Comparing Current Law with Biden's Tax Proposals

This calculator is designed to provide a comparison between the current federal income tax system (based on 2024 law) and what your tax liability might have looked like under some of the key tax policy proposals made by President Joe Biden during his campaign and early presidency. It is an illustrative tool to show how these specific proposed changes could affect different income levels.

Key Tax Proposals Modeled in this Calculator

This calculator focuses on several major proposed changes:

• Increased Top Marginal Rate: The proposal to restore the top individual income tax rate to 39.6% from 37% for income above $400,000 for single filers and $450,000 for married couples.
• Higher Capital Gains Tax for High Earners: The plan to tax long-term capital gains and qualified dividends at ordinary income tax rates for households with income over $1 million.
• Expanded Child Tax Credit: Modeling the temporary expansion from the American Rescue Plan, which increased the credit to $3,000 per child ($3,600 for children under 6) and made it fully refundable.
• Changes to Social Security Tax: The proposal to apply the Social Security payroll tax to earnings above $400,000, creating a "donut hole" between the existing wage base limit and this new threshold.

For in-depth analysis of these and other proposals, organizations like the Tax Policy Center and the Tax Foundation provide detailed reports.

Frequently Asked Questions (FAQ)

Are these proposals current law?

No. The proposals modeled in this calculator, such as the expanded Child Tax Credit and changes to the top tax rates, were not passed into permanent law and are not in effect for the 2024 tax year. This tool is for comparison and informational purposes only and should not be used for tax filing.

Who would have been most affected by these proposals?

The proposed changes were largely targeted at two groups. High-income households, particularly those with income over $400,000 and those with significant capital gains over $1 million, would have seen a tax increase. Conversely, low- and middle-income families with children would have seen a significant tax decrease due to the proposed expansion of the Child Tax Credit.

What was the American Rescue Plan's Child Tax Credit?

For the 2021 tax year only, the American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,600 for children under 6 and $3,000 for children aged 6 to 17. It also made the credit fully refundable, meaning families could receive the full amount as a refund even if they had no tax liability. This calculator models the effect of making that one-year expansion permanent.