Biden's Plan to Tax the Rich Faces Roadblocks
The president-elect is unlikely to get much on his wish list, with the Democratic majority in the House narrowed and the GOP likely keeping control of the Senate.


President-Elect Joe Biden has big plans for tax changes. He campaigned on tax increases for corporations and individuals making over $400,000, estate tax hikes, and tax cuts for lower- and moderate-income people. But he's unlikely to get much on his wish list, with the Democratic majority in the House narrowed and Republicans likely keeping control of the Senate. This means no tax hikes on the rich.
Some say the legislative path will be easier for Biden if both Georgia Senate runoff races in early January result in Democratic victories. But even if that occurs, Biden is expected to wait to propose tax increases. Priority number one is COVID-19. Plus, raising taxes before the economy fully recovers is risky. It would also be hard to get higher taxes approved in a deeply divided Senate.
There is one exception, though. You might see some targeted tax hikes in an infrastructure bill to help defray the cost.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Some Tax Changes are Possible
The chances of tax cuts for lower- and middle-income Americans are somewhat better, especially if the economy's recovery continues to leave these people behind. Biden wants to expand the child and dependent care credit and refundable child credit, both of which have bipartisan support. He also hopes to create a new tax credit for people who provide long-term care to their elderly relatives and to give a new tax break to first-time homebuyers and renters.
Among items that have a decent shot of passage early in the Biden administration:
- More stimulus, provided this doesn't pass during the lame-duck session;
- Expanding the employee retention tax credit;
- Reviving Paycheck Protection Program loans;
- Tax breaks for businesses to help cover the cost of making their premises safe for workers and employees;
- Tax incentives for IRA owners and 401(k) participants, along with proposals to encourage more employers to offer workplace retirement plans;
- Temporary tax extenders that expire at the end of 2020; and
- Tax breaks to encourage businesses to produce critical products in the U.S.
Tax Cuts and Jobs Act Provisions
Republicans will put pressure on Biden to make the 2017 tax reform law permanent. Most provisions affecting individuals expire after 2025, including the income tax rates, higher standard deductions and child credits, cutback in itemized deductions, 20% write-off for pass-through income, and higher estate tax exemptions. But some key business tax provisions will start to expire during Biden's term in office, such as first-year 100% bonus depreciation, which begins to phase out after 2022.
Biden will be in no hurry to act here. In fact, he wants to reverse the cuts that favor individuals making over $400,000. However, he might be more open to exploring expiring business tax changes, especially if he can get something in return.
What About Health Care Taxes?
Health care is vital to Biden. Shoring up Obamacare, adding a public option similar to Medicare, and increasing the health premium tax credit for individuals who buy health insurance through a government exchange are all on his list of to-dos. But expanding Obamacare would not get the needed Republican support.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to kiplinger.com and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.
-
Ten Cheapest Places to Live in Tennessee
Property Tax Moving to Tennessee might be within your reach. Homeowners in these counties pay some of the lowest property tax bills in the state.
-
I'm 60 with $2.8 million saved. I'm miserable working, but I need health insurance until Medicare kicks in. What are my options?
The 'health care desert' is real. We ask financial experts for advice.
-
Stay NJ Could Give You $6,500: The Deadline You Can't Miss
Property Taxes New Jersey has a new property tax relief program for 2025. But the application deadline is fast approaching.
-
The Fall Garden Tax? What to Plant and How to Prepare
Tax Tips Fall gardening could increase your taxes this season. Here’s what to know while planting in 2025.
-
Texas Sales Tax-Free Weekend 2025
Tax Holiday Here's what you needed to know about the Texas sales tax holiday.
-
Retirees Should Watch These Four Key Tax Changes in 2025
Tax Changes This year brings key tax changes that could affect your retirement taxes and income.
-
The Most Tax-Friendly State for Retirement in 2025: Here It Is
Retirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Five Ways Trump’s 2025 Tax Bill Could Boost Your Tax Refund (or Shrink It)
Tax Refunds The tax code is changing again, and if you’re filing for 2025, Trump’s ‘big beautiful’ bill could mean a bigger refund, a smaller one or something in between next year. Here are five ways the new law could impact your bottom line.
-
New SALT Deduction Could Put Thousands Back in California Homeowners’ Pockets
Tax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
Money for Your Kids? Three Ways Trump's ‘Big Beautiful Bill’ Impacts Your Child's Finances
Tax Tips The Trump tax bill could help your child with future education and homebuying costs. Here’s how.