High earners in New York and New Jersey could see federal and state tax rates of more than 58 percent under former Vice President Joe Biden’s tax proposals, according to an analysis of the plan.
While Biden would slice taxes for Americans earning under $400,000, those making more than that would face double-digit increases, the Washington, DC,-based Tax Foundation found.
The Empire State could see a 58.2 percent increase, while New Jersey’s would rise to slightly more than 60 percent and California would hit 62 percent, according to an analysis by Jared Walczak of the Tax Foundation.
In the Big Apple, city, state and federal taxes would rise to more than 62 percent.
The Tax Foundation noted that although the US’ statutory tax rate is 37 percent for those in the highest tax brackets, they usually pay 26.8 percent after taking advantage of deductions and loopholes in the tax laws.
The Biden administration, with the help of a Democratic-controlled Congress, could remove the $10,000 cap on state and local deductions, helping to lower the tax rates of the higher earners.
By 2030, the analysis found that Biden’s tax plan would lead to a 6.5 percent less-after-tax income for the top 1 percent of taxpayers and a 1.7 percent decline in after-tax income for all taxpayers.
It also found his proposals would raise federal tax revenue by $3.05 trillion over the next decade but reduce the Gross Domestic Product by 1.47 percent over the long term.
Besides raising taxes on those making above $400,000, Biden would increase the corporate tax rate from 21 to 28 percent and increase a minimum tax for corporations earning profits of $100 million or higher.