Social media users have shared posts claiming that President Biden proposes a 52% tax rate on income above $ 29,000 per year, which means that the minimum wage of $ 15 per hour he proposes is people with $ 7.20 per hour net salary will leave. In February 2020, Reuters rejected exactly the same allegation with the same figures, but the name of Democratic presidential candidate Bernie Sanders in the same text. Under Biden’s tax plan, a 52% income tax rate (which includes a 12.4% tax rate) only applies to those earning more than $ 400,000.
The posts (here, here, here) calculate that Biden’s proposed minimum wage of $ 15 per hour would be $ 31,200 per year. They then say: ‘Biden wants free health care for everyone and he was asked how he would pay for it. His answer was (to) increase taxes to 52% on someone earning more than $ 29,000 a year. This remark is followed by calculations which show that if the income of $ 31,200 per year is taxed at 52%, the individual will receive a net salary of $ 7.20 per hour: ‘So much for the minimum wage of $ 15 per hour.’
In February 2020, Reuters actually reviewed the same claim against Bernie Sanders and found it to be false, as Sanders’ proposed 52% tax rate applies to revenues of more than $ 10 million, as seen here.
Biden and many of his fellow Democrats want to more than double the minimum wage by 2025 from $ 7.25 per hour to $ 15 per hour. On February 25, the Senate MP ruled that the chamber could not include the proposed minimum wage of $ 15 per hour in the $ 1.9 billion coronavirus recovery bill (here). But House Majority Leader Steny Hoyer said on March 2 that the House of Representatives would consider the $ 15 minimum wage in the ‘near future’, without giving details (here).
Biden’s tax plans include an increase in the highest income tax rate for taxable income above $ 400,000 per year from 37% to 39.6%, as explained by the Committee for a Responsible Federal Budget and the Tax Foundation, which are independent think tanks of the public policy based in Washington, DC (here, here).
Biden also plans to pay wages of more than $ 400,000 at a 12.4% tax, half of which is paid by employers and half by employees (here). As such, a 52.0% tax on income will only apply to those who have the highest tax, as they will pay both sides of this payroll tax (here). Reuters finds no mention of the change in the tax rate paid by those in the lowest income group in the Tax Foundation and the committee for a responsible statement of the federal budget of Biden’s tax plan, nor in this statement by Investopedia, which states: ‘An important element President’s policy is the use of tax credits, often repayable, rather than tax deductions, to counteract the greater savings that deductions offer to taxpayers with higher incomes compared to individuals with lower and middle incomes “(here).
At the time of publication of this article, the marginal tax rate (as referred to below) for a household earning more than $ 29,000 (and below $ 40,525) is 12%.
Reuters has factually reviewed previous claims related to Biden’s tax plans (here, here, here).
VERDICT
Untrue. Under Biden’s tax plan, a tax rate of 52% (which includes a 12.4% tax rate) only applies to those earning more than $ 400,000 a year.
This article was produced by the Reuters Fact Check team. Read more about our fact-checking work here.