Biden's tax-the-rich agenda faces Senate roadblock if GOP holds majority
What will be the impact of Biden’s economic agenda?
Fox News contributor Brian Brenberg provides analysis about how a Biden tax hike could affect the ongoing exodus of Americans from high-tax states.
President-elect Joe Biden campaigned on a pledge to levy new taxes on wealthy Americans — but that agenda may be stonewalled in the Senate if Republicans maintain their majority control.
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Experts have said that Biden's ability to impose new taxes on individuals earning more than $400,000 may be severely limited if the GOP retains control of the Senate, a battle that likely hinges on two runoff races in Georgia.
Republicans hold a slim 53-47 Senate majority, but after Tuesday's election, the parties are tied 48 to 48.
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GOP candidates are expected to win in yet-to-be-called races in North Carolina and Alaska, putting them at 50 seats, meaning Democrat would need to win both runoffs in Georgia to secure a 50-50 tie. In that scenario, Vice President-elect Kamala Harris could cast a tie-breaking vote to move the Democratic agenda forward.
Still, that would require the Biden administration to need every Democrat across the ideological spectrum to vote to raise any taxes.
“One thing to remember in presidential tax plans, the president doesn’t write the tax code, Congress writes the tax code," said John Gimigliano, head of tax legislative services at KPMG. "So, we can take Biden’s tax plan as important directionally but not necessarily as gospel. While we may have a tax plan from President-elect Biden, without a Democratic sweep in Congress, much of his proposed agenda will be moot.”
BIDEN PLEDGES TO HIKE TAXES ON AMERICANS EARNING MORE THAN $400K
The former vice president has unveiled a multitrillion-dollar agenda that would be funded in large part by higher taxes on wealthy U.S. households – which he describes as anyone earning more than $400,000 annually – and corporations. That includes higher income tax rates, an expansion of the payroll tax for Social Security, new tax credits and fewer deductions.
“I will raise taxes for anybody making over $400,000,” Biden said earlier this year during an interview with ABC's David Muir. “Let me tell you why I'm going to do it. It’s about time they start paying a fair share of the economic responsibility we have. The very wealthy should pay a fair share – corporations should pay a fair share.”
Almost 80% of the tax increases backed by Biden would land on the top 1% of earners in the U.S., according to a projection this week from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School.
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Biden has repeatedly said he would roll back President Trump's 2017 Tax Cuts and Jobs Act and raise the corporate tax rate to 28% from 21%, restore the top individual tax rate to 39.6% from 37%, tax capital gains as ordinary income, cap deductions for high earners, expand the Earned Income Tax Credit for workers over the age of 65 and impose the Social Security payroll tax on wages above $400,000.
But under a divided Congress, those tax increases are likely off the table.
"The broader aspects of the Biden tax plan, especially rate increase, seem less likely in this scenario," Gimigliano said.
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