Biden Tax Plan Would Take From the Rich, Give to the Poor, Analysis Finds
Federal income taxes would rise significantly for high-income households under policies proposed by President Biden, while middle- and lower-income households would see taxes decrease, according to a new analysis by the Tax Policy Center.
The top 1% of households, which earn at least $800,000, would pay more than $213,000 on average next year under Biden’s tax plans, while the top 0.1% of households, earning at least $3.6 million, would pay $1.6 million more on average.
At the other end of the income scale, households earning less than $26,000 would see their taxes fall by $600 on average, while households earning between $52,000 and $92,000 would pay $300 less on average. Low-income families with children would see a particularly large decline, with taxes paid falling by an average of $3,200.
Rounding up Biden’s proposed tax policies: TPC based its analysis on the changes included in Biden’s 2022 budget request, which are outlined in the Treasury Department’s so-called Green Book.
The proposed policies include extending the recent but temporary increases in the Child Tax Credit, the Child and Dependent Care Tax Credit and the Earned Income Tax Credit, all of which benefit low- and middle-income households. TPC also looked at the effects of Biden’s proposed increases to the top income tax rate, capital gains taxes and the estate tax, as well as an increase in business tax rates, which affect high-income households the most.
The bottom line: "Biden is proposing major changes in the US tax code," says TPC’s Howard Gleckman. "And, as he has been saying for a year, they largely are split between tax cuts for families with children and tax increases on high-income households and corporations."
In an opinion piece Wednesday, Greg Sargent of The Washington Post said the TPC analysis shows that Biden’s proposed policies would impose "a surprisingly significant tax hike" on high earners, while delivering "a significantly larger financial lift to ordinary American families with children — via a tax cut — than you might have thought."
Bipartisan Groups in Senate and House Still Trying to Craft Infrastructure Deal
Now that President Biden has cut off infrastructure talks with a group of Senate Republicans led by Sen. Shelley Moore Capito (R-WV), the immediate focus will shift to a bipartisan group of senators working on an infrastructure package.
That group "made good progress" on its proposal during a Tuesday evening meeting, Sen. Mitt Romney (R-UT) said, according to The Washington Post.
While the senators have not publicly released a proposed cost for their plan, they reportedly are considering a total around $900 billion. Romney said the group had hashed out spending items over a five-year period. "We went through line by line and we’ve got pretty good agreement on most of those and went to the pay fors as well and they’re a little less solid," he said.
One aspect on the revenue side appears to be solid, though: Biden’s proposed tax increases are off the table in the group’s discussions, The Hill’s Jordain Carney reports.
It’s still unclear, though, just how many senators might support any deal the bipartisan group develops. Capito told reporters that she was set to bring at least half of the GOP caucus on board if she had been able to secure an agreement with Biden.
"I’d do what I could to frustrate its passage," Sen. Ron Johnson (R-WI) said of any deal costing more than $700 billion, according to Politico. "I think we have a growing group of people who are willing to do that as well."
A bipartisan House proposal: While the Senate group crafts its package, the 58-member bipartisan House Problem Solvers Caucus on Wednesday released its own $1.25 trillion spending plan for physical infrastructure, which includes $761.8 billion in new spending over eight years.
The co-chairs of the caucus, Reps. Josh Gottheimer (D-NJ) and Brian Fitzpatrick (R-PA), have been engaged with the bipartisan Senate group and the House caucus said it hoped its framework could help break the gridlock on an infrastructure package.
"As others obstruct, divide and disengage, the Problem Solvers Caucus worked together to develop a bipartisan, physical infrastructure solution with the support of 29 Democrats and 29 Republicans," Rep. Dean Phillips (D-MN) said in a statement. "We’re committed to bring people together and get things done, and we won’t give up."
The proposal includes:
* $582 billion for highways, roads, bridges and safety;
* $155 billion for transit;
* $120 billion for Amtrak and passenger rail;
* $74 billion for water and wastewater programs;
* $71 billion for clean energy and the electric grid;
* $45 billion for broadband;
* $41 billion for airports;
* $26 billion for waterways and ports;
* and $25 billion for electric vehicle infrastructure.
