Joe Biden's proposal to hike taxes on corporations and wealthy Americans could dramatically shrink the nation's economy and destroy millions of jobs, according to new projections from President Trump's former chief economist.
The Democratic presidential candidate's plan would increase the tax rates on capital and labor income, ultimately resulting in about 3 million fewer full-time employees and reducing the nation's GDP by about 4% to 5%, according to a draft of a soon-to-be-published report by Casey Mulligan, who previously served as chief economist of the White House Council of Economic Advisers.
That translates into a loss of roughly $8,000 per household per year, according to the study, a copy of which was shared with FOX Business.
"Although Biden asserts that his plan 'rewards work,' economic analysis of the plan belies that claim," Mulligan, an economist at the University of Chicago, wrote. "The tax components of Biden’s agenda increase average marginal tax rates on both labor and capital income."
The study was first reported by the Washington Examiner.
The former vice president has unveiled a multitrillion-dollar agenda that would be funded in large part by higher taxes on wealthy U.S. households – which he describes as anyone earning more than $400,000 annually – and corporations. That includes higher income tax rates, an expansion of the payroll tax for Social Security, new tax credits and fewer deductions.
Almost 80% of the tax increases backed by Biden would land on the top 1% of earners in the U.S., according to a recent projection from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School.
Biden has pledged to hike the corporate tax rate from 21% to 28% on "day one" if he wins the Nov. 3 election, regardless of the nation's unemployment rate.
"I'd make the changes on the corporate taxes on day one," he told CNN's Jake Tapper in mid-September. "And the reason I'd make the changes to corporate taxes, it can raise $1.3 trillion if they just started paying 28% instead of 21%. What are they doing? They're not hiring more people."
On top of that, Biden has promised to roll back other changes made by Trump in the 2017 Tax Cuts and Jobs Act, including restoring the top individual income tax bracket to 39.6% from 37% for those earning more than $400,000 annually.
That would result in an average tax increase of nearly $300,000 for households in the top 1% of the country, compared with a $260 per year increase for those in the middle, according to the Tax Policy Center.
Biden has also said he will subject wages above $400,000 to the 12.4% payroll tax, creating a so-called "donut hole" for earnings between $137,700 and $400,000, which would be exempt.
Other analyses of Biden's tax plans are more optimistic: Findings from the Penn Wharton Budget Model estimate it would cause the nation's GDP to shrink by 0.4% in 2030, and increase by 0.8% in 2050.
And a report released last week by Moody's Analytics found that Biden would create roughly 7 million more jobs than Trump if he wins the November election.