Biden suggests raising taxes on corporations and the rich to boost revenues by $4 trillion over the next ten years. What taxes does he suggest raising? Let’s explore his overall tax policy.
Capital Gains
A capital gains tax is a tax on profit made from the sale of stocks, bonds, real estate, precious metals (gold and silver), and other assets.
For anyone making more than $1 million, Biden would tax capital gains as regular income at a top rate of 39.6%.
Corporate Minimum
A corporate minimum tax is a penalty on book income, which is money earned before taxes.
Biden wants a 15% minimum tax on the book income of any company making more than $100 million in profits.
Corporate Income
A corporate tax is when the government applies a levy to a company’s income or capital.
Biden plans to increase this rate to 28%.
Estates
Also known as an inheritance tax, this applies to inherited money or property after someone has passed away.
Biden hasn’t weighed in much here, but some think he’ll copy Senator Bernie Sanders’ (I-VT) idea of raising the estate tax from 40% to 77%.
Foreign Earnings
The Global Tangible Low Tax Income (GILTI) is when companies earn money outside the United States.
Biden wants to double this tax, taking it from 10.5% to 21%.
Individual Incomes
The individual income tax is a levy on somebody’s total earnings from wages during a given period.
He says that the top rate should increase from 37% to 39.6%.
Payrolls
A payroll tax is imposed on employees or employers. It is typically a percentage of the salaries employers pay their workers. A payroll tax is taken from the employee’s pay, or the employer pays it based on the person’s wages.
Biden wants a 12.5% Social Security tax that is split between employees and employers for any income over $400,000 per year.
Taxation in 2020
The United States government is currently facing a fiscal crisis, including a $26 trillion national debt. While President Trump has proposed cutting taxes, Biden thinks the remedy is to raise them. The former vice president is not proposing tax hikes to pay down America’s debt but rather to finance his new spending efforts. Is taxation a hot topic ahead of the presidential election? Not quite when you have the Coronavirus pandemic, riots, and unemployment becoming the biggest issues ahead of the November electoral contest.
