Biden Administration Has Been a Net Tax-Cutter, Study Finds

We read his lips and Joe Biden said he’s raising taxes, but so far it’s all talk.

At least that’s according to an analysis of his tax policies conducted by the Urban-Brookings Tax Policy Center and published by The New York Times on Monday, which posits that the president has in fact slashed taxes through his first three-years-and-change in office.

The Tax of Life

Biden has spoken at length recently about his desire to raise taxes on the wealthy and the biggest of corporations. At his State of the Union address, Biden proposed increasing the minimum corporate tax rate to 21% from 15% on businesses that report annual profits of $1 billion or more, a tax levied by the 2022 Inflation Reduction Act. Biden also proposed increasing the overall corporate tax rate to 28% from 21%, bumping a stock buyback tax to 4% from 1%, and imposing a 25% minimum tax rate on individuals worth more than $100 million.

But dreams of a 21st-century New Deal have been squashed by the same old DC roadblocks: gridlock and compromise. According to the analysis by the Urban-Brookings Tax Policy Center, a liberal-leaning think tank, those political hurdles have led the administration to effectively lower the nation’s total tax burden by $600 billion over Biden’s term. The cuts have been felt by both companies and citizens alike:

• Individuals, particularly in the middle and lower class, have received a variety of tax cuts from Biden-passed legislation, including the expanded child tax credit from the 2021 stimulus bill, and cuts and incentives from the climate-focused IRA bill for people who buy tech like heat pumps or EVs.
• Companies, meanwhile, benefited from other climate-focused tax incentives from the IRA by investing in or manufacturing emissions-reducing equipment and tech. Tax breaks from the semiconductor-focused 2022 Chips and Science Act have also played a role in the net reduction of taxes, the analysis found.

The report looked solely at changes to the tax code during Biden’s tenure, meaning it excludes the impacts of inflation as well as certain costs associated with new regulations.

Trillion With a T: Still, Biden continues to push for higher taxes. If Congress passed the tax hikes in the administration’s most recent budget proposal, it would result in a net increase of about $5 trillion over the next decade, the White House says. Meanwhile, the administration also directed billions in funding to the Internal Revenue Service, which saw an annual budget decrease between 2010 and 2021 to $12 billion a year from around $15 billion, when accounting for inflation. The administration’s goal? Close the gap between what taxpayers owe and what they pay, which the White House claims reached $688 billion in 2021.