(Economic Policy Journal) Joe Biden is surrounded by economists who hate the rich and are in favor of increased taxes.
One Biden advisor that must be singled out is Berkeley professor Gabriel Zucman, an advocate of higher taxes on the rich. He was a key architect of Senator Elizabeth Warren’s proposed tax on high-wealth Americans. He has co-authored a book with the capital-hater Thomas Piketty and is in favor of global tax co-operation.
Below is The Wall Street Journal’s guess at how taxes might increase during a Biden administration if the Senate ends up in control of the Democrats at the same time:
• Individual incomes: Raise the top marginal rate to 39.6%, from 37%. Repeal the $10,000 cap on the deduction for state-and-local taxes, giving a bigger break to places like San Francisco and New York. But limit the tax benefit of itemized deductions to 28% of face value, hitting higher earners.
• Payrolls: Apply a 12.4% Social Security tax, split between workers and their employers, to all income over $400,000, with no cap. The current payroll tax comes off after $137,700 of income, but under Mr. Biden’s plan the levy would be limitless…Factor in state income taxes—California’s 13.3% top rate or New Jersey’s 10.75%—and the marginal rate would hit the 60s.
• Capital gains: For those earning more than $1 million, tax capital gains and dividends as regular income, at the new top rate of 39.6%. That’s almost double the current top rate of 23.8%, including the ObamaCare surtax. Capital gains haven’t been taxed as heavily as Mr. Biden proposes since the bad old 1970s.Who knows if it’ll stop there. Last year the ranking Democrat on the Senate Finance Committee, Oregon’s Ron Wyden, suggested taxing unrealized gains, before the investor sells, using a mark-to-market scheme. The wealthy would pay taxes each year on their paper gains, though there are a host of problems, like how they’d value illiquid assets and if they’d get a refund when the market subsequently fell (don’t count on it).
• Estates: Repeal stepped-up basis at death. This could mean slapping capital-gains taxes on the dearly departed. Or the property received by heirs would arrive with taxable capital gains hidden inside, and no adjustment for inflation. Mr. Biden hasn’t said what he’d do to the estate tax, currently set at 40%, above an individual exemption of about $11.6 million. But his new pal Bernie Sanders wants to lower the exemption to $3.5 million and lift rates up to 77%.
• Corporate incomes: Raise the rate to 28%, from 21%.
And this final comment from The Journal:
[These taxes are] before Mr. Biden has to figure out how to pay for the full spending agenda he is laying out for the left. He claims his tax proposals will soak only the affluent, but they won’t raise nearly enough money to finance all of his plans. In the end everyone will pay.