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August 25, 2021

Biden Proposes $2.3 Trillion Tax Hike on 40% of Taxpayers

Mark Sullivan- Per Diem Plus
Mark W. Sullivan, EA
Mark is our transportation industry expert and has nearly two decades of experience advising clients on IRS accountable per diem programs. 
The Impact of the Biden Administration’s Tax Proposals by State and Congressional District


How much will your taxes increase?

The Biden administration has proposed $2.3 trillion in new taxes in its 2022 budget essentially undoing the significant tax cuts implemented by the 2017 Tax Cuts and Jobs Act. Under Biden's proposal taxes will increase for the 40% of taxpayers that paid income taxes in 2020 in roughly 96% of congressional districts. Residents of the District of Columbia, Massachusetts, Connecticut and New York will experience the largest average tax increases - $1,000 in 2022 alone. Taxpayers with kids living in Mississippi, Alabama, and Oklahoma should expect a tax cut of over $400 in 2022. However, by 2025 (after the next Presidential election) taxpaying residents of every state and the District of Columbia will see a tax increase.

Whether or not your taxes will increase depends on several factors 1) income source, self-employed or W-2 employee 2) the number of qualifying children you have, and 3) the state and congressional district you reside. Click HERE to to use the Tax Foundation interactive map to project tax changes by your state and district.

Phoenix vs. Nogales: An illustration of income redistribution

Arizona taxpayers residing in District 6 (Phoenix) on average earn $126,760 and can expect their taxes to increase $2,247.77. For comparison District 3 (Nogales) residents on average earn only $50,131 and will receive a significant tax cut of $1,407. In fact, the largest tax cuts on average per filer are in majority-Hispanic districts in California, Texas, and Arizona, with tax cuts exceeding $1,500 per filer in 2022. However, this is not a result of carve-out legislation but primarily to the expanded Child Tax Credit, Hispanic population density and predominance of the nuclear, Roman Catholic family in Hispanic culture.1

The 2017 TCJA cut taxes for the majority of Americans. Unfortunately, President Biden believes the 40% of Americans that paid income taxes in 2020 are not paying enough and has proposed $2.3 trillion in new taxes. Whether your income taxes will increase can be projected based your state of residence and congressional district.

About Per Diem Plus

The Per Diem Plus® is the only IRS-compliant mobile application that provides automatic trucker per diem and travel-related expense tracking for drivers, motor carriers and owner operators. Per Diem Plus was designed, developed and is managed in the USA.

This article was written by Mark W. Sullivan EA, Tax Counsel for Per Diem Plus, who has over a decade of experience advising trucking companies on per diem issues. Prior to starting a private practice in 1998, Mr. Sullivan was an Internal Revenue Officer with the New York, NY, Saint Louis, MO and Washington, D.C. offices of the Internal Revenue Service.  Questions? Contact Mark W. Sullivan, EA.

Copyright 2021 Per Diem Plus, LLC. Per Diem Plus proprietary software is the trademark of Per Diem Plus, LLC.®

Disclaimer: This article is for information purposes only and cannot be cited as precedent or relied upon in a tax dispute before the IRS.

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