Analysts: Dem 'Build Back Better' Plan Would Raise Taxes on Middle Class, Give Tax Break to Millionaires

|
|
Posted: Nov 15, 2021 1:15 PM
Analysts: Dem 'Build Back Better' Plan Would Raise Taxes on Middle Class, Give Tax Break to Millionaires

Source: AP Photo/Alex Brandon

We tacked these findings on to the tail end of Friday's post, but they really deserve to be highlighted in a separate post.  As Democrats try to push forward with their partisan, multi-trillion-dollar reconciliation spending bill, some major tax-related red flags are emerging.  On the campaign trail, President Biden repeatedly promised that under his administration, no one making under $400,000 per year would see a tax increase.  We vigorously disputed that promise at the time, but now it looks like Democrats may be on the verge of shattering that pledge in epic fashion.  The left-leaning Tax Policy Center examined House Democrats' BBB legislation and has determined that as written, the policy package would raise taxes on millions of middle class households.  A toxic bill gets more poisonous:

President Joe Biden’s Build Back Better agenda would raise taxes on up to 30 percent of middle-class families, despite his campaign promises not to hike taxes on anyone making under $400,000 per year, according to a new analysis. “Taking into account all major tax provisions, roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022,” an analysis published late Thursday by the non-partisan Tax Policy Center found...In 2023, the proposed expansions of the Child Tax Credit payments would end and the corporate minimum tax on book income, which is one of the largest proposed tax hikes in the bill. The Tax Policy Center said this will hit families indirectly by limiting companies’ return to shareholders, which include workers and those investing for retirement. A proposed increase in the nicotine tax could also increase tax burdens across all income brackets. “In general, the combined effects of these changes would result in many households paying higher taxes in 2023 than in 2022. They would shrink the average 2023 tax cuts for low-income households, raise taxes slightly for moderate-income households, and increase taxes significantly for the highest-income households,” the Tax Policy Center said. Meanwhile, another part of the proposal that would increase the deduction limit on state and local taxes — popularly known as SALT deductions — would benefit wealthy families in high-tax states like New York and California, while providing almost no benefit to the middle class, according to the analysis.

Yes, you read that right. About half of all Americans live in middle class households, so let's ballpark it at 165 million people.  Tens of millions of these people would see their taxes go up next year under the House Democrats' BBB bill, with the situation growing worse in 2023.  Biden promised that nobody would see a tax increase except those earning $400,000 or more.  In addition to that, as the excerpt above flags, blue state rich people are poised to get a tax break under this plan.  I'm incredulous, and so is this economist:


"The tax aspects of the bill are truly sideways," writes left-wing MSNBC host Chris Hayes, echoing horror among progressives over this revelation.  Tax the rich, they say.  Their bill will raise taxes on millions of middle class families while giving a supermajority of American millionaires a tax break.  Just amazing.  Why would they do this?  They need to slide into middle class pockets in order to pay for part of their spending spree -- remember, "only the rich" math never really works or pans out -- and they want to reinstitute the SALT deduction for high earners in high-tax states because they're worried about getting punished in affluent suburban districts where they've made gains in recent years.  Two important questions: Will progressives really vote for a package that is such a huge boon to the millionaires they rail against?  And will 'moderate' Democrats truly be willing to walk the plank and vote for a bill that raises taxes on the middle class while handing tax breaks to coastal state millionaires?  The campaign ads write themselves.  And remember, there's no guarantee that the House bill ever becomes law at all.  It will either change in the Senate, perhaps dramatically, or perhaps even die over there.  Why attach your name to a vote with such a built-in, brutal, true attack line from Republicans, on behalf of legislation that is by no means guaranteed to ever be signed into law?  And that's not all:

The White House claims these policies will grow the economy. Yet the nonpartisan economists at the Penn-Wharton Budget Model calculate that — if Congress follows White House policy to make most provisions permanent — then Build Back Better will reduce the long-term GDP by 2.8 percent, reduce wages by 1.5 percent, and reduce work hours by 1.3 percent. The only thing it will expand is government debt, by 25 percent...The legislation would end the requirement of a valid Social Security number and thus extend the refundable child credit to undocumented families — covering approximately 675,000 children. It is not anti-immigrant to note that even legal immigrants (such as green card holders) have typically had to wait five years to receive public assistance benefits. The waiting period matters because, for a family with three young children, the fully refundable $10,800 child tax credit payment would exceed the entire average family income in several Central and South American countries, and thus encourage more illegal border crossings.

What a deal. As we mentioned earlier in the polling post, the new Washington Post/ABC News survey shows that 59 percent of Americans now "worry [Biden will] do too much to increase the size and role of government, up 6 points since spring."  The poll finds that most respondents favor another big spending bill, but the size/role of government question cuts against that dynamic -- and voters are very worried about inflation, which could well dampen enthusiasm for trillions in new spending.  Multiple polls have now shown that only a small fraction of the public believes 'Build Back Better' would help them.  Blue state millionaires may be among them.  But how will middle class families react if their taxes go up, while even more trillions in new government spending fuels inflation?  I'll leave you with some innovative Left/media messaging that will surely go over well with hurting Americans:

Recommended
Be Afraid, Be Very Afraid
Derek Hunter

Recommended Townhall Video