President Joe Biden addressed a joint session of Congress last Wednesday. During his speech, the president made a number of misleading and inaccurate statements. Here’s a breakdown of Biden’s falsehoods:
While discussing the state of the economy, Biden took a moment to criticize the tax cuts passed by his predecessor, saying: “Look, the big tax cut of 2017. Remember, it was supposed to pay for itself—that was how it was sold—and generate vast economic growth. Instead, it added $2 trillion to the deficit. It was a huge windfall for corporate America and those at the very top. Instead of using the tax saving to raise wages and invest in research and development, it poured billions of dollars into the pockets of C.E.O.s.”
The Congressional Budget Office did estimate that the Tax Cuts and Jobs Act of 2017 would add $1.9 trillion to the deficit over the next 10 years. But Biden is incorrect to say that the tax cuts helped only“corporate America and those at the very top.” The Tax Policy Center—a non-partisan think tank—found that while the tax cuts did benefit the wealthy, it “would reduce taxes on average for all income groups.” In fact, according to their analysis 80.4 percent of taxpayers experienced a tax cut thanks to the bill, with those in the lower quintile—with an income of less than $25,000—receiving an average cut of $60 (0.4 percent of after-tax income), in the middle quintile—$49,000 to $86,000—receiving an average cut of $900 (1.6 percent of after-tax income), and in the upper quintile—$308,000 to $733,000—receiving an average cut of $13,500 (4.1 percent of after-tax income). The Tax Policy Center’s report on the matter estimated that, “Taxpayers in the top 1 percent of the income distribution (those with income more than $733,000) would receive an average cut of $51,000,or 3.4 percent of after-tax income.” As Manhattan Institute senior fellow Brian Riedl has noted, this isn’t very surprising: Any broad tax reform is going to disproportionately affect the highest earners as they pay a larger share of their income in taxes and, consequently, a large percentage of tax revenue. Even as the rich benefited, so too did most other Americans. As the New York Timesreported in 2019, these projections bore out. “The vast majority of people did get a tax cut,” said Nathan Rigney, an analyst at H&R Block’s Tax Institute told the Times.
Biden further claimed: “Twenty million Americans lost their job in the pandemic, working- and middle-class Americans. At the same time, roughly 650 billionaires in America saw their net worth increase by more than $1 trillion, in the same exact period. Let me say it again: 650 people increased their wealth by more than $1 trillion during this pandemic and they’re now worth more than $4 trillion.” Biden is correct that 20 million Americans lost jobs at the pandemic’s worst point, though the job market has improved since then. But Biden’s claim about billionaire wealth is deeply misleading: while their wealth has increased during the pandemic, Biden fails to take into account the losses they took at the start of the pandemic. According to analysis by the Americans for Tax Fairness and Institute for Policy Studies, American billionaires’ wealth increased by $1 trillion from mid-March 2020. The stock market dropped by 944 points between February 20, 2020 and March 17, 2020. The estimate that produces the $1 trillion number begins on March 18, 2020. When looking at increases over the past two years instead of the past year, billionaire wealth has increased by $974 billion, an increase, certainly, but onespread out over a time period twice as long as Biden claimed.