Biden promised no new taxes on those earning $400k or less out on the campaign trail, a promise quickly contradicted by White House Press Secretary Jen Psaki, who claimed that this was referring to household income (and thus the promise was no new taxes on individuals earning $200k or less).
Over a year later it’s still unclear what income threshold Biden’s “no tax” pledge actually applied to, but regardless, all Americans are now paying the “inflation tax” as the rate of price increases surges to the highest levels in four decades, far faster than wages are keeping pace with.
According to an analysis from Bloomberg:
Inflation will mean the average U.S. household has to spend an extra $5,200 this year ($433 per month) compared to last year for the same consumption basket, according estimates by Bloomberg Economics. The excess savings built up over the pandemic, and increases in wages, will cushion those costs, and allow spending to expand at a decent pace this year. But accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth.
The “inflation tax” by income quintile is as follows:
Matt Palumbo is the author of The Man Behind the Curtain: Inside the Secret Network of George Soros
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