Biden Tax Plan — Smart Financial Analysis
Compare current vs proposed Biden tax plan. How proposals affect high earners ($400K+), corporations, capital gains, families, and estates. Neutral, educational.
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Biden proposed raising the corporate tax rate from 21% (TCJA) to 28%. Proposed expansion: $3,600 per child under 6 and $3,000 per child ages 6-17 (up from $2,000). Proposed lowering the estate tax exemption from $12.92M (2024) to ~$3.5M per person.
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Why: Key proposals: restore 39.6% top income rate (from 37%), tax capital gains as ordinary income for $1M+ earners, raise corporate rate from 21% to 28%, expand child tax credit to ...
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The Biden tax plan proposed significant changes affecting high earners ($400K+), corporations, and capital gains. Key proposals: restore 39.6% top rate (from 37%), tax capital gains as ordinary income for $1M+ earners, raise corporate rate from 21% to 28%, expand child tax credit to $3,600/child, apply 12.4% Social Security tax on earnings above $400K (creating a 'donut hole'), and lower estate tax exemption from $12.92M to ~$3.5M. For families earning under $400K, the plan would generally mean lower taxes through expanded credits.
Sources: Tax Foundation, Tax Policy Center, Congressional Budget Office, White House.
Key Takeaways
- • 39.6% top individual rate (up from 37%), 28% corporate rate (up from 21%)
- • Capital gains taxed as ordinary income above $1M
- • $400K threshold: no tax increase for those below
- • Child tax credit expansion: $3,600/child under 6, $3,000 ages 6-17
Did You Know?
Individual Tax Changes
Top bracket 37% → 39.6%. No increases for incomes under $400K. Expanded Child Tax Credit.
Who Is Affected?
Single filers earning over $400K and married couples over $400K combined. Capital gains changes apply to those with AGI over $1M.
Corporate Tax Changes
Proposed 28% corporate rate (up from 21%). A $10M profit corporation would pay $700K more in federal tax.
Capital Gains Reform
For incomes above $1M, long-term capital gains taxed at ordinary income rates (up to 39.6%) instead of 20%. A $1M LTCG would face ~$196K more in tax.
Child Tax Credit Expansion
$3,600 per child under 6, $3,000 per child ages 6-17 (up from $2,000). A family earning $75K with 2 kids would save $3,200 annually.
Estate Tax Changes
Proposed lowering exemption from $12.92M to ~$3.5M. A $15M estate would have ~$3.5M+ newly taxable at 45%.
Disclaimer: Estimates only. Tax law changes through legislation. Consult a tax professional. Not tax advice.
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