Joe Biden is a heavy favorite to be the next President, yet the media have barely paid attention to what he will do if he wins. We’ll try to fill that knowledge gap in the coming weeks, and a good place to start is his proposal for tax increases of more than $3 trillion over a decade. Let’s examine the unfine print:
• Individual incomes: Raise the top marginal rate to 39.6%, from 37%. Repeal the $10,000 cap on the deduction for state-and-local taxes, giving a bigger break to places like San Francisco and New York. But limit the tax benefit of itemized deductions to 28% of face value, hitting higher earners.
• Payrolls: Apply a 12.4% Social Security tax, split between workers and their employers, to all income over $400,000, with no cap. The current payroll tax comes off after $137,700 of income, but under Mr. Biden’s plan the levy would be limitless. No more polite fiction of Social Security as an “earned” benefit.
Economists say the payroll tax falls mainly on workers, even though half is purportedly “paid” by employers. All together, including Mr. Biden’s 39.6% rate on income, the federal government’s top marginal tax on labor would be higher than 50%. Factor in state income taxes—California’s 13.3% top rate or New Jersey’s 10.75%—and the marginal rate would hit the 60s.
• Capital gains: For those earning more than $1 million, tax capital gains and dividends as regular income, at the new top rate of 39.6%. That’s almost double the current top rate of 23.8%, including the ObamaCare surtax. Capital gains haven’t been taxed as heavily as Mr. Biden proposes since the bad old 1970s.
Who knows if it’ll stop there. Last year the ranking Democrat on the Senate Finance Committee, Oregon’s Ron Wyden, suggested taxing unrealized gains
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