Biden Campaign Press Release - Fact Sheet: A Tale of Two Tax Policies: Trump Rewards Wealth, Biden Rewards Work

In 2018, in the wake of the Trump tax giveaway, 91 companies in the Fortune 500 paid no federal taxes on their income and another 56 paid less than 5 percent. These firms could have used their tax windfall to raise wages, purchase new equipment, or invest in research and development. But Trump's tax giveaway had no strings attached: many of these corporations simply passed their higher profits through to investors and executives by repurchasing more than $1 trillion worth of their own stock. Even worse, many of these companies took advantage of Trump's new tax incentives for offshoring and shipped jobs overseas.

Just a few examples of the harmful impact of Trump's corporate tax giveaway include:

• Wells Fargo saved nearly $6.5 billion from the tax giveaway in 2018 and 2019, then authorized $40 billion worth of stock buybacks, raised interest rates on borrowers, and announced that it would lay off up to 26,000 workers.
• The pharmaceutical giant AbbVie received a $1.3 billion tax handout, announced $10 billion worth of buybacks, then increased prices for more than 10 of its products, including the arthritis medication, Humira.
• JPMorgan Chase pocketed $8.76 billion in tax breaks in 2018 and 2019 and yet last year still charged consumers $2 billion in overdraft fees, and cut hundreds of jobs.
• Harley-Davidson announced it would repurchase almost $700 million worth of its own stock, slash 350 manufacturing jobs, and shift some of its production overseas.
• AT&T cut thousands of jobs, while Trump gave them $1 billion in federal contracts and a $3 billion per year tax cut.
• Boeing offshored more than 2,000 U.S. jobs and announced billions in stock buybacks while receiving $29 billion in contracts and a $1.1 billion tax cut from Trump.

To help pay for his permanent tax giveaway to corporations, Trump imposed a secret tax hike on middle-class Americans. Trump and his allies needed to sacrifice something in order to satisfy congressional rules and pass their tax giveaway for large corporations and the wealthy. Their solution was to raise taxes on the middle class by slowing the rate of inflation in the tax code, which will push working families into higher and higher tax brackets over time and devalue the amount of their tax credits. The result is that by 2027, around 70% of middle-class families will have to pay higher taxes.

III. Biden's Plan: Make The Wealthy And Corporations Pay Their Fair Share, And Provide Tax Relief For Working Families

While Trump and his allies have sought to mislead, deceive, and flat-out lie by suggesting Biden will raise taxes on ordinary Americans, fact-checkers have called this desperate line of attack what it is – false.

• According to Politifact, "Donald Trump Jr. claimed in a widespread tweet that former Vice President Joe Biden 'wants to raise taxes on 82% of all Americans.' The eldest son of President Donald Trump was repeating a refrain from the Republican National Convention, where Republican National Committee Chair Ronna McDaniel and Eric Trump made similar claims . . . We rate this statement False."
• USA Today wrote "this claim is FALSE, based on our research. Biden said he will not raise taxes on anyone making less than $400,000 a year. A taxpayer making $75,000, or making $3,000 biweekly, would not move to a higher tax bracket, as claimed. Analysts concluded that Biden's tax plan would apply to wealthy individuals and corporations."
• The nonpartisan Committee for a Responsible Federal Budget stated, "During the 2020 Republican National Convention, several speakers claimed that Democratic nominee and former Vice President Joe Biden would substantially raise middle-class taxes if elected President . . . We find that these statements range from somewhat misleading to largely false."

Joe Biden will not raise taxes on anyone making less than $400,000. Period. But he will ask wealthy Americans and big corporations to pay their fair share, including by:

• Raising the corporate tax rate to 28 percent.
• Requiring a true minimum tax on ALL foreign earnings of United States companies located overseas so that we do our part to put an end to the global race to the bottom that rewards global tax havens. This will be 21% – TWICE the rate of the Trump offshoring tax rate and will apply to all income.
• Imposing a tax penalty on corporations that ship jobs overseas in order to sell products back to America.
• Imposing a 15% minimum tax on book income so that no corporation gets away with paying no taxes.
• Raising the top individual income rate back to 39.6 percent.
• Asking those making more than $1 million to pay the same rate on investment income that they do on their wages.

Joe Biden will provide meaningful tax relief for working families. For years, these Americans have felt the squeeze of stagnating wages and an ever-increasing cost-of-living. Now, Trump's tragic mismanagement of the coronavirus pandemic has produced an almost unprecedented economic crisis. Almost half of all Americans live in a household that has lost employment income since mid-March and 1 in 4 expect to lose income in September. Approximately 47% of renters believe they will likely face eviction over the next two months and more than 1 in 5 homeowners consider foreclosure likely.

Biden is proposing more than a dozen bold policies to bolster financial security and spur economic growth by reducing taxes on the middle class.

Expand the Child Tax Credit to help families through the crisis. Biden understands the urgency of delivering immediate financial assistance to working families. As President, he will support a significant expansion of the Child Tax Credit (CTC) for the duration of the crisis, as proposed in the House-passed HEROES Act. Biden's CTC expansion will provide thousands of dollars of tax relief for middle-class households. It will also help the most-hard pressed working families avoid poverty and attain greater economic security. Specifically, Biden will increase the CTC to $3,000 per child for children ages 6 to 17 and $3,600 for children under 6. He will also make the CTC fully refundable so that hard-pressed families can access these resources quickly. And, he will allow families to receive monthly payments if they choose. Under the Biden plan, for 2021 and then as long as economic conditions require:

• A teacher and an electrician with a 7th grader and a newborn will receive an additional $2,600 – or $6,600 total.
• A nurse and a grocery store clerk with a 2-year-old and a 5-year-old will receive an additional $3,200 – or $7,200 total.
• A firefighter with three teenagers will receive an additional $3,000 – or $9,000 total.
• A letter carrier and a child care worker with children ages three, five, seven, and nine will receive an additional $5,200 – or $13,200 total.

As a long-term strategy to ease the financial burden on working families, Biden is committed to offering specific tax cuts for major costs these families face, including:

• Tax credits that help working families afford health insurance. In addition to his bold policies to protect and expand Obamacare, Biden will ensure that no family spends more than 8.5% of their income on health insurance by expanding access to refundable health premium tax credits.
• Tax credits that help working families afford child care. Biden will offer up to $8,000 in tax credits to help low-income and middle-class families pay for child care as part of his comprehensive plan to create a 21st century caregiving economy. This is a major expansion of the existing tax credit which could mean up to $6,800 in additional tax relief each year for such families.
• Tax credits that help working families pay for the cost of caring for an aging loved one, modeled off of legislation supported by AARP. Biden will also increase the generosity of tax benefits for older Americans who choose to buy long-term care insurance.
• Tax credits to help families buy their first homes and build wealth – up to $15,000. Building off of a temporary tax credit expanded as part of the Recovery Act, Biden's tax credit will be permanent and advanceable, meaning that homebuyers receive the tax credit when they make the purchase instead of waiting to receive the assistance when they file taxes the following year.
• Equalizing the tax benefits of retirement plans. Current tax benefits for retirement savings provide upper-income families with a significant tax break, while providing a limited benefit for low- and middle-income workers. Biden will equalize benefits across the income scale, so working families also receive substantial tax benefits when they put money away for retirement.