Biden’s plan would raise income tax rates to highest in developed world

According to the latest White House proposal, which would drastically hike the rates paid by the wealthy, the United States would have the highest personal income tax rate in the developed world.

President Biden revealed on Monday last week a new tax plan that targets the wealthy and companies.

A new analysis published by the nonpartisan Tax Foundation, President Biden’s budget blueprint contains significant tax hikes on the ultra-wealthy and corporations that would boost the top U.S. rates on both individual and corporate income to the highest level in the industrialized world.

The Biden team’s proposal would raise the average top tax rate on personal income to 57.4%, the highest percentage in the Organization for Economic Cooperation and Development’s 38 member countries.

The president proposed a number of tax hikes, including a “Billionaire Minimum Income Tax,” which would impose a 20% minimum tax on all U.S. households worth more than $100 million, or around 0.01 percent of the population.

More than half of the tax income, according to the White House, will come from the country’s 700 billionaires.

Biden’s budget plan also included a proposal to raise the corporate tax rate from 21% to 28%, as well as a global minimum tax to combat offshore tax-havens. Senator Kyrsten Sinema of Arizona has previously stated that she will not support a corporation tax hike.

Furthermore, when elements of the Republicans’ 2017 tax law expire in 2026, the highest marginal tax rate on ordinary income is set to rise from 37 percent to 39.6 percent. Biden’s budget also assumes passage of his big spending bill, known as the Build Back Better plan.

The plan featured a series of tax increases, including a 5% surcharge on modified adjusted gross income (MAGI) over $10 million and a 3% charge on MAGI over $25 million, for a total rise of 8% – or around a 9.1% tax rate on taxable income, according to the research.

The Build Back Better plan would also reinforce a net investment income tax for everyone earning more than $400,000. This would tighten loopholes in the tax system that allow some wealthy taxpayers to avoid paying the 3.8 percent Medicare surtax on their earnings.