Does Joe Biden know how much ‘super rich’ Americans pay in taxes?

Joe Biden, ice cream in hand as so often, spoke out yesterday on Liz Truss’ tax reform disaster.

“I wasn’t the only one who thought it was a mistake,” Joe Biden said, sounding quite like the wise old man of world politics. “I think the idea of ​​cutting taxes for the super-rich at a time when… I don’t agree with the politics, but that’s up to Britain.”

That concession at the end is that the president realizes he’s just broken the normal rules of diplomacy – by giving his opinion on an ally’s domestic difficulties. But he just can’t help it.

Steerpike wonders, however, if Biden — who isn’t a pauper himself after enjoying his status after the Obama years — can remember what the highest income tax rate in the United States is.

Because Liz Truss’ proposal, had it been allowed, would still have made Britain a considerably less accommodating tax destination for the super rich than America currently is.

Let’s explain it, nice and clear to dear old Joe. Liz Truss had proposed cutting the top income tax rate – for people earning £150,000 or more a year – from 45% to 40%. In the United States, at federal level, the highest income tax rate is 37% for those earning $523,600 (about £470,000 at the current exchange rate). Someone earning the equivalent of £150,000 in America would only narrowly slip into the third highest federal tax bracket of 32%. If they managed to get rid of $4,000 of their income liability, they would only pay 24%.

Yes, Americans face more property and state taxes, but only three states have a personal income tax rate above 10%. Most states charge much less. A person earning $550,000 a year in Wyoming, for example, would pay around 33% in taxes.

So not only are there many more “super rich” Americans, but they pay considerably less tax as a percentage of their income than their wealthy British counterparts. It’s not very fashionable to say it, but Steerpike can’t help but wonder if these two points are related.

Biden probably forgot, but he proposed raising the top marginal tax rate in the United States — for those earning over $530,000, remember — to 39%. This would still leave the US federal rate below what Liz Truss proposed it to be for the UK.

Perhaps he should think less about Britain’s budget rates and more about the failure of his absurdly named Cut Inflation Act and the threat to his party in future terms – as less fortunate Americans struggle to meet the cost of living.

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