Joe Biden's tax plan would see the highest earners in California and New York City paying as much as 62% in combined federal and state taxes, while top earners in New Jersey could face a combined rate totalling over 60%.
Top earners in New York state could pay slightly more than a 58% tax rate.
These calculations from the Tax Foundation come as discussions related to taxes on the wealthy have picked up steam, with the election now just two weeks away.
An analysis in September by the University of Pennsylvania's Wharton School of Business' Budget Model concluded that households earning under $400,000 won't see their taxes increase under Biden's proposal.
High-income earners in states such as California and New York could be hit the hardest from Joe Biden's tax plan if he wins the race for the White House.
Taxpayers making over $400,000 in California might have to pay as much as 62.6% combined in federal and state taxes, while top earners in New Jersey could face a combined rate totalling over 60%, according to a study released on Tuesday by Jared Walczak of the Tax Foundation, a DC-based think tank.
High earners in nearby New York state could pay slightly more than a 58% tax rate. That mark for residents of New York City would reach more than 62%.
Furthermore, the study concluded that if Democrats win back the Senate, therefore taking majority control in Congress, then the Biden administration will be in position to pass legislation that would remove the $10,000 cap on state and local tax deductions. This would help reduce the tax rates for high-income earners.
The statutory tax rate for high-income earners in the US sits at 37% now, but they usually only end up paying 26.8% due to loopholes and deductions, per the study. The Biden campaign didn't return Business Insider's request for comment on the study's findings on the candidate's proposal.
"These combined rates would be the highest since the Tax Reform Act of 1986, which reduced the top marginal individual income tax rate from 50% to 28% over two years," Walczak wrote. "The all-in federal rates would be the highest since 1981."
These calculations from the Tax Foundation come as discussions related to taxes on the wealthy have picked up steam with the election now just two weeks away and the final debate between Biden and President Donald Trump approaching on Thursday evening.
During the first debate on September 29, Biden circled back on what he often touts to be the "K-shaped" economic recovery in the US. Economists describe the "K-shaped" recovery when high-income earners see their income grow and jobs return, where as middle and lower-income earners don't quite see the same results. Biden's tax plan is similarly K-shaped, with higher taxes on the high-income earners and lower for the rest.
This summer, The National Bureau of Economic Research said that the US dove into a recession in February. Simply put, the record-long, 128-month streak of economic expansion nationwide, dating back to June 2009, came to a close.
"Millionaires and billionaires like [Trump] in the middle of the COVID crisis have done very well. Billionaires have made another $300 billion because of his profligate tax proposal, and he only focused on the market," Biden said that night. "But you folks at home, you folks living in Scranton and Claymont and all the small towns and working class towns in America, how well are you doing?"
Biden previously defined those making $400,000 or more as "wealthy," according to CNBC, but Trump has been critical of Biden's proposed tax hikes. The president has claimed that Biden's economic plan would lead to tax increases on middle-class Americans, but multiple nonpartisan analyses have shown that Biden's plan wouldn't result in that.
For example, an analysis in September by the University of Pennsylvania's Wharton School of Business' Budget Model concluded that households earning less than $400,000 won't see their taxes increase while the top 0.1% might pay an additional 12.4% under Biden.
"Nobody making under $400,000 would have their taxes raised. Period, bingo," Biden said in May. "Let's get people back to work."
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