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Fact Check-Biden is not proposing a 52% income tax rate for anyone earning above $29,000

Social media users have been sharing posts that claim President Biden is proposing a 52% tax rate on incomes above $29,000 a year, meaning that the $15 per hour minimum wage he is proposing would leave people with $7.20 per hour net pay. In February 2020, Reuters debunked the exact same claim with the same figures but featuring 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% payroll tax) would only apply to those earning over $400,000.

The posts (here , here , here) calculate that Biden’s proposed minimum wage of $15 per hour would amount to $31,200 per year. They then say, “Biden wants free health care for all and was asked how he would pay for it. His answer was (to) raise taxes to 52% on anybody making over $29,000 per year.” This comment is followed by calculations which show that if the income of $31,200 per year was taxed at 52% the individual would receive a net salary of $7.20 per hour: “So much for the $15 an hour minimum wage.”

In February 2020, Reuters fact-checked the same claim made against Bernie Sanders and found it to be false, as Sanders’ proposed 52% tax rate applied to incomes over $10 million, as seen here 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 Feb. 25, the Senate parliamentarian ruled the chamber could not include the proposed $15-an-hour minimum wage in the $1.9 trillion coronavirus recovery bill (here). But House Majority Leader Steny Hoyer said on March 2 the House of Representatives will consider the $15 minimum wage in the “near future”, without giving specifics (here).

Biden’s tax plans include an increase to the top income tax rate for taxable incomes 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 public policy think tanks based in Washington, D.C. (here , here).

Biden also plans to subject wages above $400,000 to a 12.4% payroll tax, half of which is paid by employers and half by employees ( here ). As such, a 52.0% tax on income would only apply to those in the highest tax band as they would pay both sides of this payroll tax (here). Reuters found no mention of changing the tax rate paid by those in the lowest income bracket in the Tax Foundation and Committee for a Responsible Federal Budget explanations of Biden’s tax plan, nor in this breakdown by Investopedia, which explains: “A key element of the President's policy is the use of tax credits, often refundable, rather than tax deductions, to counter the greater savings that deductions provide to higher-income taxpayers compared to lower- and middle-income individuals” (here).

At the time of publication of this article, the marginal tax rate (as referenced here ) for a household making more than $29,000 (and below $40,525) is 12%.

Reuters has previous fact-checked other claims related to Biden’s tax plans (here , here , here).

VERDICT

False. Under Biden’s tax plan, a 52% income tax rate (which includes a 12.4% payroll tax) would only apply to those earning over $400,000 a year.

This article was produced by the Reuters Fact Check team. Read more about our fact-checking work here .

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