President Joe Biden’s massive social welfare and climate change bill – his Build Back America plan – would raise taxes on the lower- and middle-classes while giving lucrative breaks for the super-wealthy. That’s according to a new study by the left-leaning Tax Policy Center (TPC), a project of the Brookings Institution and the Urban Institute. The report offers an in-depth analysis of the tax increases that House Democrats want to see included in the multi-trillion-dollar legislation.
In addition, the Cato Institute’s director of tax policy studies warned the Washington Times that the plethora of new taxes would complicate the tax code, making tax avoidance easier for the super-wealthy.
- Gives wealthy Americans tax credits: $222 billion in “green energy” tax credits will be given to those who can afford expensive electric vehicles and other “green” innovative products (page 1832).
- Tax benefits for the top 1%: The bill will possibly lift the State and Local Tax (SALT) deduction cap meaning many of the top 1% wealthiest Americans would pay less in taxes.
- Tax credit for wealthy donors who give to woke universities: The bill creates a new tax credit program that provides tax credits worth 40% of cash contributions that are made to university research programs (page 2094).
- Increases taxes on Americans at every income level: $2 trillion in tax hikes will fall on those making under $400,000 per year, contrary to what the White House says. Individuals at all income levels will be affected (Ways and Means GOP).
- Lowers wages for working families: The corporate tax rate will increase by 5.5%, meaning American companies will face one of the highest tax burdens in the world. According to analysis, two-thirds of this tax hike will fall on lower- and middle-income taxpayers (page 2110).
- Imposes crushing taxes on small businesses: Guts the Tax Cuts and Jobs Act small business deductions that reduced pass-through entity taxes to keep them comparable to taxes imposed on corporations (page 2235). It hammers small businesses that file as individual tax earners with the 39.6% rate (page 2221) and Obamacare’s 3.8% tax on net investment income.
Chris Edwards, director of tax policy studies at the Cato Institute, said the plan includes spending increases of $1.85 trillion over 10 years. Still, that figure relies on “gimmicky accounting,” and the actual cost would be higher.