WASHINGTON _ The top 1% of taxpayers would pay 74% of the cost of former Vice President Joe Biden's tax proposals, which would raise $4 trillion over 10 years, according to a new analysis by the Urban-Brookings Tax Policy Center.
The top 1% _ or households earning more than $837,000 _ would see their average tax burden rise 12 percentage points to 41.7% of income, according to the analysis.
The bottom 80% of earners _ those earning less than $169,500 _ would see their tax rate rise, too, but by 0.5 percentage points or less, mainly indirect effects of raising the corporate tax rate from 21% to 28%.
"Under his plan," the analysis said of Biden's proposals, "the highest-income households would see substantially larger tax increases than households in other income groups, both in dollar amounts and as a share of their incomes."
Biden's proposals would cost only a fraction of the "Medicare for All" proposal that the campaign of Sen. Elizabeth Warren, D-Mass., priced at $20.5 trillion. Sen. Bernie Sanders, I-Vt., also has endorsed "Medicare for All" though he hasn't put out a cost figure. The 2017 tax code overhaul (PL 115-97) was estimated by the Congressional Budget Office to add $1.9 trillion to the deficit over 10 years.
The new analysis was released as Biden took the lead in delegates in the race for the Democratic presidential nomination after a strong Super Tuesday showing. After Warren dropped out of the race Thursday, Biden's chief competitor is now Sanders, who would raise taxes by some $30 trillion over a decade, according to estimates supplied by his campaign, hitting businesses and upper-income households.
Gordon Mermin, a senior research associate at the center and a co-author of the analysis, described Biden's package of measures as "a very progressive proposal" despite its relatively small new tax take compared with Sanders or Warren.
He noted that 45% of the increase on the top 1% is from Biden proposals to change the taxation on capital gains, most notably a plan to increase the top capital gains rate from 20% to 39.6% for those earning $1 million or more a year. Biden would also restore the top individual tax rate of 39.6 percent, which was cut to 37% by the 2017 tax law.
Biden's proposals would raise taxes in amounts equal to 1.5% of the country's gross domestic product. That would put Biden's package in line with the 1.2% of GDP that proposals in President Barack Obama fiscal 2017 budget would have cost, according to the center.
Biden's campaign did not immediately respond to a request for comment.
Under Biden's proposals, businesses would be hit for about half of the new revenues, $2.1 trillion over 10 years, while individual taxpayers would pay the rest, according to the analysis.
The biggest chunk, $1.3 trillion, would come from increasing the corporate tax rate from 21% to 28 percent. The 2017 tax code overhaul cut the corporate tax rate from 35% to 21%. Obama had also proposed a 28% rate.
On the individual side, the most expensive Biden proposal would be to levy Social Security payroll taxes on income greater than $400,000 a year. For the 2019 tax year, payroll taxes were collected on only the first $132,900 of earnings.
Collecting payroll taxes on income above $400,000 would raise $962 billion, according to the analysis. A similar proposal is the core feature of a bill (HR 860) proposed Rep. John B. Larson, D-Conn., a senior House Ways and Means Committee member who is pushing for a full committee markup of the legislation this year. A proposal (S 478) from Sanders would levy payroll taxes on income above $250,000.
Mark Mazur, the center's director, said the analysis was based on proposals made public by the campaign and assumptions the center's researchers made on those proposals. The assumptions were shared with the Biden campaign, he said.
