Bidens Build Back Better will raise taxes on 30% of middle-class families

President Joe Biden’s Build Back Better Agenda would raise taxes on up to 30 percent of middle-class families, despite his campaign promise not to raise taxes on anyone earning less than $ 400,000 a year, according to a new analysis.

“Taking into account all major tax provisions, about 20 percent to 30 percent of middle-income households would pay more in taxes by 2022,” an analysis published late Thursday by the non-partisan Tax Policy Center found.

However, the report highlighted that the tax increases would be “small”.

“Among those with a tax increase, low- and middle-income households would pay an additional $ 100 or less on average. Those earning $ 200,000- $ 500,000 would pay, on average, about $ 230 more,” it said.

Over time, however, this tax burden will change, according to the analysis of the $ 1.75 trillion proposal currently being considered by the House of Representatives.

The analysis was based on a November 3 copy of the proposed bill, although the Biden bill could still change during the negotiations.
The analysis was based on a November 3 copy of the proposed bill, although the Biden bill could still change during the negotiations.
AP

In 2023, the proposed extensions of the child tax deduction would cease and the corporate minimum tax on book income, which is one of the largest proposed tax increases in the bill.

The tax policy center said this will hit families indirectly by limiting corporate returns to shareholders, which include workers and those investing in retirement.

A proposed increase in the nicotine tax could also increase the tax burden across all income groups.

“In general, the combined effects of these changes will 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, ”said the Tax Policy Center.

Meanwhile, another part of the proposal that would increase the deduction limit for 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.

President Joe Biden's Build Back Better agenda would raise taxes on up to 30 percent of middle-class families, despite his campaign promise saying otherwise.
President Joe Biden’s Build Back Better agenda would raise taxes on up to 30 percent of middle-class families, despite his campaign promise saying otherwise.

“Despite what its initiators say, raising the ceiling to $ 80,000 would provide almost no benefit to middle-income households. It would reduce their 2021 taxes by an average of only $ 20,” the analysis said.

“Even those earning between $ 175.00 and $ 250,000 would get a tax cut of just over $ 400 or about 0.2 percent of after-tax income. In contrast, the higher SALT ceiling would increase after-tax income by 1.2 percent for them. , earning between about $ 370,000 and $ 870,000 (the 95th to 99th percentiles), ”it added.

The analysis was based on a copy of the bill on November 3, although the bill could still be amended during the negotiations.

At the same time, the proposal will also provide a major tax relief to the rich.

Household earnings of $ 1 million or more a year could pay $ 25,900 less in taxes, a tax cut nearly 10 times greater than households earning between $ 50,000 and $ 100,000, which would pay $ 2,600 less, based on the trial family of four, according to a separate analysis by the party policy committee for a responsible federal budget.

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