On Friday, Axios published a piece on President Joe Biden’s upcoming tax proposal, promoting it on Twitter with a sensationalistic description calling it “eye-popping” — even though it is essentially in line with Biden’s platform during the 2020 election and thus shouldn’t come as a surprise to anybody.
For one thing, the proposed top marginal income tax rate would simply match the past rate under President Bill Clinton in the 1990s and President Barack Obama in the mid-2010s. And an increase of only 2.6 percentage points from the current top rate of 37% is hardly revolutionary.
The changes to capital gains tax rates are a bit more complicated to explain. However, the change would apply to only those making over $1 million annually, according to the initial Bloomberg report. And even then, the proposal still needs to get through a closely divided Congress, and thus may present an opening position for further negotiations with moderate Democrats toward an increase to some different rate.
During the 2020 campaign, Biden proposed to tax capital gains at the same rate as regular income for those earning over $1 million annually. The lower tax rates for long-term capital gains as compared to ordinary income, and the disproportionate benefit this accrues to the wealthy, have long been an issue for progressive policymakers. So neither Biden’s proposal in 2020 or his pursuit of it now should come as any surprise.