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Grassley: Voters should be skeptical of Biden's pledge to not raise middle class taxes

Grassley: Voters should be skeptical of Biden's pledge to not raise middle class taxes
© Bonnie Cash

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyAlabama Republican becomes third House member to test positive for COVID-19 this week The Hill's Morning Report - Presented by Mastercard - Dem leaders back smaller COVID-19 relief bill as pandemic escalates Republican senators urge Trump to dodge pardon controversies MORE (R-Iowa) on Wednesday criticized Democratic presidential nominee Joe BidenJoe BidenAppeals court OKs White House diverting military funding to border wall construction Federal student loan payment suspension extended another month Pentagon: Tentative meeting between spy agencies, Biden transition set for early next week MORE's tax plan, arguing that there are reasons to be skeptical of Biden's claim that he won't raise taxes on people making under $400,000 annually.

"Who can blame taxpayers for being skeptical when Mr. Biden says that he won’t raise their taxes? Every indication is that he will raise taxes on people below $400,000 a year income," Grassley said in a speech on the Senate floor.

Grassley's speech comes less than two weeks before Election Day. Several recent polls have shown a close race between Biden and President TrumpDonald John TrumpAppeals court OKs White House diverting military funding to border wall construction Pentagon: Tentative meeting between spy agencies, Biden transition set for early next week Conservative policy director calls Section 230 repeal an 'existential threat' for tech MORE in Grassley's home state of Iowa, while Biden has led in national polls and surveys in several battleground states.

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Biden has offered a host of tax proposals aimed at raising taxes on high-income individuals and corporations, as well as several proposals aimed at providing tax relief to lower- and middle-income households. He has repeatedly said that taxpayers with income under $400,000 won't see their taxes go up.

Recent analyses from the Urban-Brookings Tax Policy Center (TPC) and the American Enterprise Institute (AEI) have found that lower- and middle-income taxpayers on average would see tax cuts in the near term under Biden's plan because of his proposal to temporarily expand the child tax credit. But the analyses find that at least some income groups under $400,000 would see slightly higher tax burdens once the child tax credit expansion expires.

Grassley argued that there are several reasons to doubt Biden's pledge. He said that former President Obama had pledged not to raise taxes on individuals making under $200,000 and married couples making under $250,000, but then broke that promise with taxes that were used to pay for ObamaCare.

Grassley also argued that business tax increases would get passed along to workers in the form of lower wages. The TPC and AEI analyses estimate that at least some income groups under $400,000 would see increases in their tax burdens in the long-run because of Biden's proposed business tax increases.

"With the bulk of Mr. Biden’s tax agenda targeted at hiking taxes on capital, the consequences then will be felt throughout the economy in the form of lower wages, fewer jobs and slower economic growth," Grassley said.

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The Biden campaign has raised questions about the idea that part of the corporate tax is ultimately paid by workers.

Additionally, Grassley said that Biden's tax plan doesn't include a proposal to make permanent or extend the middle-class tax cuts for individuals in Trump's 2017 tax law. Those cuts are set to expire after 2025. The 2017 tax law's individual provisions have been estimated to reduce taxes for all income groups on average in the near-term.

"A top priority for President Trump and the Congressional Republicans has been to make permanent the middle-class tax cuts that were enacted in 2017," Grassley said.