Report: Biden proposals increase taxes for average taxpayers in all states

(The Center Square) – The Tax Foundation released a report showing President Joe Biden’s latest proposals would increase taxation on the average taxpayer in every state by 2026.

The report appears to back Republican claims that Biden’s budget will raise taxes on average Americans. While the tax increases vary by state, but the report shows taxpayers in every state will pay hundreds to thousands of dollars more on average.

The findings also indicated indicated the average taxpayer in a few states, like Alabama, Nebraska and West Virginia, would see tax cuts from 2022 through 2025, before seeing increased tax rates through 2031. The average taxpayer in these states would see an increase in taxes year to year of nearly $500 in 2031.

Taxpayers in these states will see decreased tax rates on average through 2025 due to the Biden administration’s extension of the child tax credit though that year. The proposed extension of the child tax credit in Biden’s budget would give parents up to $2000 credit per child dependent on their taxes through 2025.

Will McBride, one of the authors of the report, says the tax increases would mainly target wealthier parts of the country.

“The areas of the country with high-income earners, particularly in and around the San Francisco Bay Area, Los Angeles, New York City, and other major cities, would experience large tax increases that would substantially reduce the disposable income of many residents, reducing local expenditures that local businesses and workers rely on,” McBride said.

The average taxpayer in states like California, Connecticut and New York would see increases in their taxes of $2,000 per filer by 2031. In those states the average increase total from 2022-2031 would be anywhere from $14,000 to $17,000.

By the final year of the proposed spending, 2031, the average taxpayer in every state and the District of Columbia would be paying higher taxes. The area with the highest increase in taxes to the average taxpayer from 2022 through 2031 is the District of Columbia with $22,386 total.

McBride also explained how they were able to understand how tax rates would change for the average taxpayer under these proposals.

“We estimated the federal revenue generated by the proposals and allocated the tax changes across the country based on IRS statistics providing income and tax characteristics for groups of tax filers in each congressional district,” McBride said.

The report cites Biden’s 2022 budget proposal, which include his American Families Plan and his American Jobs Plan.

The American Families Plan is nearly $1.8 trillion in spending on issues like universal pre-school and free community college. The American Jobs Plan calls for nearly $2 trillion in funding for broad infrastructure programs.

Biden has turned his focus on infrastructure to the $1.2 trillion bipartisan package, while looking to get the other parts of his American Jobs Plan passed through reconciliation.

The bipartisan agreement deals with the physical infrastructure aspects of the original plan, such as roads, bridges, rail and broadband internet.

Biden, speaking last Tuesday in Wisconsin, pushed for fairer taxation and for his other legislative proposals, like the American Families Plan.

“The point is, I have never had a reputation of being someone who’s out there trying to just out-tax people,” Biden said. “But here’s the deal, folks: I think it’s about time there be fairness in the tax code.”

Republicans blasted Biden’s budget proposal when it was released claiming it would have negative effects on the average taxpayer. The overall budget proposal appears to have an adverse effect based on this report.

Senate Minority Leader Mitch McConnell, R-Ky., blasted the proposed budget in a statement in May.

“President Biden’s proposal would drown American families in debt, deficits, and inflation,” McConnell said. “Even after the massive tax hikes Democrats want to force on the American people, they’d still have the government running trillion-plus-dollar deficits every year.”

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