Biden Plan Would Cut Taxes for Most Americans: Analysis

By Yuval Rosenberg

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.

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