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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 GrassleyChuck GrassleyNumber of migrants detained at southern border reaches 15-year high: reports Grassley, Cornyn push for Senate border hearing The Hill's Morning Report - GOP pounces on Biden's infrastructure plan MORE (R-Iowa) on Wednesday criticized Democratic presidential nominee Joe BidenJoe BidenBiden eyes bigger US role in global vaccination efforts Trump says GOP will take White House in 2024 in prepared speech Kemp: Pulling All-Star game out of Atlanta will hurt business owners of color 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 TrumpHarry Reid reacts to Boehner book excerpt: 'We didn't mince words' Man arrested for allegedly threatening to stab undercover Asian officer in NYC Trump says GOP will take White House in 2024 in prepared speech 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.