President Biden to Raise His Own Taxes: Here's How He'll Do It

• Author: Jacob Greene
• Posted: 2024-06-04

One of the many platforms that President Joe Biden ran on during the 2020 election was the promise to make millionaires and billionaires finally pay their fair share. Although this was already a popular idea, the vast wealth that CEOs and other wealthy individuals collected during the pandemic only increase the popularity. That is why other than the vaccine roll-out and infrastructure plan, increasing taxes on the rich has been one of the president's main priorities. However, the question begs, who is going to be a part of those tax increases, and how is this going to become a reality in the upcoming months.

President Biden to Increase His Own Taxes

As the negative effects of the pandemic continue to hover over the average American family, many are still understandably concern about the potential of a tax increase. However, during the 2020 Election, President Biden continually told Americans that he would only raise taxes on those making $400,000 and above. This means that he, as the president who earns over $400,000, will be a part of those tax hikes. In fact, he and his wife, Dr. Jill Biden, will end up paying this year $35,000 more than last year.

Additional Tax Hikes

Although the wealthy will be asked to pay their fair share, the reality is that it's not going to be enough to cover some of the more expensive projects that the President wants to focus on, such as the infrastructure plan as well as the initiative to push for green technology. That is why the president is also looking to increase taxes within other areas of the economy, such as the corporate tax rate that will see an increase from 21% to 28%. top individual earners will also see their taxes increase from 37% to 39.6%. In addition, the capital gains tax will also double under President Biden for those making more than $1 million per year. The Biden's who earned $944,737 last year will be fall under many of those tax hikes. However, that is not where their increase in taxes will end. As a married couple that are also top-earners and who usually file jointly, their tax rate will also increase from 37% to 39.6%. However, it must be noted that the increase does not begin at the 400K mark but rather at $640,500.

Another possible increase in taxes includes those involving social security. During the 20202 elections, then-candidate Joe Biden promised that he would add the 12.4% Social Security tax onto higher-income earners who usually earn at least 400K. However, President Biden has yet to add this to his recent tax proposals. Still, since it is very popular amongst Democrats in congress, it may end up being added during the legislation.

The Tax Bill Keeps Climbing

If the tax proposals above pass Congress, the Bidens tax bill will continue to climb. However, to understand how much they are going to pay plus where those funds are going to be taken out, it is important to dive into Biden's taxable income from 2019. In 2019, the Bidens earned $517,334 in normal income and ended up paying the social security tax up to its cap. That means that they still had $117,334 above 400K in wages left. Financial adviser Matthew Costigan of HBKS Wealth Advisers in Pittsburgh stated that the president would only raise his taxes by a little bit. However, Costigan does have a few concerns regarding the issue with deductions. He questions if the standard deduction or if he would also repeal the limit on state and local deductions. Costigan comments that those changes would also change the tax laws being proposed dramatically.

How Much Would the Biden Tax Increases Raise?

According to the White House, President Biden's proposed tax increase on various areas of the economy will help to contribute to other projects that Biden wants to take care of during his term. The amount predicted to bring in is $1.5 trillion over the next decade. One of the largest actions taken place to ensure that does happen is the increase in funding to the IRS that the President mentioned during his speech to Congress. This increase in funding will help to hire more agents and thus process more audits to ensure that wealthy individuals are paying their fair share.