Individuals earning more than $ 452,700 and married couples earning more than $ 509,300 would increase their marginal tax rate from 37% to 39.6% in 2022 due to tax changes in the American Families Plan proposed by President Joe Biden, one confirmed White House official told CNBC Make It Thursday.
Axios reported the income thresholds for the tax hike for the first time on Thursday. Previously, Biden had said that only those in the top 1% would see an increase, but did not offer any specific income thresholds.
The official says this fulfills Biden’s promise not to levy taxes on individuals or families who earn less than $ 400,000 a year. However, up to this point the president had been vague as to whether or not his promise would apply to individuals or to couples as well. Under this plan, each partner could earn less than $ 400,000 but add an overall tax burden.
However, this would apply to less than 1% of US households, according to the latest data from the IRS.
The change would bring the peak marginal rate back to pre-2017 levels, when it was lowered by changes to former President Donald Trump’s tax law.
Biden unveiled the $ 1.8 trillion plan for American families during his first joint address to Congress on Wednesday evening. The plan calls for increased investment to expand access to childcare and education.
In addition to raising the highest marginal tax rate from 37% to 39.6%, it calls for an increase in long-term capital gains taxes for those who earn more than $ 1 million a year, among other things.
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