Democratic presidential nominee Joe Biden says that if he’s elected in November, he won’t raise taxes for Americans making under $400,000.
Biden told ABC “World News Tonight” host David Muir in an interview aired on Aug. 23 that he believes everybody should pay “their fair share.”
“I will raise taxes for anybody making over $400,000,” Biden said in his joint interview with running mate Sen. Kamala Harris (D-Calif.). “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. The fact is, there are corporations making close to a trillion dollars that pay no tax at all,” the former vice president said. “I’m not punishing anybody. This is about everybody paying their fair share.”
“So, no new taxes $400,000 and down?” Muir asked.
Biden responded by saying that there would be “no new taxes” on Americans earning below that figure.
The Democrat echoed remarks he made in May during an appearance on CNBC, in which he discussed the post-pandemic economic recovery.
“Nobody making under 400,000 bucks would have their taxes raised, period. Bingo. Let’s get people back to work,” Biden said on May 22.
“Let’s raise the capital gains tax for people making over a million bucks a year. Let’s reverse the Trump tax cut,” he said at the time, making reference to if he were to win the upcoming presidential election.
“Imagine if we had that $2 trillion now as we go into, God willing, recovery, which is a long ways away, as I see it right now.”
President Donald Trump has said that he would like to see the capital gains tax slashed to 15 percent, while Biden has called for it to be lifted to a number that would be nearly triple Trump’s proposed tax rate.
Trump told Fox News‘s Maria Bartiromo in a telephone interview on Aug. 14 that, if reelected, he would push to slash the current long-term capital gains tax rate, which, for income in excess of $441,451 from assets held longer than one year, is now taxed at 20 percent.
Biden’s plan calls for taxing long-term capital gains and qualified dividends at the same rate as income tax, so at 39.6 percent on income above $1 million.
Currently, capital gains between $40,001 and $441,450 are already taxed at 15 percent, while those less than $40,000 enjoy a zero percent tax rate, so some argue Trump’s proposal would benefit primarily wealthier Americans and its effect as a stimulus measure during the COVID-19 crisis would be limited.
Trump has insisted that his capital gains tax would create jobs.
“Looking very seriously at a capital gains tax cut and also at an income tax cut for middle-income families,” Trump said this month, adding: “I think it will be very exciting. A capital gains tax is going to be a lot of people put to work.”
Proponents of capital gains tax cuts argue that, for various reasons, the move spurs capital formation and business investment, which, in turn, creates jobs.
Critics argue capital tax cuts are a windfall for the rich, reduce budgetary inflows, may have a neutral impact on capital investment and job creation, and haven’t been shown to spur economic growth significantly.
Biden’s planned policies would increase taxes by $4 trillion over the next 10 years, according to an analysis by the Tax Policy Center.
Tom Ozimek contributed to this report.