As we get ready to watch the Republican convention and the other side of our democracy, one thing that we cannot forget is what the next president is going to have to deal with, whoever it is: the government is going to need tax money for government revenues when it will try to assist lower paid workers with children.

 

What is Joe Biden’s plan for this?

 

1. He wants to make corporate taxes higher.

Under his tax plan, the corporate tax rate would be increased to 28 percent, almost a 30 percent increase from where it is now.

Increasing the corporate tax rate to 28 percent, Biden believes, should generate between $3.3 trillion and $3.7 trillion in estimated extra revenue over the next decade. Joe is also insisting on a minimum, absolute business tax of 15 percent. According to Joe, there will be no more write-offs to zero percent like he says is the case with Amazon, for example.

 

2. A 50 percent increase in corporate international tax

Biden’s tax plan would also double the tax rate on Global Intangible Low-Tax Income (GILTI) earned by foreign subsidiaries of U.S. companies. Currently, this is set at 10.5 percent. The GILTI tax rate would increase to 21 percent.

 

3. A new “financial risk” fee on banks

Joe believes that big banks should maintain Federal Deposit Insurance ( FDIC) but he says this insurance should be paid for, and covered by banks, not the government.

 

4. A 10 percent wealth tax

If you make over $500,000 a year, get ready to pay more in taxes. Biden would like to see America’s richest workers open up their wallets. He’ll do this by raising the top marginal income-tax bracket from 37 percent to 39.6 percent.

 

5- A payroll tax for people making over $400,000

Currently exempted from paying 12.4 percent Social Security tax, under Biden’s proposal, those making over $400,000 would have this tax reinstated.

 

6. Higher capital gains taxes

If you make $1 million, currently your capital gains tax rate is close to 40 percent. Under Biden’s plan, it could go as high as 43 percent, representing an 8 percent increase.

 

7. Limit itemized deductions

Itemized tax deductibles from medical expenses to charitable contributions would be capped at 28 percent. So, if you are someone who normally falls into a tax bracket over 28 percent, you’ll actually lose more deductibility.

 

8. Lower small business deductions

If you make more than $400,000 in business earnings, you can expect your small business deductions to be phased out. This could be a loss of over 40 percent.

 

9. Institute first-time homebuyers’ and renters’ tax credits

Biden talked up the idea of providing new homebuyers with a tax credit worth up to $15,000. Known as the First Down Payment Tax Credit, it would aid first-time homebuyers in covering the initial costs and fees associated with purchasing a home.

 

Additionally, Biden wants to provide Section 8 housing vouchers to eligible families so they won’t have to spend more than 30 percent of their income on rent.

 

10. More money for child & dependent care 

Joe wants to increase the allowance of extra monies for child and dependent care credits, from the current $2,100 to $8,000, a 74 percent increase.

 

So, if you make under $100,000, have children or are buying a home, you can get lower taxes by about 20% down the Biden Plan road. If you make over $400,000 in income, own a business, and handle foreign exchange, get ready to cough up an extra 80%. In between, what many would call the middle class, the change would be miniscule.

 

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info, The Parkchester Times and The Bronx Chronicle. Mr.  Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. You can reach Anthony at 347.575.5045.