President-elect Joe Biden’s tax proposals would raise about $2.1 trillion, not $2.4 trillion, over the next 10 years, or about 0.8% of gross domestic product, according to a revised analysis by the Tax Policy Center.
Over the subsequent 10-year period, Biden would raise about $4.3 trillion, down from TPC’s October estimate of $4.7 trillion, the Center states.
“While the dollar amounts for the revised estimates are somewhat smaller, the qualitative conclusion remains the same — Biden’s tax proposals, taken as a whole, would generate a substantial amount of revenue by raising taxes on corporations and high-income individuals,” the Center wrote in a recent blog post.
“Our new revenue estimate is significantly lower than the March estimate for a number of reasons: several tax credit provisions the 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, a revised economic forecast, and other technical changes,” said Gordan Merman, senior research associate.
The change also reflects some adjustments to TPC’s October analysis of Biden’s proposed foreign minimum tax.
As a result of the changes, TPC also revised its distribution tables. Since the revisions affect only corporate income tax receipts, the change in tax burden reflects the indirect effects of these corporate income tax changes on households.
For instance, the expected tax cut for middle-income households is about $60 larger in 2022, rising from $620 to $680.
“At the same time, the changed revenue projection makes the estimated tax burden on households in the top 1 percent of the income distribution (those with incomes over $788,000) about $6,000 smaller in 2022,” the Center said.
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