CNBC's Ylan Mui joins 'Closing Bell' to discuss presidential candidate Joe Biden's tax plan.
Former Vice President Joe Biden’s plan to raise taxes on corporations and wealthy households would increase federal revenue by $4 trillion over the next decade, according to a new analysis by the nonpartisan Tax Policy Center.
Biden has surged to front-runner status in the Democratic presidential primary after winning at least 10 states on Super Tuesday and racking up endorsements from key rivals. Investors cheered his success on Wednesday, sending the Dow Jones Industrial Average up by 4.5%, or 1,173 points -- the second-largest point gain on record.
But while Wall Street may view Biden as more moderate than self-declared democratic socialist Sen. Bernie Sanders, investors would still face dramatic tax increases under his proposals, including higher rates on both ordinary income and capital gains. Corporations would also be subject to a significant rise in taxes at home and overseas.
“The proposal is very progressive,” said Gordon Mermin, senior research associate at TPC.
The Biden campaign did not immediately respond to a request for comment.
The $4 trillion in new revenue is roughly evenly split between increases in individual and business taxes. For households, restoring a top tax rate of 39.6%, up from 37% now, would generate about $143 billion over a decade, according to TPC. Capital gains would be taxed at the same rate as ordinary income for those earning more than $1 million, adding another $448 billion in federal revenue.
But the biggest tax increase on households would be the application of the payroll tax to income over $400,000. That provision alone would raise $962 billion over a decade, TPC found.
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