President Joe Biden has touted his proposed tax hikes for the rich by saying they should start "paying their fair share".
If his proposals become law, according to an analysis by MarketWatch, the commander-in-chief will have to put his money where his policies are by paying more on his own taxes.
The president wants to fund his $ 1.8 trillion American family plan by increasing taxes for affluent households in a number of ways, including raising the top income tax bracket from the current 37 to 39.6%, a return to the top rate before the Trump-era tax cuts.
Biden plans to fund his $ 1.8 trillion American family plan by raising taxes for wealthy households in a number of ways, including raising the top income tax bracket from 37% to 39.6%.
That one move would cost Biden just $ 1,000 to $ 2,000 extra on his federal income tax bill, according to calculations by three accountants who used the president's 2020 tax returns and Treasury Department's tax increase proposal details for their analysis.
If the American Families Plan were to become law, the tax burden would be even tougher for Vice President Kamala Harris and her husband, Second Gentleman Doug Emhoff. The couple would pay an additional $ 30,000 in federal income taxes if the top rate rose to 39.6%, the three estimates say.
The White House did not comment on the estimates until Monday afternoon. The White House released Biden and Vice President Kamala Harris's 2020 tax returns last month.
Your earnings for 2020
These documents show that the Bidens paid $ 157,414 in federal taxes last year. The total includes an income tax liability of $ 142,538 and other taxes, including self-employment tax. The Bidens also received a refund of $ 4,649.
Harris and her husband's 2020 statements showed they had paid $ 621,893 in federal taxes, of which $ 540,095 in income taxes in addition to more than $ 82,000 in other federal taxes. The pair owed the IRS $ 34,489.
The American Families Plan would also tax capital gains at 39.6% for households making more than $ 1 million. But that move wouldn't affect Biden and Harris personally, at least if their 2020 returns are an indication.
For starters, the Bidens' income is falling below the $ 1 million mark, with their 2020 adjusted gross income being $ 607,336. In addition, they did not sell or "realize" any long-term capital gains in the 2020 tax year.
Harris and Emhoff's adjusted gross earnings are $ 1.695 million, but they reported a capital loss of $ 218. If losses exceed profits, the amount up to $ 3,000 can be used to reduce income under IRS rules.
Let the numbers run
When MarketWatch asked the accountants to produce the numbers on how much more Biden and Harris would pay under the plan they are pushing for as officials, the results varied slightly due to different calculation methods.
Andrew Schmidt, associate professor of accounting at North Carolina State University's Poole College of Management, said the Bidens would pay an additional $ 1,931 while Harris and Emhoff would pay an additional $ 31,382.
He focused on income tax liability (line 16) using the 2020 tax brackets. Schmidt swapped the current maximum rate and applied the proposed 39.6% rate to taxable income over $ 509,300 for married couples filing together.
The three estimates are close to the same area and provide a concrete example of the potential cost to some wealthy households under the Biden government's income tax plan.
Similarly, Ed Zollars of Thomas, Zollars & Lynch of Phoenix, Ariz., Noted that the Bidens would also pay an additional $ 1,931, while Harris and Emhoff would pay an additional $ 31,507.
Zollars also started on line 16, but he used the 2021 tax tables, which take inflation into account and will be used to calculate tax bills over the next year. Zollars then introduced the 39.6% rate for taxable income over $ 509,300.
Robert Seltzer of Seltzer Business Management in Los Angeles, Calif., Said the Bidens would pay an additional $ 1,091 in income taxes, while Harris and Emhoff would pay $ 29,127.
Seltzer started the taxable income on line 15 and deducted $ 509,300. He multiplied the result by 2.6%, which corresponds to an interest rate hike from 37% to 39.6%.
Still, the three estimates hover around the same area and provide a concrete example of the potential cost to some wealthy households under the Biden Plan.
Even the extra $ 30,000 for Harris and her husband is only 3% of their after-tax income, Schmidt and Zollars said. For the Bidens, the additional tax only accounts for 0.3% to 0.5% of their after-tax income, added Seltzer and Zollars.
Impact on Wealthy Americans
A household making between $ 500,000 and $ 1 million could see an average increase in their federal income tax bill of $ 3,700, or $ 219,880 for those making more than $ 1 million, according to recently published estimates by the Tax Policy Center , record.
Seltzer has clients in the Harris-Emhoff income bracket, and from speaking with them, he said they "don't make a big fuss" about income tax increases. Their concern is the tax treatment of capital gains, he said.
But it all depends on the political leanings of its customers. Democrats could swallow higher interest rates more easily than Republicans. Regarding the former, Seltzer said: "They are considering the alternative of paying Trump instead of paying an additional 2.6%, and they will happily pay it."
Political inclinations play a role: 65% of Democrat-minded respondents said they paid the right amount, compared with 46% of Republican-themed respondents.
The president and vice president could easily endure a tax hike, but research suggests that Republican Americans who voted for Donald Trump in the last election may not have their own higher tax bill as well.
More than half of Americans (55%) said their tax bills were fair, according to a Gallup poll last month: 65% of Democratic-minded respondents said they paid the right amount, compared with 46% of Republican-minded respondents Respondents.
More than two-thirds (69%) of people support the idea of more taxes for wealthy households and businesses, according to a recent poll commissioned by Americans for Tax Fairness, an advocacy group calling for more taxes for the rich.
In addition, 43% of respondents said it was “extremely important” for wealthy households and businesses to “pay their fair share,” according to the survey. Ultra-wealthy Americans are more likely to pay less or no income tax at all.
ProPublica received years of tax returns from some of the super elite – including Tesla
Co-founder Elon Musk and Amazon
Founder Jeff Bezos – and said there were a handful of years when they owed no income taxes.