What You Need to Know
- The new top 39.6% tax bracket, proposed in the American Families Plan, would encompass less than 1% of taxpayers, says a White House official.
- The proposal still faces months of negotiations in Congress, where Democrats hold a razor-thin majority.
- A marriage penalty still exists for top earners: those earing between roughly $628,300 and $1 million will likely pay more in taxes as a couple.
President Joe Biden’s proposed income tax increases for the wealthy would hit individuals earning more than $452,700 in 2022 and married couples making at least $509,300, according to a White House official.
The new top 39.6% tax bracket, proposed in Biden’s American Families Plan on Wednesday, would encompass less than 1% of taxpayers, the official said, asking not to be named to speak in more detail beyond the White House’s outline.
The official’s comment suggested that the new rate, up from the current 37%, would be applied from 2022.
“People file as married couples, they file as individuals, and his promise to the American people is that people who are in the 99% of people who are making less than that are not going to have their taxes go up,” White House Press Secretary Jen Psaki said on CNN on Thursday.
The official’s comments are the most detailed yet on Biden’s income-tax proposal, after the administration for weeks said that no one making under $400,000 would see their taxes rise.
The proposal still faces months of negotiations in Congress, where Democrats hold a razor-thin majority.
Axios previously reported the income thresholds for the top tax rate.
The details mean the tipping point for an individual is even higher than the $400,000 previously laid out.