Biden’s Misleading Claims about Tax Increases
Joe Biden is misleading the American people when he says there will be no tax increases for anyone making under $400,000 a year. He has said this many times in an attempt to make middle-class and low wage earners more comfortable to vote for him. His statements cannot be further from the truth. In his speech he says he is rasing taxes – but not on anyone that makes less than 400K. Isn’t lowering the Standard Deduction for short form filers the same thing? Of course it is. When your deductions go down your taxes go up.
The Tax Cut and Jobs Act
The Tax Cut and Jobs Act, passed in 2017, brought significant changes to standard deduction amounts for individuals and families. Before the TCJA, the standard deductions were $6,350 for single filers, $9,350 for heads of household, and $12,700 for married couples filing jointly.
However, following the enactment of the TCJA, which applies from 2018 to 2025, these standard deduction amounts saw a dramatic increase. For the 2023 tax year, the standard deductions are $13,850 for single filers or those married filing separately, $27,700 for married couples filing jointly or surviving spouses, and $20,800 for heads of household.
But here’s the catch: when the Trump Tax cuts expire, the standard deduction will drop by $15,000 for a married couple. In other words, every married couple not itemizing deductions after 2025 will be taxed on an additional $15,000 of earnings.
It’s crucial to note that although the TCJA maintained seven income brackets, it lowered tax rates across the board and restructured bracket spans, generally favorably. The tax rate levels decreased for most individuals under the new laws, except for those in the 10% and 35% brackets prior to 2018.
For instance, the top individual tax rate decreased from 39.6% to 37%, affecting single filers earning $578,126 and over. The 33% bracket fell to 32% ($182,101-$231,250), the 28% bracket to 24% ($95,376-$182,100), the 25% bracket to 22% ($44,726-$95,375), and the 15% bracket to 12% ($11,001-$44,725).
Impact to Your Taxes
However, with these bracket adjustments, every American will need to reassess their spending and tax returns, potentially facing a 1% to 4% increase in personal taxes unless certain provisions are extended, revised, or made permanent in the next 28 months.
Contrary to Biden’s assertion that nobody making under $400,000 a year would see a tax increase, his administration has indicated a willingness to allow the tax cuts to expire. This revelation underscores yet another reason why some may choose not to vote for Biden in the upcoming election. I don’t know any American that can afford to pay more in taxes. They have already been crippled by inflation and interest rates. Voting for Biden is voting for more continued reckless spending and increased taxes. I don’t see a path where the Democrats will balance the budget and reduce spending, in fact I see them taxing more and spending more.
As the debate over taxes and economic policies continues, it’s essential for voters to critically evaluate these issues and their potential impact on their financial well-being. Sometimes Americans need to vote with their wallet. A vote for Biden is going to cost you 1-4% more in taxes. Are you willing to pay more?
