House Democrats’ tax proposals would impose the biggest tax increases on households with income of at least $1 million, according to an analysis released Monday by the Joint Committee on Taxation (JCT).
The analysis takes into account Democrats’ proposals to raise taxes on high-income individuals and corporations and to extend the expansion of tax credits for low- and middle-income households.
In 2023, households with income of more than $1 million would see federal taxes increase by 10.6 percent, and they would see their average tax rate increase from 30.2 percent under current law to 37.3 percent. Households with income of less than $200,000 would see their taxes decrease, the JCT said.
Much of Democrats’ proposed expansion of the child tax credit would expire after 2025 — the same time the individual tax provisions in Republicans’ 2017 tax law would expire.
The JCT estimated that in years following the expiration of the child tax credit expansion, some middle-income groups would see slight tax increases, while households with at least $1 million in income would continue to see larger tax increases.
President Biden has pledged to not raise taxes on households making less than $400,000. The JCT estimates that a portion of corporate tax increases fall on labor. However, an economic aide to Biden’s presidential campaign said in 2020 that the experience with the 2017 tax law raises questions about that notion.