President Biden’s proposed top income tax bracket of 39.6 percent would impact single filers with income above about $453,000 and married couples with income above roughly $509,000, a White House official said.
Biden is proposing as part of his American Families Plan to raise the top rate to 39.6 percent from 37 percent, bringing the rate back to where it was prior to the enactment of former President Trump’s tax law.
The details about the income thresholds for the 39.6 percent bracket provide further clarity about how Biden’s pledge to not raise taxes on taxpayers making under $400,000 would work.
“Consistent with the President’s campaign proposal, we are proposing to reverse the tax cut for the top bracket by returning that top tax bracket to what it would’ve been under pre-2017 law,” a White House official said in a statement. “That applies to less than 1 percent of Americans — the very top earners.”
“In 2022, those pre-2017 brackets are expected to be about $452,700 in taxable income for a single individual and $509,300 in taxable income for a married couple,” the official added. “That means if you are a married couple earning up to $509,300 — you will not see a dollar increase in your taxes.”
Axios first reported Thursday on the proposed income thresholds.
Biden repeatedly spoke about a $400,000 threshold for tax increases when he was running for president and has continued to emphasize it since taking office. The president has used varying language when talking about his pledge, not always being clear about whether the $400,000 threshold applied to single filers, married couples or both.
During his speech before a joint session of Congress Wednesday, Biden said, “I will not impose any tax increase on people making less than $400,000.”
In recent weeks, the White House has said that the $400,000 threshold applies both to single filers and married couples. That prompted some conservatives to argue that Biden has been misleading, since a couple whose combined income is above $400,000 could see tax increases even if each spouse’s individual income is under that amount.
The White House said that the U.S. tax system is based on family income, and said that the proposed income thresholds for the 39.6 percent bracket are consistent with Biden’s campaign promise.
“The President’s pledge stands — if you are an American individual or family earning less than $400,000, you will not see a dollar increase in your taxes,” the White House official said. “And in fact, for the top bracket, it’s actually a little higher than that.”
In 2017, the last year before Trump’s tax law took effect, taxable income above $418,400 for single filers and $470,700 for married couples was taxed at the 39.6 percent rate. The income thresholds for tax brackets are adjusted annually for inflation.
The current top tax rate of 37 percent applies for 2021 to income above $523,600 for single filers and $628,300 for married couples.
It’s unclear whether Biden’s proposed top tax rate, and the related proposed income thresholds, will ultimately be enacted. Lawmakers have not yet released legislative text based on Biden’s proposals, and it’s possible that some Democratic lawmakers could have concerns with the president’s proposed bracket.