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Joe Biden says he won’t raise taxes on anyone making under $400,000

The announcement is a firm line on where the presumptive Democratic nominee defines middle class versus rich in the United States

Former vice president Joe Biden participates in a Democratic presidential primary debate at CNN Studios in Washington D.C. on March 15, 2020. (Evan Vucci/AP)

Former vice president Joe Biden, the presumptive Democratic nominee for president, said Friday that he would not raise taxes on anyone making less than $400,000.

“Nobody making under $400,000 bucks would have their taxes raised. Period. Bingo,” Biden said in an interview on CNBC, the business news channel.

The announcement from Biden is a firm line on where he defines middle class versus rich in the United States, and it is notably higher than former president Barack Obama’s promise on the 2008 campaign trail not to raise taxes on households earning less than $250,000. Biden has opted to hike taxes only on the top 2 percent of earners. Obama’s income threshold was roughly at the top 5 percent mark, according to U.S. Census data.

Biden has been clear that he believes taxes should go up on the rich. He plans to roll back President Trump’s tax cuts on households making above the $400,000 threshold and on corporations. Trump’s tax law reduced the income tax on the richest Americans from 39.6 percent to 37 percent.

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Trump and Republicans in Congress also enacted the largest corporate tax cut in U.S. history, by slashing the corporate tax rate from 35 percent to 21 percent in 2017. They vowed it would spur growth and investment so much that it would pay for itself. The economy did experience faster growth in 2018, but the bounce was short-lived. Many Democrats criticized the tax cut as a costly giveaway to businesses, and economists across the political spectrum say the tax cuts added $1 trillion to $2 trillion to the debt.

Biden blasted the corporate tax cut from 2017 and said it would be a mistake to reduce corporate taxes even further right now.

“The president is talking about a greater tax cut for corporations. You tell me what you think, how many jobs that will create in the next six months?” Biden said.

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If elected president, Biden has vowed to raise the corporate tax rate to 28 percent. Some business leaders and economists are concerned about Biden attempting to hike taxes next year when the nation is likely to still be in the midst of a global pandemic and the worst economic crisis since the Great Depression.

On Friday, Biden dodged repeated questions about whether he would try to raise taxes in his first year in office. Instead, the former vice president emphasized that big businesses and the wealthy need to pay their fair share — money he argued could be used to aid small businesses and workers out of jobs.

“The biggest corporate bailout in American history is asking next to nothing of corporate America,” Biden said. “I don’t think any company, I don’t give a damn how big they are, the Lord almighty, should absolutely be in a position where they pay no tax and make billions and billions and billions of dollars."

Biden singled out Amazon for not paying enough in taxes after it did not pay any federal income tax in 2017 or 2018. (Amazon chief executive Jeff Bezos owns The Washington Post).

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An Amazon spokesperson said “we pay every penny we owe” and pointed to recent blog post where the company said it will pay $1 billion in federal income taxes for 2019. That includes $162 million paid right away and $900 million to be paid later on as the company is legally allowed to defer some of the tax payments.

Tax policy is poised to play a central role in the election as President Trump and the Democratic nominee have very different views on tax rates. The median household income in the United States is just over $63,000, meaning half of households earn more and half earn less. Living costs and salaries vary greatly by where people live