The Truth About Trump’s and Biden's Tax Plans

The Truth About Trump’s and Biden's Tax Plans

REUTERS/Kevin Lamarque

In his speech Thursday night accepting the GOP presidential nomination, President Trump, like many other speakers at the Republican National Convention this week, unleashed a flood of falsehoods and misleading statements.

Trump’s overarching message was a stark and disturbing one: Joe Biden would be a Trojan horse for socialism, opening the door for the “wild-eyed Marxists” on the radical Left to transform America into a socialist dystopia, undermining the greatness that Trump had restored before the coronavirus pandemic struck — greatness that Trump will quickly restore again now that the virus has been effectively controlled and a vaccine will soon be ready under his unparalleled leadership.

The reality: That message, and the various claims underlying it, may resonate with Trump’s ardent base of supporters, but it distorts reality. For one thing, more than 42,000 new Covid-19 cases were reported Wednesday alone and 2,700 more Americans have died since the week began, the Associated Press reports. CNN counted more than 20 “false, exaggerated or misleading claims” by Trump. The Washington Post’s fact-checkers listed 25 statements that caught their attention as part of what they called the president’s “tidal wave of tall tales, false claims and revisionist history.”

The distortions go well beyond politics as usual. “While all political confabs involve some level of spin and revisionism, the Republican National Convention this year has stood out for its brazen defiance of facts, ethical guidelines and tradition, according to experts on propaganda and misinformation,” the Post’s Toluse Olorunnipa reports.

Trump bashes Biden on taxes: The GOP claims about a sinister socialist agenda under Democrats upending an American way of life focused largely on stoking fears about public safety, with Trump claiming that under Biden, “the radical Left will defund police departments all across America,” even though Biden has said he opposes defunding the police.

But as part of his warnings, Trump also touched on taxes as a key difference between him and his rival. Here’s what Trump said on Biden’s tax plan, and his own:

"[Biden] has pledged a $4 trillion tax hike on almost all American families, which will totally collapse our rapidly improving economy. ... On the other hand, just as I did in my first term, I will cut taxes even further for hard-working moms and dads. I will not raise taxes. I will cut them, and very substantially. And we will also provide tax credits to bring jobs out of China back to America, and we will impose tariffs on any company that leaves America to produce jobs overseas.”

The facts: It’s true that Biden’s tax proposals are expected to raise about $4 trillion over a decade, but analyses by the Tax Policy Center and the Committee for a Responsible Federal Budget (CRFB) say that the increases would be heavily focused on top earners and corporations. Biden has pledged that he will not raise taxes on people earning less than $400,000. The Tax Policy Center projects that more than 90% of the tax increases under Biden’s plan would be borne by the top fifth of income earners, and two-thirds of the increases would hit the top 1% of earners.

"The Biden tax plan is highly progressive, increasing taxes for the top 1 percent of earners by 13 to 18 percent of after-tax income, while indirectly increasing taxes for most other groups by 0.2 to 0.6 percent," the CRFB said in a report last month.

As for Trump’s tax plan, well, there isn’t one per se. The president has talked about cutting taxes on capital gains and for the middle class, and he has said he wants payroll taxes he deferred through the end of the year by executive action to be forgiven. But he hasn’t released details of what he would do.  A bullet-pointed list of Trump’s second term agenda released this week by his campaign includes vague promises to “Cut Taxes to Boost Take-Home Pay and Keep Jobs in America” and enact "Made in America” tax credits and “Tax Credits for Companies that Bring Back Jobs from China.”

“The Trump campaign has promised more detail on his second-term agenda, and we certainly hope that includes a formal tax plan…but we're not holding our breath waiting for that to happen,” Kiplinger’s Rocky Mengle wrote this week. “Unfortunately, there's a good chance we'll have to make do with the scant information currently available when trying to figure out what the president would do about taxes during a second term. Plus, adding to the confusion, the president has occasionally come out in favor of a particular tax proposal, only to reverse course or walk back support for it later.”

That all makes it difficult to project what tax policies Trump might pursue if re-elected. “Without further details or clarification, it is difficult to fully analyze President Trump’s second term tax policy agenda,” the Tax Foundation’s Erica York wrote this week. It's safe to say Trump won’t be looking to raise taxes, but it’s also worth noting that any large-scale tax changes or cuts the president might seek to enact would have to be done through congressional legislation, meaning they would more than likely need substantial Democratic support.

Read more about Biden’s tax plan at the Tax Policy Center or Committee for a Responsible Federal Budget. Read more about Trump’s possible tax plans at Kiplinger or the Tax Foundation.