If Joe Biden takes office in January---pending ongoing election litigation and recounts---he could indirectly give a boost to the Texas population. That's because Biden's tax plans are likely to result in more residents fleeing high-tax states for lower-tax states.
Biden has pledged to repeal the 2017 Trump tax cuts, although he later said he would only repeal the cuts for those making over $400,000 a year. Among his plans are a raise in the marginal income tax rate for those in the top brackets, a cap on itemized deductions for those above a certain income level, and changes to retirement savings. "People are really going to be in 'tax shock' in many states, if they make $400,000 or more, because that is what would trigger the additional taxes," says Richard Rosso, certified financial planner with RIAA Advisors. "You can also see why this would cause a mass exodus of people leaving high income tax states to come to places like Texas."
Of course, there's no guarantee Biden would get any or all of his tax plans through Congress, especially with Republicans likely still in control of the Senate. But regardless of who controls the White House or Congress, Rosso believes the biggest factor for taxpayers is the massive deficit spending exacerbated by the COVID-19 pandemic. "Because of the burden and the debt we've taken on, it's inevitable taxes are going up, regardless of the administration," says Rosso. "So you have a lot of high net worth earners revisiting their future tax plans and their estate tax plans."
Whether Joe Biden, Donald Trump or anyone else is in the oval office, Congress will eventually have to take action to prevent a tax hike on Americans. "Keep in mind, these current favorable tax rates that we have right now will sunset at the end of 2025," says Rosso. "So at the beginning of 2026, we revert back to the tax brackets from before."