Funding, Spending, Taxes, Equity, and Deficit Reduction in the Build Back Better Bill
The Committee for a Responsible Federal Budget projects costs and revenues over the next ten years. It projects spending of $2.4 billion and revenue offsets (taxes and program cuts) of $2.3 trillion. https://www.crfb.org/blogs/full-estimates-house-build-back-better-act
Spending -- $2.4 trillion
· Family Benefits -- $585 billion
· Climate and Infrastructure -- $570 billion
· Tax credits -- $215 billion
· Health Care -- $340 billion
· Other (such as housing and higher education) -- $325 billion
· Increase SALT deduction cap from $10,000 to $80,000 — $275 billion
· Immigration reform -- $110 billion
Taxes and program reductions -- $2.3 trillion
· Increase corporate minimum taxes -- $830 billion
· Increase taxes on highest earners -- $640 billion
· Other -- $180 billion
· Reductions in health care spending -- $325 billion
Total impact on federal deficit over 10 years -- $160 billion
The Tax Policy Center gives a short description of the federal tax changes for individuals and corporations. https://www.taxpolicycenter.org/feature/tpcs-build-back-better-resources
Individuals
· Surcharge of 5% on an individual’s income above $10 million and 3% above $25 million
· Permanent refundability of the child tax credit
· Restrict MEGA IRAs
· Increase the cap on deductions for state and local taxes from $10,000 to $80,000.
Corporations
· 15% minimum tax for large corporations
· Restructure corporate tax rules for large multi-national firms to restrict tax avoidance
· Restrict favorable tax treatment of corporate stock buybacks
· Enforce federal tax laws by beefing up IRS auditing
The Tax Policy Center analyzed the distributional effects of the new spending and new taxes on individuals after tax incomes by income quintile. https://www.taxpolicycenter.org/taxvox/build-back-better-20-still-raises-taxes-high-income-households-and-reduces-them-others
· Bottom 20% -- + 4%
· 20-40% -- + 2%
· 40-60% -- + 1%
· 60-80% -- + 1%
· 80-100% -- minimal change
· Top 1% -- (- 3%)
· Top 0.1% -- (- 6%)
The CBO (Congressional Budget Office) scored the fiscal impacts of the Build Back Better Act. Its conclusions were that over 10 years, it adds $367 billion to the federal deficit. It did not include in that calculation, its score for the impacts of increased IRS auditing at $207 billion. The total impact on the budget deficit across 10 years is $160 billion. https://www.cbo.gov/publication/57627
In summary, Build Back Better would help a lot of low, moderate, middle and upper middle income families and it would be paid for by large corporations who have dodged taxes and by very wealthy individuals. It would have a minimal impact on the federal budget.
You might wish to urge you elected Senators and Representatives to vote for it.
Prepared by: Lucien Wulsin
Dated: 12/8/21