President Joe Biden’s proposed top individual income tax rate of 39.6 percent would hit income above around $452,700 a year for individuals, according to a White House official.
For married couples, the 39.6 percent rate would start at $509,300 in income, and could hit some individuals who make less than the $400,000 Biden has repeatedly cited for triggering a tax hike.
The official said those thresholds were based on the tax brackets from before the 2017 GOP tax law, which cut the top individual rate from 39.6 percent to 37 percent. The new brackets would be for the 2022 tax year.
The income tax boost on high earners would help fund Biden's plan to invest $1.8 trillion in social welfare and family assistance programs. The thresholds were first reported by Axios.
Why it matters: Biden repeatedly has said that he wouldn’t raise taxes on anyone making less than $400,000 a year, though the White House sometimes has caused confusion over whether that vow applied to individuals or married couples.
The White House official noted the top bracket would apply to less than 1 percent of taxpayers, and said the proposal was in line with the president’s $400,000 vow.
“If you are an American individual or family earning less than $400,000, you will not see a dollar increase in your taxes. And in fact, for the top bracket, it’s actually a little higher than that,” the official said.
Still, the proposal would also mean that some higher-income couples where at least one member doesn’t make $400,000 a year would face a higher top tax rate — like a couple where both people made $275,000 a year.
Biden’s new proposed top tax bracket would also start at a lower income level than the current threshold. For 2021, the top 37 percent bracket starts at $523,600 for individuals and $628,300 for married couples.
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