We’ve been told repeatedly by Joe Biden that his mammoth spending extravaganza — the Build Back Better bill — isn’t going to cost the middle class a penny more in taxes, that it’s only going to hit those making over $400,000 — those evil people who should just pay more because Joe Biden says. As we pointed out before, even that promise about the $400,000 number was a bit of a bait and switch when you thought it meant individuals and then they later said it meant households.
But anyone who really believed the promise — particularly based on Biden’s track record for telling whoppers — you knew that they were bound for a rude awakening.
Well, here’s that rude awakening.
The non-partisan Tax Policy Center has now taken a look at the draft provision of the bill. They’re raising a red flag on it and saying that roughly 20 to 30 percent of middle-income households would pay additional taxes in 2022. That some low and middle-income households would be paying an additional $100 or less on average and households earning between $200,000 and $500,000 would pay an average of approximately $230 more per year if the plan is implemented.
While the Tax Policy Center says there would be other tax cuts that would be beneficial, that still breaks Biden’s pledge.
There’s also another part of the analysis that doesn’t exactly fit with the Democrats’ claim of hitting the highest earners because it actually gives a break to the wealthy. There’s a provision in the spending bill that would raise the state and local tax (SALT) deduction cap, which “would provide almost no benefit for middle-income households” while benefitting wealthy Americans.
“It would reduce their 2021 taxes by an average of only $20. Even those making between $175,000 and $250,000 would get a tax cut of just over $400 or about 0.2 percent of after-tax income. By contrast, the higher SALT cap would boost after-tax incomes by 1.2 percent for those making between about $370,000 and $870,000 (the 95th to 99th percentile),” the analysis found.
This is all based on the draft bill which is subject to change. But I also wonder about another aspect of it. As we previously reported, the price tag on the bill is actually going to be more than the Democrats ultimately claim because of various tricks they have built into the bill. I’m not sure how that would affect the Tax Policy Center’s assessment since they were just looking at the draft bill — they may not have picked up all the effects that this would ultimately hit us with, too, because of those tricks.
Another analysis by the Tax Foundation has found that the average top tax rate would then skyrocket to 57.4 percent, from the current 42.9 percent and making us the highest in the developed world. That’s crazy and needs to be swiftly rejected.
We’ll have to wait a bit more on the Congressional Budget Office to get their score on the bill.
Let’s hope that the moderate holdouts really understand the true cost of it all because the cost was certainly a huge sticking point for folks like Sen. Joe Manchin (D-WV) and Sen. Kyrsten Sinema (D-AZ).
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