Right after the 2020 election, one of the biggest questions for investors was how much of Joe Biden’s platform could actually become law with a narrowly divided Congress. Understanding what happened with those Biden policy proposals — and why — offers a useful, lasting lesson in how major policy changes move (or stall) in Washington, regardless of which party is in the White House.
A Quick Recap: Where Things Stood in 2020
Following the 2020 election, Democrats controlled the House while Republicans held the Senate. That divided Congress meant any Biden economic policies would need to clear specific legislative hurdles before becoming law — and some proposals would prove far more achievable than others.
Here’s how four major Biden tax proposals and policy priorities actually played out.
1. Repealing the 2017 Tax Cuts and Jobs Act
The proposal: Full repeal would have required House approval plus at least 51 Senate votes.
What happened: The Tax Cuts and Jobs Act (TCJA) was never repealed during the Biden administration. Its individual provisions remained in effect through Biden’s term, and in 2025 Congress passed new legislation extending most of the TCJA’s individual tax provisions rather than rolling them back.
2. Increasing Capital Gains Taxes
The proposal: Like the TCJA repeal, raising capital gains tax rates for high earners would have needed House approval and 51 Senate votes.
What happened: The Biden administration proposed raising the top capital gains rate to as high as 39.6% for those earning over $1 million, as part of the American Families Plan. That specific increase was never enacted into federal law, and the top capital gains rate remained at 20% (plus the existing 3.8% net investment income surtax) throughout Biden’s term.
Investors concerned about long-term growth may want to review our Best Strategies for Long-Term Stock Investments to ensure portfolios remain well-positioned regardless of which tax proposals are on the table in a given year.
3. Providing Additional Fiscal Stimulus
The proposal: New stimulus spending faced a higher bar, needing 60 Senate votes under normal rules — unless passed through budget reconciliation, which lowers the threshold to 51.
What happened: Using the budget reconciliation process, Democrats passed the $1.9 trillion American Rescue Plan in March 2021 with a simple Senate majority. This is a clear example of how the reconciliation process can allow significant fiscal legislation to pass even in a closely divided Congress.
4. Tariffs on China and Other Countries
The proposal: Because tariff authority largely rests with the executive branch, the president could adjust tariffs without needing new legislation.
What happened: The Biden administration kept most existing China tariffs in place and added new ones on specific sectors, such as electric vehicles and semiconductors, using existing executive authority rather than new legislation — consistent with how tariff policy typically moves.
The Bigger Lesson: How Policy Actually Moves
Looking back, the clearest pattern is procedural, not political:
- Simple-majority legislation (51 Senate votes) can pass but still requires House cooperation and party alignment.
- Reconciliation bills are the most reliable path for major fiscal legislation in a divided Congress, since they bypass the 60-vote filibuster threshold.
- Standard legislation requiring 60 Senate votes is the hardest to pass and often stalls without bipartisan support.
- Executive actions, like tariffs, can move forward without Congress at all.
This framework holds true regardless of which party controls the White House or Congress, which is why it’s worth understanding as Biden administration policies — and any future administration’s — proposals are debated.
Staying Informed Without Reacting Emotionally
Campaign proposals and enacted law are often two very different things. As this look back at Biden policy changes shows, the legislative process — not campaign rhetoric — ultimately determines which ideas become policy, and on what timeline.
If you have questions about how current or future policy proposals might affect your financial plan, please give us a call. We’d welcome the chance to hear your perspective and help you separate proposal from law.
Frequently Asked Questions
Did the Biden administration repeal the 2017 Tax Cuts and Jobs Act?
No. The TCJA remained in effect throughout Biden’s term. In 2025, Congress extended most of its individual tax provisions rather than repealing them.
Did capital gains taxes increase under Biden?
The Biden administration proposed raising the top capital gains rate to as high as 39.6% for high earners, but that increase was never enacted into federal law.
What is budget reconciliation, and why does it matter?
Budget reconciliation is a legislative process that allows certain fiscal bills to pass the Senate with a simple 51-vote majority instead of the standard 60 votes, making it a key tool for passing major spending or tax legislation in a divided Congress.
Can a president change tariffs without Congress?
Yes. Tariff policy is largely governed by executive authority, allowing a president to adjust tariffs on trading partners without new legislation.
