Biden's Plan Will Not Raise Taxes For Most Americans
The Claim
President Biden’s tax plan could increase taxes for Americans making over $200,000 a year.
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Emerging story
Joe Biden released his tax plan during his campaign for the 2020 Presidential election. On March 16, 2021, President Biden reiterated, saying that he planned a “small to significant” tax increase for those making over $400,000. The following day, Press Secretary, Jen Psaki was asked in a press conference to clarify this statement. “It depends on how much money you make. Are you a billionaire? Then you may pay more in taxes than someone making, a family making $425,” she said. “There’s going to be a range in any tax proposal.” When asked whether the president meant taxing individuals or families, she replied, “Families.”
Fox News covered Psaki’s clarification with a headline that read, “Biden's proposed tax hike could hit Americans earning $200,000.” The New York Post shared the story with a similar headline: “Biden tax hike could hit people earning $200K, White House clarifies.” Many social media users circulating these posts expressed concern that Biden was lowering the income threshold of those who would be taxed. Some saw this as proof that the president lied, or mislead American citizens.
Misbar’s Analysis
Misbar’s investigation found Fox News and The Post’s headlines to be selective in highlighting the distinction between individuals and families. Fox’s article explains, “The hike could hit individuals who earn $200,000 a year if they are married to someone who makes the same amount.” This means that only married couples will be affected if they file jointly, and if their combined income is higher than $400,000.
To fully examine the impact of these claims, Misbar explored US household income statistics provided by the US Census Bureau and the third party statistic aggregate site Statista. In the US, only 10% of households make over $200,000 a year, and even less than 10% of the entire US population has a household income of over $400,000. In fact, 44% of the US households make between $35,000 and $150,000 and 25% make less than $35,000 a year. This tax increase will impact fewer than 10% of all US households.
Even with Psaki’s clarification that families making $400,000 a year will see their taxes raised, it will only be raised from 37% to 39.6%.
The official proposal is still in its early days, therefore it is possible that Biden’s tax plan could impact those with lower incomes than $400,000. Nevertheless, Biden’s original campaign tax plans stated, “He won’t ask a single person making under $400,000 per year to pay a penny more in taxes.” Even with Psaki's comments, this proposal does not appear to have changed.
