Biden says Trump's failure to concede won't affect transition

Washington (CNN)The vast majority of Americans are unlikely to see their taxes go up under President-elect Joe Biden, despite false claims by President Donald Trump to the contrary.

In fact, middle-income households could see an average tax cut of $680 and low-income households could see their tax bills fall by $760, according to an analysis by the Urban-Brookings Tax Policy Center. Only the wealthy and corporations would see their tax bills go up under Biden’s proposals.
But even those plans are likely to be dead on arrival if Republicans win at least one of two runoff races in Georgia set for January 5 and keep control of the Senate. If Democrats flip both of those seats, the Senate would be evenly divided, giving Vice President-elect Kamala Harris the tie-breaking vote.

    Even then, raising taxes on anyone might be a hard sell during a pandemic. Americans could instead see bipartisan support for tax changes that lower the burden for some, like expanding the child tax credit or tax benefits for saving for retirement. Versions of both already have support from lawmakers on both sides of the aisle and were included in Biden’s broad plan.

    What’s in Biden’s proposal

    Biden’s campaign plan wouldn’t raise individual taxes on anyone earning less than $400,000 a year, which is more than 90% of taxpayers. But it would reverse the Republican-backed 2017 tax cuts for those earning more and increase the corporate tax rate from 21% to 28%.
    Those tax hikes were expected to bring in more than $2 trillion in revenue over 10 years, which would help pay for some of Biden’s other plans to increase federal spending in areas like education, health and the environment. Without the tax increases on corporations and the wealthy, he may not be able to get some of those other agenda items done.

    The looming sunset

    The Republican tax package included key provisions that end in 2025, which means that lots of people will see their taxes go up if Congress doesn’t pass an extension — creating a looming headache for a second Biden term or for whoever succeeds him.
    In the short term, there would still be the question of how to pay for any additional tax cuts to help groups suffering from the pandemic or the recession. It’s possible those provisions could be included in a pandemic-related stimulus bill and the cost would ultimately be added to the budget deficit. Otherwise they may have to be funded with some kind of tax hike.

      Howard Gleckman, a senior fellow at the Tax Policy Center, isn’t ruling out a tax hike on corporations — but not on individuals — to pay for some of those things even with a divided Congress. He sees a situation where the Democratic-controlled House sends a bill to the Senate with a tax cut for the average American family that could put Republicans in a bind.
      “I think it would be hard for Republicans to resist,” Gleckman said.
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