An Updated Analysis of Former Vice President Biden's Tax Proposals

Brief

An Updated Analysis of Former Vice President Biden's Tax Proposals

Abstract

This brief updates estimates of the revenue and distributional effects of former vice president Joe Biden’s 2020 campaign tax proposals. Biden’s spending proposals would also have important distributional and economic effects, but we have not estimated their cost and distributional effects. Our modeling assumptions are based on information released by the Biden campaign and conversations with campaign staff; we detail these assumptions in appendix B. We analyze Biden’s proposals as of September 28, 2020.

Biden would increase income and payroll taxes on high-income individuals and raise income taxes on corporations. He would expand tax credits for middle- and lower-income individuals and for new investments in domestic manufacturing. On net, his proposals would increase federal revenues by $2.4 trillion over the next decade. Under his plan, the highest-income households would see substantial tax increases; tax burdens would fall for households in the bottom two income quintiles. In 2022, when Biden’s temporary expansion of the child tax credit would be in effect, tax burdens would also fall for households in the third and fourth income quintiles.

An earlier version of this analysis was released on March 5, 2020 (Mermin et al. 2020). Our revised version incorporates changes Biden’s campaign has made to its plan and incorporates revised economic projections. Our new revenue estimate is significantly lower than the March estimate for a number of reasons: several tax credit provisions the campaign has proposed since our initial analysis, our assumption that implementation of most proposals will be delayed until 2022, changes to previously proposed policies that are intended to hold harmless tax filers with incomes below $400,000, a revised economic forecast, and other technical changes.

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