Despite President Joe Biden’s vow to tax the country’s upper class, excluding those who make less than $400,000, the middle-class households will see a fairly small amount raise in taxes.

“Taking into account all major tax provisions, roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022. However, their tax increases would be very small”, documents the Tax Policy Center.

The report also added, “Among those with a tax increase, low- and middle-income households would pay an additional $100 or less on average. Those making $200,000-$500,000 would pay an average of about $230 more”.

The analysis further revealed that even if some middle-class households face a modest increase, the country’s overall lower and middle class will enjoy a decline in taxes, as Biden promised. Since the current plan includes Child Tax Credits only through the coming year, the tax picture for the year 2023 would be completely different.

20 percent to 30 percent of middle-income Paid high taxes

As per TPC estimates, the “effects of these changes would result in many households paying higher taxes in 2023 than in 2022. They would shrink the average 2023 tax cuts for low-income households, raise taxes slightly for moderate-income households, and increase taxes significantly for the highest-income households.”

The analysis came as a result of the document that the congressional Joint Committee on Taxation reviewed on Nov 4. However, the document is yet to pass as it is currently under negotiation.

On the flip side, the other proposal elements, which claim to increase the deduction percentage on state and local taxes, seem to favor the upper class living in high-tax states.

The TPC document states, “Despite what its promoters say, raising the cap to $80,000 would provide almost no benefit for middle-income households. It would reduce their 2021 taxes by an average of only $20”

 ‘Even those making between $175,00 and $250,000 would get a tax cut of just over $400 or about 0.2 percent of after-tax income. By contrast, the higher SALT cap would boost after-tax incomes by 1.2 percent for those making between about $370,000 and $870,000 (the 95th to 99th percentile),’ It added.

A separate analysis that the Responsible Federal Budget committee performed revealed that households earning an income of $1 million would get more considerable relaxation in taxes compared to those earning $50,000 to $100,000.

If we talk in terms of numbers, a household earning $1 million will save approx  $25,900 in taxes while those earning $50,000 to $100,000 would save only $2600.

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