With his “Build Back Better” initiative, Biden promises to take care of the middle-class Americans’ well-being — so the country in its entirety can prosper.
In 2017, Donald Trump had claimed his tax plan would focus on “helping the folks who work in the mailrooms and the machine shops of America”. The tax cuts were pitched as “rocket fuel” for the economy that will create more jobs and increase wages. Neither happened. While tax breaks helped the wealthiest Americans get richer under Trump, 60% of the tax savings went to Americans making the top 20% of incomes.
In 2018, Trump’s tax cuts were pitched as “rocket fuel” for the economy that will create more jobs and increase wages. Neither happened.
In his first term as President, Trump twisted rules to give away hundreds of billions of dollars to enrich wealthy donors, members of Congress, politicians, and, of course, himself — at the expense of middle-class families. Though Trump promises to “cut taxes” if elected again, he doesn’t explain his plan or who would be helped by those “cuts”. No wonder white voters in the middle class, which presently account for 46% of the electorate, are slipping from Trump’s grip.
Though Trump promises to “cut taxes” if elected again, he doesn’t explain his plan or who would be helped by those “cuts”.
On the other hand, here is Joe Biden, former U.S. vice president and the 2020 democratic presidential candidate, who has an ambitious plan ready to help America’s middle class — from addressing income inequity to rebuilding the country’s infrastructure, from cancelling billions in student loan debt to creating millions of jobs…
Tax Wealthy Americans
In order to stop the wealthiest Americans disproportionately benefiting from loopholes in the system and help middle-class Americans earn more, Biden as President will raise the top corporate income tax rate to 28% from 21%; apply Social Security taxes to earnings above $400,000 a year; tax earnings from investments (such as real estate and stock over $1 million) at the same rate as regular income; and levy 15% minimum tax on corporations making over $100 million a year.
“Donald Trump doesn’t know what it means to be part of the middle class. I do.”Joe Biden
Biden says his tax hikes will affect only the wealthy – those who make more than $400,000 a year (which is nearly six times the median income in the U.S.); the top 1.8% of taxpayers who earn about 25% of the country’s income. Morris Pearl writes in his support: “As a wealthy individual and a former managing director at BlackRock, I would argue the former Vice President’s open endorsement of a once-taboo subject is not just a welcome change from four years of fictional trickle-down economics under President Trump. It’s also an acknowledgment that decades of politicians prioritizing the needs of the rich and powerful has left America with a growing inequality crisis that limits our ability to respond to emergencies like the COVID-19 pandemic.
Biden’s tax hikes will affect only those who make more than $400,000 a year i.e. the top 1.8% of taxpayers who earn about 25% of America’s income.
“Biden’s tax plan maps out an equitable future for America, one that shifts the tax burden from the middle and working class up to the top 1% and ensures that my wealthy peers stop getting away with robbing the country blind. There’s some room for improvement, but if implemented, a Biden tax code could be one of the most progressive tax codes this country has ever had.”
While Biden says no taxpayer making less than $400,000 a year (the 98.2% of working Americans) will see a tax increase under his presidency, some fear a portion of increased corporate tax rate of 28% will be borne by middle-class taxpayers as the burden will be passed on. A Tax Policy Center analysis, however, finds the impact of the corporate tax increase will be more than offset by tax credits and deductions aimed at middle and lower-income earners. According to the Tax Policy Center: “Biden’s tax plan would give an average tax cut of $620 to middle-income earners, while top earners would face a steep increase. For those in the bottom quintile, which include people making less than $25,000, tax cuts would average $750 in 2022. Those in the next quintile, making between $25,000 and $50,000, would see a tax cut of $790. Those in the middle, earning between $50,000 and $89,000, would see a tax cut of $620, while those making between $89,000 and $160,000 would see a cut of $420.”
