The Biden administration’s “Build Back Better” spending bill would raise taxes on many middle-class families, according to a report from the nonpartisan Tax Policy Center, despite the president’s promise to not raise taxes on anyone making more than $400,000 per year.
The report found that in the year 2022, when looking at direct taxes only — that is, individual income taxes and payroll taxes — most American families in all income groups except the top 1% would see a tax cut. But when all of the major tax laws are taken into account, TPC reports that “roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022.” Those increases would be small, with most low and middle-class families paying about $100 more in taxes.
However, Tax Policy Center notes that, beginning in 2023, things would begin to change.
The bill’s extension of the child tax credit would extend only through 2022. In addition, the corporate minimum tax, which TPC passes on to households by virtue of family members working for and investing in corporations, would not take effect until 2023.
“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 report said.
Americans’ taxes would also rise in later years, the report indicated, because the tax cuts on individuals made by the 2017 Tax Cuts and Jobs Act expire at the end of 2025. TPC estimated that those increases would be small, only about $70 per household for middle-class families.
Notably, the TPC report seems to conflict with the Biden administration’s promise not to increase taxes on anyone making less than $400,000 a year.
The report also comes as an analysis by the U.S. Chamber of Commerce showed that the reconciliation bill contains a number of accounting gimmicks which would mean the final cost of the spending bill would amount to $4.1 trillion in new spending, far more than the proposed $1.75 trillion cost being publicly announced. The bill notably includes short-term tax increases, but after 2026, would see tax increases for the next five years.
The Democrat Party has also planned a $2.9 trillion tax hike that would substantially increase taxes on 85% of Americans.
Some Americans in almost every tax bracket would see tax increases by 2023, and the burden would fall mainly on the middle class, since 95% of small businesses are organized as “pass-through entities” that pay the income tax. The bill would also increase the corporate tax rate from 21% to 26.5%, which would affect more than 1.4 million small businesses operating as C-corporations.
The report also comes as the hidden tax of inflation significantly impacts their pocketbooks. The Daily Wire previously reported that both the Consumer and Producer Price Indexes have jumped to record annual highs for the period from October 2020 to October 2021. The Chamber of Commerce report also indicated that the reconciliation bill’s spending provisions would significantly increase inflationary pressure, furthering the strain on Americans’ pocketbooks.
The Daily Wire is one of America’s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a member.
Source: Dailywire
