Despite endless claims of a “zero dollar price tag” on Joe Biden’s “Build Back Better” framework, tax experts and economists are singing a different tune.
Not only will Biden’s spending package costs the American taxpayer trillions, but the strain it’ll place on the national debt will wreak havoc on future generations of Americans who will be left with the monstrous debt. Not to mention the growing rate of inflation, which will be compounded by more federal spending.
Meanwhile, tax experts are weighing in on Biden’s plan, a spending initiative he claims will be paid for by the tax increases included in the bill.
The Democratic tax plan would fall short of paying for all of Joe Biden’s social spending bill and would decrease America’s gross domestic product, according to a new think tank analysis.
Democrats are struggling toward agreeing to a spending package, now expected to cost about $1.75 trillion. The Tax Foundation, which generally favors lower taxes, said revenue-raising provisions in the current iteration of the plan would net about $1.2 trillion over the next decade, although after accounting for expanded tax credits, the number comes out to $768 billion.
The group said that the combined long-run effects of the updated proposal would slightly reduce gross domestic product by 0.37% and cost the United States about 100,000 full-time equivalent jobs.
“The proposed 15% minimum tax on corporate book income is the most economically damaging provision in the bill, reducing GDP by 0.1 percent and costing about 25,000 jobs,” the report reads.
One of the more recent inclusions in the Democratic tax agenda is a proposed 5% surtax on income above $10 million and an additional 3% surtax on individuals who earn more than $25 million annually. The plan also intends to close “loopholes” that allow some of the wealthy to avoid paying a 3.8% Medicare surtax on their earnings, the administration has said.
The Tax Foundation said that the surtax on the adjusted gross income of those earning above $10 million would erase 29,000 jobs and tax hikes on pass-through businesses (that is, businesses that file taxes through the individual side of the code) would cut 16,000 jobs.
Democrats can’t afford to lose any votes from their party, and centrist Democratic Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia have used their leverage to pare down some of the biggest tax increases and spending provisions in the framework, bringing down the total cost from the $3.5 trillion sought by Democrats.
Author: Elizabeth Tierney