Biden only wants to raise taxes on the wealthy, but he's misleading families with $400,000-plus income




Biden infrastructure
Biden infrastructure  
  • President Biden has repeatedly said "no one making under $400,000" will see federal tax rates climb.

  • The White House clarified last month that the threshold applies to households, not individuals.

  • Still, about 98% of US households made less than $400,000 in 2020 and wouldn't face a tax hike.

  • See more stories on Insider's business page.

President Joe Biden has repeatedly hinged his massive spending plans on a series of tax hikes with the single rule that "no one making under $400,000 will see their federal taxes go up."

The assertion is true, depending on your definition of "no one."

Biden repeated the claim when unveiling the American Jobs Plan in a Wednesday speech. The $2.3 trillion spending package includes funds for traditional infrastructure projects, affordable housing, clean-energy investments, and public-school renovations. The plan would be paid for with a higher corporate tax rate and a global minimum tax for US corporations operating outside the country, the president said.

"No one, let me say it again, no one making under $400,000 will see their federal taxes go up, period," Biden said.

But there's that "no one" again - it's stretched, to say the least. White House Press Secretary Jen Psaki clarified in a March 17 press briefing that the $400,000 threshold applies to households, not individuals. That means, in instances where both heads of a household make $200,000, their taxes would likely climb under Biden's plan.

Psaki didn't specify a threshold for when individual earners could see their federal taxes climb.

Still, the administration's planned increases would leave the vast majority of Americans paying the same federal tax rate. The median family income in the US climbed to $68,400 in 2020, according to DQYDJ calculations using Census Bureau data. Mean family income rose to $97,973 that year.

Put differently, families earning at least $400,000 sit in the 98th percentile of American households. That means, out of 100 American households, 98 homes earn less than $400,000 a year.

Most Americans appear to be lining up behind the tax increase, as well. A Morning Consult/Politico poll found that 54% of voters support paying for infrastructure improvements with tax hikes on corporations and families earning more than $400,000. Only 27% of respondents supported infrastructure upgrades without tax hikes.

Yes, the Biden administration's explanation of the $400,000 tax-hike level is murky and misleading. But Biden's plans would only affect a sliver of US households while pursuing the most ambitious infrastructure package in decades.

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