It is time to see how President Biden’s proposed tax plans will affect you and your family. When President Biden took office, he laid out his plan to fund expanded education, child care, paid leave and other program reforms. We now have a fairly detailed idea of how he intends to pay for it. Biden has laid out a tax plan that will draw over $1.5 Trillion dollars from the taxes of the wealthy.
In 2017, the Tax Cuts and Jobs Act lowered the top income tax rate from a record high 39.6%, down to 37%. It has been that way since. Biden’s proposal would call for an increase in the tax rate for those making over $400,000 a year back to 39.6%. In making this adjustment, as well as a raise in capital gains tax rates, and wealthy estates, what is being called the American Families Plan would raise over $1.5 Trillion over a decade. This tax increase was already on the books for 2025, the President has chosen to just move it up by four years. Biden has also proposed raising the corporate tax rate.
More details of President Biden’s tax proposal include a 12.4% Old-Age, Survivors, and Disability Insurance payroll tax on income of $400,000 or more. This tax increase is to be split evenly between employers and employees, and creates a hole in the current Social Security tax. Those with wages between $137,700 and $400,000 fall into said hole, and will not be taxed.
I do not want to turn this into a spreadsheet where I regurgitate numbers that can be found on another spreadsheet by simply Googling the words “Biden” and “Taxes.” What is important to take note of is that there are massive changes being proposed, and it is important to sit down with someone who understands the impact of these changes on you, your family, and/or business. ORT Consulting has documented experts that enjoy spending time with their clients breaking down the difference between the Child Tax Credit and the Child and Dependent Care Tax Credit, and which apply to you and your family. It is important to prepare the future of your finances today, and if you are interested in how the specialists at ORT Consulting can help you secure your financial future in the unsteady climate of Proposed and Actual tax changes, please visit www.ortconsulting.com