Under the tax plan from Democratic presidential nominee Joe Biden, people earning more than $400,000 a year could pay combined federal and state income taxes at rate of more than 62%. CNBC reported.
“On the income side, on the federal side, there are two basic increases that Biden is proposing. The first is a top rate going from 37 to 39.6%. And then you’ve got the payroll tax of 12.4% applying to income over $400,000,” CNBC’s Robert Frank said.
“So, half of that payroll tax is paid by employers, so you add those two changes together, and you get a new top federal rate of 45.8 percent. Then you add the net investment income tax and other provisions and you get a total top rate of 49.6%,” Frank said.
“Let’s go to the state side on top of that. If you live in California, that combined rate would go to 62.6%. New Jersey would be over 60%. New York state would jump to 58%. Not too bad, but New York City residents, would see a combined state and federal rate of just over 62%. Now, with tax increases being proposed both in New York and California, those rates would likely go even higher,” Frank said.