The nonpartisan Joint Committee on Taxation tweeted out this low-key correction to its previous analysis on the House’s Build Back Better bill and the tax provisions included in it. “The staff of the Joint Committee on Taxation has discovered an error in the calculation of the average tax rate for calendar year 2022 for taxpayers with incomes in excess of $500,000.”
Oops. The original calculation from the JCT was that BBB would cut average taxes for incomes over $1 million by 1.7%. The new calculations say that those making more than $1 million would pay 3.2% more in taxes in the first year, 2022, and even more in subsequent years—4.1 percentage points in 2023 and 3.3 percentage points in 2025. So no, millionaires are not getting a tax cut with this plan, as Republicans would have you believe.
White House chief of staff Ron Klain was succinct in reacting on behalf of the administration.
The House bill does give a lower rate to people making between $500,000 to $1 million because it resets the cap state and local tax deductions (SALT) from $10,000 to $80,000. The deduction cap was set in the GOP tax scam of 2017 to punish blue state residents who pay those higher taxes. That is, unless the Senate makes changes to that provision. In the bill they got from the House, the deduction is capped at $80,000.
The bill would impose a minimum tax of 15 percent on profits reported by billion-dollar corporations which is estimated to raise $319 billion, according to a Congressional Progressive Caucus fact sheet. The bill also raises more than $120 billion through a tax on stock buybacks. It also has a 5% surcharge for $10 million-plus earners with an additional 3% for those making more than $25 million, the top 0.02%. The bill would also set a 28% rate on long-term capital gains and dividends, up from 20%. It gives $79 billion in new funding to the IRS so it can go after the cheaters—the top 1% who evade as much as $160 billion annually.
On the other side, it provides breaks for lower-income filers, extending the enhanced Child Tax Credit provided through the American Rescue Plan—$300 monthly for each child under age 6 and $250 monthly for kids age 6-17—through 2022. It makes the credit fully refundable permanently. It also extends the enhanced Earned Income Tax Credit through 2022, lowering the tax burden for an estimated 17 million low-wage workers.
Oops. The original calculation from the JCT was that BBB would cut average taxes for incomes over $1 million by 1.7%. The new calculations say that those making more than $1 million would pay 3.2% more in taxes in the first year, 2022, and even more in subsequent years—4.1 percentage points in 2023 and 3.3 percentage points in 2025. So no, millionaires are not getting a tax cut with this plan, as Republicans would have you believe.
White House chief of staff Ron Klain was succinct in reacting on behalf of the administration.
The House bill does give a lower rate to people making between $500,000 to $1 million because it resets the cap state and local tax deductions (SALT) from $10,000 to $80,000. The deduction cap was set in the GOP tax scam of 2017 to punish blue state residents who pay those higher taxes. That is, unless the Senate makes changes to that provision. In the bill they got from the House, the deduction is capped at $80,000.
The bill would impose a minimum tax of 15 percent on profits reported by billion-dollar corporations which is estimated to raise $319 billion, according to a Congressional Progressive Caucus fact sheet. The bill also raises more than $120 billion through a tax on stock buybacks. It also has a 5% surcharge for $10 million-plus earners with an additional 3% for those making more than $25 million, the top 0.02%. The bill would also set a 28% rate on long-term capital gains and dividends, up from 20%. It gives $79 billion in new funding to the IRS so it can go after the cheaters—the top 1% who evade as much as $160 billion annually.
On the other side, it provides breaks for lower-income filers, extending the enhanced Child Tax Credit provided through the American Rescue Plan—$300 monthly for each child under age 6 and $250 monthly for kids age 6-17—through 2022. It makes the credit fully refundable permanently. It also extends the enhanced Earned Income Tax Credit through 2022, lowering the tax burden for an estimated 17 million low-wage workers.