Republican Group Selectively Edits Biden Tax Remark
By D'Angelo Gore
Posted on August 7, 2020
A Republican group’s TV ad uses an out-of-context video clip of Joe Biden saying if he is elected president, “your taxes are going to be raised, not cut.”
That was Biden’s response to one person at a 2019 campaign rally who said he or she had done “very well” financially as a result of the Republican-crafted tax bill that became law in 2017. Biden, who wants to repeal most of that law’s tax cuts for corporations and those with very high incomes, wasn’t telling everyone in the audience that he would raise their taxes — as the ad could lead viewers to believe.
While it’s true tax analysts estimate that all income groups, on average, would see an increase in their taxes under Biden’s proposal, the increases would be relatively small for all except high-income individuals and households.
The ad’s narrator says “sometimes politicians accidentally tell the truth.” The ad then cuts to the former vice president saying: “Guess what, if you elect me your taxes are going to be raised, not cut.” The ad later replays the video clip a second time.
But when Biden said that at a February campaign rally in South Carolina, he wasn’t talking to all taxpayers.
Here’s how the exchange went: First, he asked the crowd, “by the way, how many of you did really well with that $1.9 trillion tax cut?”
Many in the audience either groaned or laughed, but someone off camera acknowledged that he or she benefited from the Tax Cuts and Jobs Act of 2017.
Biden then said to that person: “Well, you did. Well, that’s good. I’m glad to see you are doing well already. But guess what, if you elect me, your taxes are going to be raised, not cut, if you benefited from that.”
While most people are estimated to have paid less in federal income tax under the TCJA, Biden has frequently noted the fact that those with higher incomes reaped most of the tax law’s benefits. (He even falsely claimed once that “all of” the law’s tax cuts “went to folks at the top and corporations that pay no taxes.”)
His plan, as we’ve written, seeks to raise as much as $4 trillion more in tax revenue over the next decade. And the increase, starting as early as 2021, would overwhelmingly fall on very high-income earners and corporations, according to three different analyses of his plan we reviewed.
Biden’s proposal includes three main changes:
- Imposing a payroll tax on earnings over $400,000
- Restoring a top income tax rate of 39.6% for income above $400,000
- Increasing the top corporate tax rate from 21% to 28%
The America First Action ad claims “even the Tax Policy Center says taxes would increase ‘on all income groups.’” But that is also a partial quote from the nonpartisan think tank’s March 5 report on Biden’s tax plan.
The full sentence from the TPC analysis reads: “In 2021, the proposals would increase taxes on average on all income groups, but the highest-income households would see substantially larger increases, both in dollar amounts and as a share of their incomes.”
“On average, every income group would pay more in taxes,” Howard Gleckman, a senior fellow at the Tax Policy Center, told us in May. “But except for high-income households, their tax increases would be very small.”
According to the TPC’s analysis, taxpayers in the middle-income quintile (those with income between about $52,000 and $93,300) would see an average tax increase of $260, or 0.4% of after-tax income. Taxpayers in the second quintile (those with income between $26,200 and $52,000) would encounter an average increase of $110, or 0.3% of after-tax income. And for taxpayers in the bottom quintile (those with income less than $26,200), they would face an average tax increase of $30, or 0.2% of after-tax income.
Again, that’s on average, meaning some in those income groups may see a higher increase, a lower increase or no increase at all.
The TPC said nearly all of the increased tax burden for individuals in those quintiles would be the result of indirect effects — in this case, reduced wages and investment income for workers — caused by raising corporate income taxes.
In a March 5 post for Forbes, Gleckman said that households making nearly $170,000 or more would bear 93% of the burden of Biden’s proposed tax increase. The top 1% of households — or those with more than $837,000 in income — would pay nearly three-quarters of the cost.
“In sum, Biden’s plan achieves what he promises,” Gleckman wrote. “He’d raise taxes substantially, and nearly all on high-income households. The political question will be whether voters like the idea of a $4 trillion tax hike — even if most of them would pay little or none of it.”
The America First Action ad ends with another out-of-context clip of Biden saying “it could go higher.” The ad doesn’t say what it means by “it.” But in that December CNBC interview, Biden was talking about the top tax rate for capital gains, which are the profits realized from the sale of assets such as stocks or real estate. Capital gains are disproportionately earned by the very wealthy.
Biden said: “We should charge people the same tax for their capital gains as their tax rate is. And I think we should raise the tax rate back to, for example, I take it back to where it was before it was reduced. It could go higher.”
Biden’s plan would restore the top marginal tax rate to 39.6% and increase the top marginal income tax rate on long-term capital gains to 39.6% for taxpayers earning more than $1 million annually.
Net capital gains are currently taxed at a top rate of 20% in most cases. Although, “the tax rate on most net capital gain is no higher than 15% for most individuals,” according to the IRS.
Editor’s Note: Swing State Watch is an occasional series about false and misleading political messages in key states that will help decide the 2020 presidential election.
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