What's in your wallet?

Seattle WA

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Taxes may soon be going up for the wealthy. President Joe Biden aims to fund expanded education, child care, paid leave and other reforms by collecting more tax revenue from Americans who make more than $400,000 a year. He would do so by raising the top income and capital gains tax rates, changing the taxation of wealthy estates, closing so-called tax loopholes and focusing audits of the rich to prevent tax evasion. All told, the American Families Plan would raise $1.5 trillion over a 10 year period by taxing the highest earners, according to the White House. Biden’s tax plan would raise the top income tax rate to 39.6%. That was the highest rate before the 2017 Tax Cuts and Jobs Act, which lowered it to the current 37%. The 39.6% rate would apply to the top 1% of Americans, according to the White House. Households “I think you should be able to become a billionaire or a millionaire,” Biden told Congress on Wednesday night in a speech outlining his agenda. “But pay your fair share.” The richest 1% of taxpayers, who have an average income of $2.2 million, would shoulder the burden of the tax hike, according to an analysis published by the Institute on Taxation and Economic Policy. Two-thirds of this group would see their taxes increase, by an average $159,000 a year, according to the analysis. Of course, the proposal faces headwinds in Congress. Passage isn’t guaranteed and parts of the plan may change. The returns show that Biden and his wife, Jill, reported $944,737 in taxable income last year and paid $299,346, or a 31% tax rate, in federal income taxes.