Biden Plan Would Cut Taxes for Most, New Analysis Finds

By Yuval Rosenberg

Hey, it’s almost Friday! But before we get
ahead of ourselves, today is also Veterans Day — and as we express
our deepest gratitude to those who served and their families, we
can also be thankful that, as The New York Times
notes, it’s the first Veterans Day in two decades
without troops engaged in an active war. It’s also an appropriate
time to point out this
troubling Roll Call story highlighting how hunger
among servicemembers and veterans is contributing to rising suicide
rates for those groups.

Here’s what else you need to know.

Biden’s Build Back Better Plan Would Cut Taxes for Most
Households: Analysis

The latest version of President Biden’s Build Back Better
bill would provide a tax cut on average to most households in 2022
while increasing taxes on the top 1%, according to a new
analysis from the nonpartisan Tax Policy
Center.

The top 1% of households — those earning more than $885,000 —
would pay roughly $55,000 more per year on average under the
proposed changes to the tax code. Those in the top 0.1% ($4 million
and higher) would pay about $585,000 more per year on average.

When all major tax provisions — which touch on a variety of
areas such as health care coverage and excise taxes — are taken
into account, about 20% to 30% of middle-income households would
see a small tax increase in 2022, totaling less than $100 on
average. Higher-income households earning $200,000 to $500,000
would pay about $230 more.

Considering just direct taxes, less than 0.1% of households
earning less than $500,000 would see a tax hike in 2022, though the
picture changes in 2023, when some tax provisions expire and some
kick in, resulting in many households seeing a tax increase
relative to 2022. (TPC notes that “analyzing the House Democrats’
plan is especially complicated because the effective dates of its
many tax provisions vary widely.”)

TPC also points out an odd quirk in the Democratic proposal
related to the state and local tax (SALT) deduction. In its most
recent iteration, the plan would raise the cap on the SALT
deduction to $80,000 from 2021 to 2031, which would provide the
majority of high-income households with an overall tax cut.
Households earning between $500,000 and $1 million a year would end
up getting a $6,130 tax cut on average in 2022, according to one
TPC
table, while those earning more than $1 million
would receive a tax cut of $68,300.

“Thanks to the SALT cap increase, over two-thirds of
millionaires will get a TAX CUT under Build Back Better,”
tweeted Marc Goldwein of the Committee for a Responsible
Federal Budget.

Whether that tax provision makes it into the final legislation
remains to be seen.

The bottom line: “While the latest
version of Biden’s signature initiative drops or revises many of
his original proposals, it still reflects one key goal,” says TPC’s
Howard Gleckman. “It would raise taxes on high income households
and corporations while reducing, or at least not raising, taxes for
the vast majority of low- and moderate-income
households.”

Quotes of the Day

“Biden’s original tax proposals were progressive; they raised
a lot of money from the top end; they were efficient and effective
without creating new loopholes. Now, it seems we are left grasping
at ridiculous revenue-raisers and a bunch of gimmicks.”

– Steve Rosenthal of the Tax Policy Center, in a

Washington Post article examining how the White
House’s initial tax proposals have been whittled down in response
to opposition from some Democrats.

“To meet the demands of Sen. Kyrsten Sinema (D-Ariz.), the White
House agreed to drop a proposed 3 percent tax on taxpayers earning
over $5 million, instead agreeing to target the higher tax to those
earning more than $10 million,’ the Post’s Jeff Stein reports. “The
Biden administration also agreed to pull a proposed tax in late
October targeting 700 billionaires after it faced criticism from a
number of top Democrats, including House Speaker Nancy Pelosi
(Calif.), who complained in one phone call with senior party
officials on Oct. 26 that the plan amounted to a publicity stunt,
two people familiar with the matter said. Sen. Joe Manchin
(D-W.Va.) also raised substantive objections to the plan.”

Stein adds that a new White House plan to impose a 15% minimum
tax on corporations now faces objections from renewable-energy
groups who are concerned that it could undermine the desired effect
of new tax credits to promote investments in clean energy.

“It’s such a piddling increase. One percent is not going to
do much of anything.”

— Ed Yardeni, president of investment advisory firm Yardeni
Research, talking to
Politico about Democrats’ proposed 1% tax on stock
buybacks. The tax, projected to produce $124 billion over 10 years,
targets companies that buy their own shares in order to boost
prices, providing larger payouts for company executives. Some
market analysts say the tax is so small that it won’t have much
effect on companies considering buyouts. “Do you want to pay it?
No,” said Howard Silverblatt of S&P Dow Jones Indices. “But if
you’re buying stock on a continuing basis, your share price is
moving more than 1 percent and very often it will move more than
one percent — up or down — in one day.”

Moderna and the NIH Are Fighting Over Patent Rights to the
Covid Vaccine

The Moderna vaccine against Covid-19 has become the subject of a

bitter patent fight, with the National Institutes
of Health insisting that three government scientists worked with
the company on the genetic sequence used in the vaccine to trigger
an immune response and should be named in the company’s patent
application. The company, which excluded the government scientists
in a July patent application, disagrees. It says that only
Moderna’s scientists came up with the mRNA sequence used in the
vaccine.

“The dispute is about much more than scientific accolades or
ego,” Sheryl Gay Stolberg and Rebecca Robbins reported this week at

The New York Times. They explained:

“If the three agency scientists are named on the patent
along with the Moderna employees, the federal government could have
more of a say in which companies manufacture the vaccine, which in
turn could influence which countries get access. It would also
secure a nearly unfettered right to license the technology, which
could bring millions into the federal treasury.

“The fight comes amid mounting frustration in the U.S.
government and elsewhere with Moderna’s limited efforts to get its
vaccine to poorer countries. The company, which has not previously
brought a product to market, received nearly $10 billion in
taxpayer funding to develop the vaccine, test it and provide doses
to the federal government. It has already lined up supply deals
worth about $35 billion through the end of 2022.”

Dr. Francis Collins, the NIH director, told
Reuters on Wednesday that scientists at the
agency’s Vaccine Research Center played "a major role" in
developing the vaccine and said that the government would defend
its claim to a share of the patent. "I think Moderna has made a
serious mistake here in not providing the kind of co-inventorship
credit to people who played a major role in the development of the
vaccine that they're now making a fair amount of money off of,"
Collins said.

He added that the federal collaboration with Moderna had been
friendly for years, but that efforts to resolve the patent issue
amicably had failed. "But we are not done,” he said. “Clearly this
is something that legal authorities are going to have to figure
out.”

Moderna reportedly expects sales of its Covid-19 vaccine to
total $15 billion to $18 billion this year and up to $22 billion
next year. “Sales of its vaccine both this year and next are likely
to rank among the highest in a single year for any medical product
in history,” the Times said.

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