No matter who is president, chances are that they will have different ideas on taxes that will change the amounts individuals and companies will have to pay. And, under new President-elect Joe Biden’s impending presidency, that doesn’t seem likely to change. Therefore, keep up with the latest changes to tax rates by checking out our quick, simple explainer blog on the topic.
Potential Tax Rates and Changes Expected under Biden
Corporate Tax Rates
One of President-elect Biden’s most touted tax rate changes includes an increase to the corporate tax rate to 28 percent. Biden reportedly intends to repeal President Donald Trump’s tax plan, which initially lowered the corporate tax rate from 35 percent to 21 percent.
However, according to the recent Q4 CNBC Global CFO Council Survey, the vast majority of corporate CFOs do not anticipate Biden’s business tax hike will go through as planned. In fact, they generally believe he will be more neutral to businesses and corporations, with more of a focus on pandemic spending and economic growth instead of changes to corporate tax rates.
Social Security
One of President-elect Biden’s most contentious proposed tax rates is an increase on payroll taxes for those earning over $400,000 a year. The plan ultimately aims to boost revenue to Social Security by imposing a 12.4 percent payroll tax on those higher earners.
Deductions
Another one of President-elect Biden’s proposed changes to tax rates encompasses Qualified Business Income. If he goes through with his plan, his administration would phase out and eventually remove the 20 percent Qualified Business Income (QBI) Deduction on taxpayers making more than $400,000 per year.
Although there’s been a lot of chatter about these policies, there’s no telling what could actually happen during Biden’s administration in our current economic climate. Keep an eye on the news and our Calabrese & Associates, P.C. blog in the coming months for more information as it becomes available.