The voices of Tax Policy Center's researchers and staff
The Tax Policy Center has revised its analysis of former Vice President Joe Biden’s tax plan. TPC’s new analysis finds Biden’s tax proposals would raise about $2.1 trillion over the 2021-2030 budget period, or about 0.8 percent of Gross Domestic Product—roughly $260 billion less than TPC estimated in October. Over the subsequent 10-year period, Biden would raise about $4.3 trillion, down from TPC’s October estimate of $4.7 trillion.
While the dollar amounts for the revised estimates are somewhat smaller, the qualitative conclusion remains the same—Biden’s tax proposals, taken as a whole, would generate a substantial amount of revenue by raising taxes on corporations and high-income individuals.
The change reflects some adjustments to TPC’s October analysis of Biden’s proposed foreign minimum tax. The October revenue estimate for the country-by-country minimum tax on foreign income of US-based multinational firms did not reflect that this provision would replace the existing tax on global intangible low-tax income (GILTI). Thus, it double-counted some revenue. In addition, while correcting this error, TPC made some technical revisions to reflect how firms would adjust to the new tax law.
As a result of the change, TPC also revised its distribution tables. Since the revisions affect only corporate income tax receipts, the change in tax burden reflects the indirect effects of these corporate income tax changes on households. For example, the expected tax cut for middle-income households is about $60 larger in 2022, rising from $620 to $680. At the same time, the changed revenue projection makes the estimated tax burden on households in the top 1 percent of the income distribution (those with incomes over $788,000) about $6,000 smaller in 2022.
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