 trillion over next decade: US think-tank

Democratic presidential nominee Joe Biden’s tax plan would raise about $3 trillion over the next 10 years and would amount to $2.65 trillion after accounting for economic effects, said a US think-tank in its report. According to a new analysis from the right-leaning Tax Foundation, the tax collection would be lower than the original estimate, released in April, due to the economic downturn following coronavirus pandemic and new tax credit proposals introduced by the Biden campaign.

Biden campaign has updated the tax plan and repealed the TCJA (the Tax Cuts and Jobs Act) components for high-income filers. It has announced to impose 12.4 per cent Social Security payroll tax for wages above $400,000. It would also increase the corporate income tax to 28 per cent and establish a corporate minimum tax on book income. Biden’s tax plan would reduce GDP by 1.47 per cent over the long term, said the think-tank.

“On a conventional basis, the Biden tax plan by 2030 would lead to about 6.5 percent less after-tax income for the top 1 percent of taxpayers and about a 1.7 percent decline in after-tax income for all taxpayers on average,” the report read.

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Trump's tax return

Trump’s campaign has been targeting Biden’s tax plan, claiming that it would crush the middle class. However, data suggests that the bottom 80 per cent of taxpayers would witness an increase in their income in 2021 under Biden’s policies. The report has been released hours before the first presidential debate between Trump and Biden.

Meanwhile, the US President has been facing backlash over a report by the New York Times which claimed Trump paid no federal income taxes in 10 of the past 15 years, largely because he reported losing much more money than he made. The report further added that Trump paid only $750 in federal taxes the year he was elected and $750 again in his first year in the White House.

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(Image: AP)