March 16, 2020 - Douglas Myser

Joe Biden versus Bernie Sanders on taxes. While the Democratic candidates seem to be pared down really to two viable candidates, the tax stances on these two are widely different, based upon the vision of each for the country and economy. While both have the country's best interests at heart, how they achieve that, and the consequences of their actions, will have major impacts upon the lives of virtually every American. Here are some of the IRS tax issues and differences of the two  remaining candidates. Joe Biden versus Bernie Sanders on taxes.

Sen. Bernie Sanders has proposed a wealth tax, an added levy on millionaires and billionaires, to pay for expanded health care and student debt cancellations. Former Vice President Biden wants to limit how much taxpayers can use deductions to reduce tax liability to raise revenue to address climate change, infrastructure, health care and higher education. These competing proposals come three years after President Trump overhauled the tax code to reduce tax rates for individuals and businesses. One provision lowered the personal income tax rate for top earners to 37% from 39.6% and another provision reduced the corporate income tax rate to 21% from 35%.

On income taxes, Sanders plan would maintain the lower six income tax brackets at their current rates and raise the 35% income bracket to 40%, according to the Tax Foundation. Sanders would add three more brackets, which would apply rates of 45% for households making between $500,000 and $2 million, 50% for households making between $2 million and $10 million. Sanders would also apply a 12.4% payroll tax on wages above $250,000. In addition to the 52% top rate, Sanders proposes a 1% tax on net worth above $32 million, 2% on $50 million and up to 8% on wealth above $10 billion. Biden is proposing to revert the top income tax rate back to 39.6% for earnings above $510,000. Biden would also limit itemized deductions to a reduction of 28% of tax liability. Biden would apply a 12.4% payroll tax on wages above $400,000.

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