As he seeks reelection, President Biden is trying to sell voters on his approach to the economy and create a contrast with his likely opponent in 2024, former President Donald J. Trump.
During Mr. Biden’s term, the economy grew 3.1 percent from the end of 2022 to the end of 2023. The inflation rate has fallen significantly since its peak in the summer of 2022 (although it fell less sharply than economists had expected in January). And the job growth continues.
However, at recent public and campaign events, Mr. Biden has made some misleading statements about the economy, jobs and taxes.
Here’s a fact check.
WHAT WAS SAID
“We have a thousand billionaires in America now. Do you know what your average tax rate is – federal tax? 8.2 percent.”
– during a campaign event in late January
This is misleading. Mr. Biden was referring to a White House study that aimed to use a “more comprehensive measure of income” than the way income is currently assessed. In other words, it offered a hypothesis about what the interest rate would be if the law were different.
More specifically, the study published in 2021 took into account gains from unsold stocks. By law, these gains are not taxed until the asset is sold. The report estimated the average federal income tax rate paid by the 400 wealthiest families in the United States at 8.2 percent.
While there is debate about whether this type of income should be included in the law, presenting that 8.2 figure without explanation leaves room for false impressions, said Garrett Watson, a senior policy analyst at the right-leaning Tax Foundation.
For example, the public could then incorrectly compare this 8.2 percent to other average federal income tax rates. To make a more accurate comparison, for example, with a middle-income person’s tax rate, their unrealized gains would also need to be included in the same way, such as from appreciation in the value of investment accounts or homes, Mr Watson said.
(The Tax Foundation has also argued that the White House analysis should also take corporate taxes into account, since many company founders may retain stock in their companies, but the companies are taxed on their profits each year.)
Under the law, the top 1 percent of U.S. earners are now estimated to pay an average federal income tax rate of more than 20 percent, according to a November Treasury Department analysis. An IRS report that looked specifically at the top 400 income tax returns found that these taxpayers paid an average income tax rate of about 23 percent in 2014.
The White House defended Mr. Biden’s use of the 8.2 percent figure.
“Most Americans agree that if a billionaire’s wealth increases by millions of dollars in a year, it is income,” Michael Kikukawa, a White House spokesman, said in a statement. “And economists across the political spectrum, including the American Enterprise Institute and Congress’ bipartisan Joint Committee on Taxation, agree that a person’s income is equal to the change in their net worth. By quantifying the income that the richest Americans earn from unrealized capital gains, the CEA-OMB analysis applies this standard definition of effective tax rates, contributing to our understanding of how low billionaires’ tax rates are.”
WHAT WAS SAID
“I signed the CHIPS and Science Act, which has attracted $640 billion in investment from private companies that are building factories, bringing jobs back to America.”
– during an event this month
INCORRECT. Estimates of the private investment spurred by the CHIPS and Science Act, which gave billions to the chip industry, do not exceed $640 billion. In some ways, it’s just a fraction of that: one estimate from the Semiconductor Industry Association puts it at about $220 billion.
Mr. Biden signed the law in August 2022, which provided about $52 billion in subsidies and tax credits for manufacturers of semiconductors – chips used in electronics – to open or expand in the United States. In addition, the company invested heavily in research into artificial intelligence, quantum computing and other technologies.
Mr. Biden was referring to a White House estimate of private investment in various industries over the course of his presidency, not only in response to the CHIPS legislation but also as a result of the Inflation Reduction Act and the bipartisan $1 trillion infrastructure bill. Dollar.
According to this estimate, there was $649 billion in private investment across several 21st century industries, including clean energy and electric vehicles. The White House says it arrived at that figure by calculating projects announced in public sources.
WHAT WAS SAID
“And let’s get something straight. Trump talks about putting checks in his pockets. But in 2021, when I came into office, I was the guy who sent each of you those $1,400 checks.”
– during a campaign event in late January
This requires context. Both Mr. Biden and Mr. Trump have signed legislation providing stimulus payments to Americans as the United States struggles with the coronavirus.
In March 2020, Mr. Trump signed a $2 trillion measure called the CARES Act that provided payments of $1,200 per person and an additional $500 per child. Months later, in December 2020, Mr. Trump signed a stimulus package that included $600 checks and an additional $600 per child. (He had pushed to increase the second round of payments to $2,000.)
Two months after taking office, in March 2021, Mr. Biden signed a $1.9 trillion economic relief package called the American Rescue Plan Act, which provided payments of $1,400 per person and an additional $1,400 per child .
WHAT WAS SAID
“The only president other than Donald Trump to lose jobs during one term was Herbert Hoover.”
– during a campaign event in late January
This requires context. Mr Biden is correct that Mr Trump ended his term with a negative employment record – the only president to do so after World War II – but omits that this was due to the coronavirus pandemic.
As of January 2017, when Mr. Trump was inaugurated, there were 145.6 million jobs, according to the Bureau of Labor Statistics. When he left in January 2021, there were 142.9 million jobs. That’s a decline of 2.7 million jobs or 1.9 percent.
But before the pandemic hit, Mr. Trump had a positive employment record. The number of jobs increased from 145.6 million jobs in January 2017 to 152 million jobs in January 2020 – an increase of 6.4 million jobs or 4.4 percent.
About half of the nearly 22 million jobs lost in early 2020 were restored before Mr. Trump left office.
The same Bureau of Labor Statistics data goes back only to 1939, a few years after Mr. Hoover left the White House in 1933. But Mr. Hoover was president at the start of the Great Depression, and when he left office, nearly a quarter of the labor force was unemployed.
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2024-02-22 13:58:37
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