Edward J. McCaffery is Robert C. Packard trustee chair in law and a professor of law, economics and political science at the University of Southern California. He is the author of “Fair Not Flat: How to Make the Tax System Better and Simpler” and founder of the People’s Tax Page. The opinions expressed in this commentary are his own. View more opinion at CNN.
(CNN)Monday, May 17, was 2021 Tax Day in America. That is not normal, a reminder of the lingering pandemic that moved the IRS to extend its tax filing date a month from its usual April 15. But spring is in the air and there are signs of better days ahead. Masks are coming off and presidents are once again sharing their tax returns with the public.
There is not much headline news in the details of Joe and Jill Biden’s taxes. The Bidens filed a joint return for the year 2020 showing adjusted gross income of $607,336. They paid $157,414 in federal income tax for an effective rate of 25.9%. These figures are down from 2019, when the Bidens reported taxable income of $944,737 and paid $299,346 in taxes, a 31% rate. While the Bidens continue to earn well above the median American household income of $68,400 in 2020, they also continue to pay ordinary tax rates on “ordinary” income that comes primarily from wages, speaker fees and royalties. Nothing fancy or exotic here.
But the very publication of the Bidens’ tax returns is another sign that normality is returning after the once-in-a-century scourge of the coronavirus pandemic and the adamant refusal by Biden’s predecessor, Donald J. Trump, to release any tax return information — a multi-year saga that ended only when the Supreme Court helped order Trump to release his taxes to the Manhattan District Attorney in the context of a criminal investigation into his and the Trump Organization’s finances. Every president since Richard Nixon had publicly released their tax returns — or at least a summary of them — until Trump, whose personal normal seems to include breaking all social norms that might somehow inconvenience him.
The Biden tax payments reflect another stark contrast to their predecessor, who, according to a New York Times investigation, typically paid no federal income taxes at all, despite being, in his own words, “really rich.”
In a further sign of a return to better days, we also now have a president who is ready, willing and able to set aside narrow self-interest and to raise taxes on himself, as part of a household earning more than $400,000. Biden has proposed raising the highest ordinary tax rate back to 39.6%, from the 37% set by the 2017 Trump tax cuts. This move alone would add over $5,000 to the Biden household tax bill. Again, this is a pleasant contrast with the former guy, who famously told his friends at Mar-a-Lago that “You all just got a lot richer” after he signed his biggest legislative achievement, the tax bill, into law. The Trump administration, ever-shameless, even included a tax break for the top 1% in its Covid-relief bill, of all places.
With filing day now behind us, the tax-related news brought one more blast of a hopeful change in the weather. Vice President Kamala Harris and second gentleman Douglas Emhoff also released a summary of their tax return. The couple reported $1,695,225 in adjusted gross income and paid $621,893 in taxes. So not only does America have its first woman vice president, and our first woman of color vice president: we also have a woman of color vice president who last year made more than her White male boss.
How pleasant It is to be enjoying a hopeful spring again.
