Here's how the Biden tax plan would affect each U.S. state
Presidential candidate and former Vice President Joe Biden has said he wants to cut taxes for the middle class.
His plan would raise the corporate tax rate to 28%, impose a true minimum tax of 21% on all foreign income from U.S. companies, impose a tax penalty on companies that relocate jobs overseas, impose a minimum tax of 15% on book income, and increase the highest individual income tax rate is 39.6% (current maximum is 37%), and those who earn more than $ 1 million annually must pay the same tax rate on capital gains as they are on their wages.
Biden's plan would generate tax revenue of over $ 289 billion, according to research by the Institute for Taxes and Economic Policy (ITEP). About 1.9% of the US population would see taxes rise.
The top 5% would bring in most of the tax revenue. (Graphic: David Foster / Yahoo Finance)
The ITEP data has broken down the impact by state. The population has a major impact on the overall tax hike.
Who actually pays
With its massive population of over 39.5 million people and a median income of $ 71,228, it's no surprise that California would see the highest tax increases under Biden's plan.
Biden's campaign website states, "He's not going to ask a single person who makes less than $ 400,000 a year to pay a penny more in taxes."
This is shown by ITEP research.
On average, the bottom 95% in California will see no change in their taxes, although their overall tax burden may increase or decrease, according to ITEP. Those in the top 5% will see a higher bill, with those who make $ 347,200 to $ 948,300 per year paying an average of $ 5,310 more per year. The top 1% would increase the tax burden by an average of $ 279,300.
How the Californians would be affected. (Graphic: ITEP)
Overall, the state would generate tax revenue of $ 54.6 billion.
Other states with significant tax increases on their top 5% are New York, Florida, Texas, Illinois, and New Jersey. All of these states are among the most populous states in the country, according to the US Census Bureau.
"The plan will increase income and wage taxes for people on very high incomes," Steve Wamhoff, director of foreign tax policies at ITEP, told Yahoo Finance. "That will only happen for 1.9% of taxpayers."
The proportion of taxpayers affected by these taxes is, in his opinion, the "most compelling" part of the data.
Democratic presidential candidate Joe Biden speaks during a car campaign in the parking lot of Cellairis Ampitheatre on October 27, 2020 in Atlanta. (Photo by Drew Angerer / Getty Images)
States like New Jersey, Connecticut and California, which have some of the highest taxes in the country, would see more than 3% of their residents affected by these taxes. In states like West Virginia and Arkansas, less than 1% of the population would be affected.
"This is the easiest thing to understand because regardless of a state's population, we know that some states only have a higher percentage of their taxpayers who are high-income people," Wamhoff said.
The taxes would be collected by withholding paychecks and would include an additional tax on Medicare, but only for those earning more than $ 200,000 and married couples earning more than $ 250,000 together.
A portion of that tax revenue would fund his health plan, which builds on the Affordable Care Act (ACA) and creates a public option.
Adriana Belmonte is a reporter and public health editor for Yahoo Finance. You can follow her on Twitter @adrianambells.
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