Watch: Joe Biden on the Important of the Middle Class
Forgive Student Loans
Further, Biden, as President, will forgive $10,000 in student debt for all borrowers, and absolve all undergraduate federal student loan debt for low-income and middle-class individuals (earning less than $125,000 a year). Outstanding student debt has spilled over $1.6 trillion. Biden’s forgiveness plan would end about a third of the country’s outstanding student loan debt, according to a calculation by Mark Kantrowitz, a higher education expert. More than two-thirds of American college graduates have student debt today, with the average balance crossing $32,000. Education Department data shows roughly 15 million borrowers would have their entire balances forgiven if Biden gets successful in cancelling the $10,000 student debt.
Bridge The Wealth Gap
In 2018, middle-class Americans made an average of $50,000 a year. If that income had grown at the same rate as the economy since 1975, middle-class Americans should have been making $92,000 a year today. On the other hand, the top 1% of American earners made $1.3 million in 2018. If the richest Americans had their income tied to the same economic growth, they should have been making $630,000 — not $1.3 million. Today, the American middle-class is earning less than half of the income in the country — despite making up more than half of the economy (over 51% of American adults live in middle-class households).
“This country wasn’t built by Wall Street bankers and CEOs and hedge fund managers. It was built by the American middle class.”Joe Biden
A report by the Institute for Policy Studies and Americans for Tax Fairness has found that the wealth of 643 richest American billionaires rose from $2.95 trillion to $3.8 trillion between March 18 and September 15 — even as the pandemic wreaked havoc on the jobs market and disproportionately affected middle-class Americans.
At the peak of the pandemic, the wealth of 643 richest American billionaires rose from $2.95 trillion to $3.8 trillion.
The stagnant growth in median incomes (middle-class incomes have shrunk 8.5% since 2000), dramatic increase in wealth inequality (62% of jobs across the U.S. don’t support a middle-class or better lifestyle), low employment rate (7.8 million Americans hold more than one job, and half of adults who lost a job due to the coronavirus outbreak are still unemployed), and rising debt (an average American has $90,460 in debt) has left millions of Americans struggling. How does Biden propose to change it all?
Rebuild The Middle Class
To offset the toll the coronavirus pandemic — which brought on unprecedented recession and historic unemployment — has taken on middle-class Americans, Biden plans to increase the federal minimum wage to $15 an hour; create over 10 million jobs that would make $25 an hour; and get unemployment to under 6%. Biden promises: “As president of United States, I’m going to do away with the tax break that the President [Trump] gave people who send jobs abroad, to make sure that if you in fact, have a contract, if you get taxpayer’s money, you must use American products, you must buy American products, and you must not be in a position where you’re exporting.
To offset the Covid-19 toll, Biden plans to increase minimum wage to $15 an hour, create over 10 million jobs, and get unemployment to under 6%.
“No one should have to work two jobs to get out of poverty. With newly empowered labor unions. With equal pay for women. With rising wages, you can raise a family on. Yes, we’re going to do more than praise our essential workers. We’re finally going to pay them. This is an enormous opportunity. We can create over 10 million jobs that are making $25 an hour. I don’t know how long it will take [but] we can and we will get it [unemployment] under 6%.”
Watch: Biden Explains his Build Back Better plan
With his “Build Back Better” initiative (which includes spending $2 trillion over four years on clean energy and sustainable infrastructure; $700 billion over four years to boost American manufacturing and technological innovation; and $775 billion over 10 years on programs for child and elderly care) coupled with a $850-billion preschool and K-12 education plan and the $1.5 trillion healthcare plan, Biden’s plan promises to take care of the middle-class American’s well-being — so the country in its entirety can prosper.
“Our trade policy has to start at home, by strengthening our greatest asset—our middle class—and making sure that everyone can share in the success of the country, no matter one’s race, gender, zip code, religion, sexual orientation, or disability. That will require enormous investments in our infrastructure—broadband, highways, rail, the energy grid, smart cities—and in education. “We must give every student the skills necessary to obtain a good twenty-first-century job; make sure every single American has access to quality, affordable health care; raise the minimum wage to $15 an hour; and lead the clean economy revolution to create ten million good new jobs—including union jobs—in the United States.”