Democratic presidential candidate Joe Biden’s newest tax proposals include increasing the estate tax, applying Social Security payroll taxes to earnings above $400,000 and replacing deductions (or income exemptions) for retirement contributions with a refundable credit — to name just a few.
The Tax Policy Center released its revised analysis and economic projections Thursday. They are based on the tax plans announced by the Biden campaign since March. On net, Biden’s proposals would increase federal revenue by $2.4 trillion over the next decade, the center-left think tank estimates.
The center says its new revenue estimate “is significantly lower” than its March estimate for a number of reasons.
These factors include “several tax credit provisions the Biden campaign has proposed since our initial analysis, our assumption that implementation of most proposals will be delayed until 2022, changes to previously proposed policies that are intended to hold harmless tax filers with incomes below $400,000, [and] a revised economic forecast as well as other technical changes,” it explained.
The largest Biden tax proposals — reflected in the latest Tax Policy Center analysis but not included in its March report — are to:
- Temporarily expand and make fully refundable the child tax credit.
- Provide credits for new investments in domestic manufacturing.
- Provide a refundable first-time homebuyer’s credit.
- Expand and make refundable the child and dependent care tax credit.
- Provide a refundable low-income renter’s credit.
- Increase the estate tax
- Establish a financial risk fee on liabilities held by large financial institutions.
The estate tax would be restored to the nominal estate, gift and generation-skipping transfer tax parameters in effect in 2009, with the top tax rate at 45%; the exclusion amount would be $3.5 million for estate and generation-skipping transfer taxes, would be $1 million for gift taxes, and would not be indexed for inflation.
Biden’s tax proposals would increase federal revenues relative to current law by about $2.4 trillion between 2021 and 2030, or 0.9% of gross domestic product over that period, the Center projects.