BIDEN AND YOUR FUTURE TAX BILL
January 18, 2021 - Douglas Myser
Biden and your future tax bill. It's certainly taken longer than most expected for President elect Joe Biden, but after every major news network has declared him the winner, and now most republicans are also, the questions about tax changes are starting to perculate. Even though Donald Trump has not congratulated him, and probably won't, eventually after the inaugural everything will calm down and business can get back to usual. Biden has not hidden the fact that he intends to raise taxes by nearly $3.5 trillion over the next ten years on corporations and individuals earning more than $400,000 annually. As a result, high earners have a right to be nervous about a Biden presidency. At the same time, Biden has proposed a package of incentives aimed at cutting taxes for lower income taxpayers, including refundable credits for everything from paying childcare costs to buying a home. Thus, for some, news of a Biden victory could mean more money in their pockets come tax time. Biden and your future tax bill.
But will the tax hikes and cuts come to fruition ? Interestingly enough, the answer to that question is the same answer you'll get to any meaningful tax question: it depends. Because while Biden may soon be in command, the fate of his tax proposals rests in the hands of two January elections in Georgia. You see, Democrats currently own a majority in the House of Representatives. The Senate, however, remains unresolved: as of this writing 50 of the 100 seats belong--or will soon belong--to Republicans, with 48 more in the hands of Democrats or Independents who caucus with Democrats. The remaining two seats--both in Georgia--will be decided in January runoffs after none of the candidates for either seat was able to obtain the 50% of votes necessary under Georgi law to claim victory. And those two seats are critical to Biden's ability to implement his tax proposals. If Republicans retain even one of the two seats, it's exteemely unlikely Biden will be able to get any of his proposed changes past the Senate, where bills generally require 60 votes for passage. With only 49 Democratic Senate seats, Biden would need 11 Republicans to cross the aisle and support his plan to raise taxes on the rich, which ain't going to happen.