Senate Republicans have released a briefing on the Democrats reconciliation bill. Based on the data in the report, it is hard to figure out which is worse, Biden’s lies about the bill or the establishment media’s refusal to report on and be outraged by the numbers.
As Senate Republican Leader Mitch McConnell explained, “The bill that Democrats are writing behind closed doors would hike taxes on the American people by an estimated $1.5 trillion. A trillion and a half dollars in tax increases. Democrats have already turned a strong economy into a shaky economy. Now they want to add the biggest tax hikes in a generation. … Nonpartisan experts have confirmed the Democrats’ bill would completely break the President’s promise not to raise ‘a single penny more’ in taxes on middle-class households. … [I]n the midst of all these tax hikes, Democrats from New York, New Jersey, and California have managed to include a massive tax cut for wealthy people who choose to reside in high-tax blue states. This bonanza for blue-state millionaires and billionaires would cost almost $300 billion on its own. Even the Washington Post could only marvel at the audacity. Here’s their headline: ‘The second-biggest program in the Democrats’ spending plan gives billions to the rich.’ In fact, even though Democrats want to hike taxes by $1.5 trillion, their bill still manages to give a net tax cut to 89% of people making between $500,000 and a million dollars, and 69% of households making over a million. A huge blow to American competitiveness. Job-killing tax hikes. But Democrats make sure to look out for the ultra-wealthy on the coasts. A supermajority of them get tax cuts. I’m almost impressed our colleagues have found a way to be this out of touch.” (Sen. McConnell, Floor Remarks, 11/18/2021)
Under Democrats’ Mammoth Spending Bill, Two-Thirds Of Millionaires Would See A Significant Tax Cut Next Year
“Most millionaires would get a tax cut under House Democrats’ reconciliation plan, according to a new analysis that’s sure to get lawmakers’ attention. About two-thirds of people making more than $1 million would see a tax cut next year averaging $16,800, the Tax Policy Center said Thursday. That’s primarily because Democrats are proposing to lift to $80,000, from $10,000, an annual cap on state and local tax deductions.” (“Most Millionaires Could Get Tax Cut Under House Dems' Tax Plan,” Politico, 11/11/2021)
JASON FURMAN, Former Obama Administration Council of Economic Advisors Chairman: “Congress adding a SALT expansion to Build Back Better is even worse than I had feared. Under the bill: 36% of those making up to $200,000 get a tax cut ($1,994 average tax cut) 66% of those making over $1 million get a tax cut ($16,760 average tax cut)” (Jason Furman, @JasonFurman, Twitter, 11/11/2021)
COMMITTEE FOR A RESPONSIBLE BUDGET: “This week, the Tax Policy Center (TPC) released new estimates for how the Build Back Better Act will affect the tax burden of individuals at various points along the income spectrum. … However, because Build Back Better would raise the $10,000 cap on the state and local tax (SALT) deduction, it would cut taxes for the majority of very wealthy families as well. According to TPC, two-thirds of households making over $1 million per year would receive a tax cut under the Build Back Better Act. More than three-quarters of households earning between $500,000 and $1 million would also receive a tax cut, as would two-thirds of those earning between $200,000 and $500,000.” (“Two-Thirds of Millionaires Get a Tax Cut Under Build Back Better, Due to SALT Relief,” Committee for a Responsible Federal Budget, 11/12/2021)
The Joint Committee On Taxation Confirms Democrats’ Spending Bill Would Give More Than Two-Thirds Of Millionaires A Tax Cut Next Year
“A new analysis from the Joint Committee on Taxation found that the SALT provisions would give two-thirds of people making more than a million dollars a tax cut.” (“Democratic Heartburn Grows Over Middle Class Tax Provision That Also Benefits The Wealthy,” NBC News, 11/18/2021)
According to the Joint Committee on Taxation, 69 percent of taxpayers earning over $1 million would receive a tax cut in 2022. (Joint Committee on Taxation, 11/15/2021)
Nearly 90 percent of taxpayers earning between $500,000 and $1 million would receive a tax cut in 2022. (Joint Committee on Taxation, 11/15/2021)
Meanwhile, Democrats Would Raise Taxes On Middle-Income Earners, Destroying Biden’s Pledge Not To Raise ‘A Single Penny’ More In Taxes From Anyone Making Less Than $400,000
HOWARD GLECKMAN, Senior Fellow in the Urban-Brookings Tax Policy Center: “Taking into account all major tax provisions, roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022.” (“Build Back Better 2.0 Still Raises Taxes For High Income Households And Reduces Them For Others,” Tax Policy Center, 11/11/2021)
According to the Joint Committee on Taxation, more taxpayers earning between $50,000 and $75,000 will receive a tax increase than a tax cut in 2023. (Joint Committee on Taxation, 11/15/2021)
According to the Joint Committee on Taxation, more taxpayers earning between $75,000 and $100,000 will receive a tax increase than a tax cut in 2023. (Joint Committee on Taxation, 11/15/2021)
SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “This analysis proves that any suggestion this bill constitutes a broad-based middle class tax cut is clearly false… The analysis also documents that the Administration’s pledge that ‘no one with income below $400,000 will see their taxes go up’ is not true. Budget gimmicks used in the bill create a structure that substantially frontloads deficit-financed tax relief into the first year, pouring gas onto a currently accelerating inflationary fire. Further, aspirations for tax relief to be extended in future years, without specifying which additional new tax increases would pay for it, promise to dramatically worsen our debt crisis and lead to longer-term inflation pressures.” (Sen. Crapo, Press Release, 11/16/2021)
Yet President Biden Is Still Claiming His Spending Bill ‘Does Not Raise A Single Penny In Tax For Anyone Making Less Than $400,000 A Year’
PRESIDENT JOE BIDEN: “I’m confident that the House will pass this bill, and then we’re going to have to pass it in the Senate. And it’s fully paid for. It will reduce the deficit over the long term, according to leading economists in the world. And again, no one earning less than $400,000 will pay a single penny more in federal taxes.” (President Biden, Remarks, 11/15/2021)
PRESIDENT BIDEN: “And so — and keep my campaign commitment: It does not raise a single penny in tax for anyone making less than $400,000 a year. Say it again: Folks, no matter what they tell you, you’re going to find out this will not affect your taxes one little bit in having to pay a penny more if you make less than $400,000 a year.” (President Biden, Remarks, 11/06/2021)
Raising The SALT Deduction Cap To Give Millionaires Tax Cuts Is The Second-Most Expensive Item In Democrats’ Multitrillion Dollar Spending Plan
“The measure would allow households to increase their deduction from state and local taxes from $10,000 to $80,000 through 2026, and then impose a new deduction cap through 2031. It’s the second-most expensive item in the legislation over the next five years, more costly than establishing a paid family and medical leave program, and nearly twice as expensive as funding home-medical services for the elderly and disabled, according to an analysis by the Committee for a Responsible Federal Budget.” (“The Second-Biggest Program In The Democrats’ Budget Gives Billions To The Rich,” The Washington Post, 11/16/2021)
“The rich are poised to gain more from the SALT cap increase than lower-income people are from other elements of the bill, such as the child tax credit. According to the CRFB, a household in D.C. making $1 million a year would benefit 10 times as much from the SALT cap as a middle-class household would from extending the increased child tax credit for one year, which would provide an extra $1,600 for children under 6 and an extra $1,000 for older children.” (“The Second-Biggest Program In The Democrats’ Budget Gives Billions To The Rich,” The Washington Post, 11/16/2021)
“Raising the SALT cap would more than offset other tax increases for the wealthy in 2022, according to a report from the Tax Foundation.” (“The Second-Biggest Program In The Democrats’ Budget Gives Billions To The Rich,” The Washington Post, 11/16/2021)
THE TAX FOUNDATION: “In 2022, however, the tax increases on high earners are more than offset by a more generous SALT deduction cap, which mostly accrues to households with higher incomes.” (“Build Back Better Act: Details & Analysis of Tax Provisions in the $1.75 Trillion Reconciliation Bill,” The Tax Foundation, 11/05/2021)
According To The Committee For A Responsible Budget: ‘the benefit of salt cap relief for millionaires under build back better will be nearly 50 times as large as the benefit of the expanded child tax credits for a typical family over five years’
COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: “The current version of the Build Back Better Act under consideration in the House would increase the state and local tax (SALT) deduction cap from $10,000 to $80,000 through 2026 while increasing the child tax credit from $2,000 per child to $3,000 per child (and $3,600 per child under 6) for 2022 and make it fully refundable. As we have pointed out many times, there is no such thing as progressive SALT cap relief. Roughly 98 percent of the benefit from the increase would accrue to those making more than $100,000 per year, with more than 80 percent going to those making over $200,000.” (“Build Back Better SALT Gains for the Rich Eclipse Child Credit Boost,” Committee for a Responsible Federal Budget, 11/09/2021)
“One way to illustrate this distribution is to compare the benefit of SALT cap relief to the benefit of the expanded child tax credit. Under the current House bill, most high-income households will receive more tax cuts from SALT cap relief than low-income and middle-class households will receive from the expanded child tax credit. The below graph illustrates the tax benefit of a family of four in Washington, D.C. next year. We find that a household making $1 million per year will receive ten times as much from SALT cap relief as a middle-class family will receive from the child tax credit expansion. … In other words, the benefit of SALT cap relief for millionaires under Build Back Better will be nearly 50 times as large as the benefit of the expanded child tax credits for a typical family over five years.” (“Build Back Better SALT Gains for the Rich Eclipse Child Credit Boost,” Committee for a Responsible Federal Budget, 11/09/2021)
Build Back Better
Joe Biden administration
tax increases
reconciliation
SALT tax
Jason Furman
Democrat spending bill