President Biden vowed Friday that former President Donald Trump’s 2017 tax cuts would lapse next year if he’s re-elected and “stay expired” — meaning higher taxes for middle class and low-income Americans — prompting a hasty walk-back by aides.
Biden, 81, lambasted Trump’s Tax Cuts and Jobs Act (TCJA), which permanently lowered corporate taxes from 35% to 21% and temporarily lowered personal income tax rates through 2025, as a giveaway to the rich in a speech to electrical union members in Washington.
“[Trump] was proud, very proud of his $2 trillion tax cut when he was president that overwhelmingly benefited the wealthy and the biggest corporations and exploded, exploded the federal debt,” Biden said of his predecessor ahead of their expected November election rematch.
“There is no exaggeration here: It’s going to expire and if I’m re-elected, it is going to stay expired,” the president added.
Biden’s apparently off-the-cuff remark did not reflect a change in policy, the administration insisted to The Post.
“The president is simply reiterating what’s in his budget. He would let the Trump tax cuts for big corporations and the richest Americans — those making more than $400,000 — expire, and extend the tax cuts for those making less than $400K,” a White House official said.
“In fact, his budget would further cut taxes for the middle class and working families. He has said that repeatedly and in every budget. Trump and Republicans are responsible for the egregious and fiscally reckless cliff that is in the Trump Tax Cuts —they are the reason taxes will raise for the middle class after 2025.”
However, the Tax Foundation says that Americans would be hit by across-the board income tax hikes if the TCJA is allowed to lapse.
“Congress has less than two years to prevent tax hikes on the vast majority of Americans from taking place,” the foundation said in a blog post last month promoting a calculator tool that allows people to determine their own likely tax hike.
If the Trump tax cuts are allowed to expire, the Tax Foundation found, a single person making $30,000 per year would pay $253.75 more in taxes in 2026, while one making $75,000 per year will be billed more than $1,700 more than they paid in 2025.
A married couple with two children making $165,000 annually would pay $2,450.50 more than in the previous year, while a family with three kids pulling in $200,000 per year will shell out almost $7,500 more per year.
The top 1% of earners had their average federal income tax rate lowered from 26.8% to 25.4% under the law, according to the Tax Foundation’s review of IRS records. Democrats have noted that because that cohort earns more than lower-income people, the effect of the cuts was to save them much more money.
But other groups also saw cuts — with those in the next-highest 4% of earners seeing rates drop from 19.5% to 17.3% and those in between the 10% and 5% benchmarks having their rates dip from 14.3% to 13.1%.
Poorer people also had their taxes reduced, with the bottom 50% of filers having their rate lowered from 4% to 3.4%, according to the foundation’s analysis.
The quarter of Americans comprising the income group spanning the top 50% and 75% of earners had their taxes reduced from 8.1% to 6.9%.