Joe Biden’s spending agenda built into his Build Back Better program will raise the average top tax rate for income taxes in the US to the highest level in the industrialized world, so says an analysis by the Tax Foundation.
According to the analysis, the $1.75 trillion bill that is right now in the House will end up increasing the average tax rate on personal income to 57.4%, which would make it the highest among the 38 members of the Organisation for Economic Co-operation and Development (OECD).
The current national average top tax rate is 42.9%. That current rate is actually right in the middle when you compare to other OECD.
Biden’s new rate will make the US even higher than the top three countries in OECD: Japan @ 57.4%, Denmark @ 55.9%, and France @ 55.4%.
Blue states like California @ 64.7%, New Jersey @ 63.2%, and New York @ 66.2% would be even higher than the nationwide average according to analysis.
Biden’s plan will even hurt workers in low-tax states like Texas and Washington by making them face a top rate of 51.4% thanks to the federal increase.
Biden may even try to bring back the loophole for rich friends in progressive states. Here’s their dirty little secret. For decades, rich people in progressive states like New York and California were able to write off their high state taxes from their federal income taxes. Progressive Democrats who run blue states have all kinds of outrageous spending for social programs which require higher tax rates to pay for them. In order to keep rich people in those states with the obnoxious tax rates, the Democrats in DC allowed them to write off their state taxes.
President Donald Trump removed that loophole because he saw that it was unfair that the same Democrats who scream, rant, and rave that rich people have to pay their fair share were getting middle-class taxpayers to subsidize their rich friends’ high state income taxes b.
The Tax Foundation said that other factors will cause the average income tax rate to rise as well.
Under current law right now, the top marginal tax rate on ordinary income is supposed to increase from 37% to 39.6% starting in 2026, the Tax Foundation said.
The marginal tax rate in the US only applies to earnings above a top threshold, and that’s anything over a half million dollars per household.
In their “screw the rich” campaign, the administration will add a 5% surcharge on Modified Adjusted Gross Income above $10 million, and a 3% charge on Modified Adjusted Gross Income above $25 million, according to the analysis. Mark my words, this will make wealthy households invest their money in things that will not grow the economy, like tax-free municipal bonds and other havens that avoid these new confiscatory rates.
On top of that, the new plan will shut down provisions that allow wealthy taxpayers to avoid the 3.8% Medicare surtax on their earnings by strengthening a net investment income tax for people who earn over $400,000 per year.
The Tax Foundation said that these new components to tax laws will make the top marginal tax rate on personal income to 51.4%. And remember, that’s just the federal level. That doesn’t take state and local taxes into account.
More than half of what you earn will go to Joe Biden, Nancy Pelosi, and Chuck Schumer, none of whom never worked a day to earn it.
Biden plan will even hurt low-tax states making them face massive rate hikes.
“As policymakers explore options to raise revenue, they should keep in mind how the US compares to other countries and what the economic effects might be,” the Tax Foundation analysis stated.
“Raising the top marginal tax rate on ordinary income to the highest in the OECD will damage US competitiveness. It will also red…