"The transit, passenger rail and electric vehicle funding is significantly higher than in the Capito group’s plan," Roll Call’s Lindsey McPherson reports. "The Problem Solvers framework, however, includes less money for broadband internet access — $45 billion, compared to $65 billion in the last public offer Capito’s group made. It also includes less money for drinking and wastewater — $60 billion, compared to Capito’s $72 billion."
Biden called for $1 trillion in new spending in his talks with Capito, whose last offer came in at nearly $1 trillion, with new spending above the current baseline only about a third of the total. Capito and her group said that Biden had told them the $1 trillion could include existing spending plans before changing his demands.
"The Problem Solvers Caucus framework gets much closer to Biden’s demand on new spending," McPherson writes. "And unlike the offer from Capito’s group, it has buy-in from congressional Democrats. However, the bipartisan caucus has not yet included any provisions to offset the cost of its proposal."
US to Donate 500 Million Vaccine Doses to World
The Biden administration has purchased 500 million doses of Pfizer's Covid-19 vaccine and plans to distribute them to countries around the world, according to multiple news reports Tuesday. President Biden is expected to announce the plan this week at the Group of Seven meeting in Great Britain.
Pfizer is selling the doses to the U.S. at a "not-for-profit" price, according to The Washington Post, though the price was not specified. About 200 million doses will be distributed this year, and another 300 million in the first half of 2022. The distribution will be handled by COVAX, an international vaccine effort, with a focus on 92 low-income nations, as well as members of the African Union.
White House adviser Jake Sullivan told reporters that Biden wanted to set an example for the world of American leadership. "He does want to show rallying the rest of the world's democracies -- the democracies are the countries that can best deliver solutions for people everywhere," Sullivan said. "That goes for Covid-19, that goes for climate change, it goes for economic recovery and it goes for the basic human rights and human dignity of all people."
Number of the Day: Health Care Costs Projected to Rise 6.5% in 2022
PwC’s Health Research Institute said in a new report that it sees health care costs rising by 6.5% in 2022 as the Covid-19 pandemic continues to affect spending. The increase is slightly lower than the 7% rise projected for 2021 but higher than the increases from 2016 to 2020.
"The pandemic’s long tail may increase utilization and healthcare spending in 2022 thanks to the return of some care deferred during the pandemic, the ongoing costs of COVID-19, increased mental health and substance use issues, and worsening population health," said the report.
Read more at PwC or Fierce Healthcare.
- We Ran the Treasury Department. This Is How to Fix Tax Evasion – Timothy F. Geithner, Jacob J. Lew, Henry M. Paulson Jr., Robert E. Rubin and Lawrence H. Summers, New York Times
- The Real Tax Scandal Is What’s Legal – Binyamin Appelbaum, New York Times
- Here’s Exhibit A for Dramatic Tax Reform – Jennifer Rubin, Washington Post
- What’s the Real Goal of Infrastructure Talks? – Jonathan Bernstein, Bloomberg
- Believe It or Not, the Senate Actually Passed a Very Ambitious Bill – Paul Waldman, Washington Post
- Do Bond Traders Know Something About Inflation We Don't? – Brian Chappatta, Bloomberg
- Was Biden’s Bold First 100 Days A Mirage? – Perry Bacon Jr., Washington Post
- Biden's Confiscatory Tax Plans Unleash Class Warfare – Joshua Rauh and Aharon Friedman, The Hill
- Employers Are Begging for Workers. Maybe That’s a Good Thing – Ezra Klein and Jamila Michener, New York Times (podcast)
- Biden's Trickle-Up Economics Is Bound to Fail – Allison Schrager, Bloomberg
- The Cold War Against Covid Has Begun – Michael R. Strain, Bloomberg
- How to Keep the Economy Booming — and Meet the Demand for Workers – Glenn Hubbard, New York Times
- Rich Schools, Poor Schools and a Biden Plan – Kevin Carey, New York Times
- Thank You, Uncle Sam. The Vaccine Rollout Is the Biggest Government Success in Decades – Max Boot, Washington Post
- The Pandemic Has a New Problem Named ‘Delta’ – Washington Post Editorial Board