The tax hikes President Joe Biden’s Build Back Better social program spending bill would raise nearly $1.48 trillion in new tax revenue, according to the Joint Committee on Taxation.
Despite the massive tax hike, the new revenue still falls short of the $1.75 trillion spending increase House Democrats have packed into the legislation to fund the Biden agenda of new cradle to grave social programs and green new deal schemes.
Representative Richard Neal (D-MA), the chairman of the House Ways and Means Committee, has said the package would be “fully paid for” with taxes and other offsets. Centrist Democrats have said they want to see analyses from the Joint Committee on Taxation (JCT) and the Congressional Budget Office before voting on the legislation.
In one surprise result, raising the cap on state and local tax deductions actually raises revenue. In the statutory text analyzed by the JCT, the cap on state and local tax deductions is raised from $10,000 to $72,0000 but the limit is extended through 2031. Under current law, it expires in 2025. As a result of the raise and extension, the net effect is a revenue rise of about $2 billion over the decade.
Hikes on business taxes—including a corporate minimum tax and taxing stock buybacks—would raise around $814 billion over a decade, according to the JCT. Tax hikes on high income Americans would raise around $640 billion over a decade.
The budgetary effects of several provisions were not estimated by the JCT. Their costs will be evaluated by the Congressional Budget Office. These include revenue from more stringent enforcement by the Internal Revenue Service and changes to how the government prices prescription drugs.
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