At a drive-in campaign rally last week at a union hall in Toledo, Ohio, Joseph R. Biden Jr. asked those in the audience to beep their car horns if they earned more than $400,000 a year. “You’re going to get a tax raise,” he declared as some cars honked.
Mr. Biden, the Democratic presidential nominee, has proposed sweeping tax increases on high earners and large corporations, which various independent forecasting models project would raise around $2.5 trillion or more in revenue over a decade. In a rare case of agreement, both Mr. Biden and his incumbent opponent, President Trump, have sought to elevate those tax plans in the closing weeks of the campaign.
The competing strategies reflect diverging views of how voters respond to tax increases — and of how those increases will affect a fragile economic recovery in the years to come.
Mr. Biden and his advisers say tax increases now would accelerate growth by funding a stream of spending proposals that would help the economy, like infrastructure improvement and investments in clean energy. At least one independent study supports those claims, finding that Mr. Biden’s full suite of plans would bolster economic growth. Researchers at some conservative think tanks project that his tax increases would exert only a modest drag on the economy.
Mr. Trump and congressional Republicans say otherwise, arguing that tax increases of any kind threaten to derail the rebound from recession. “If he comes along and raises rates, all those companies that are coming in, they will leave the U.S. so fast your head will spin,” the president said on Thursday during an NBC town hall event. “We can’t let that happen.”