Tax policy experts described Republicans' claims about the Biden plan as 'ridiculous' and 'silliness.'
Congressional Republicans and conservative news outlets have seized on a new report to falsely suggest that President Joe Biden's jobs plan breaks his promise not to raise taxes on anyone earning under $400,000. But experts say the analysis does not show that at all.
On Thursday, the Tax Policy Center, a nonprofit think tank, posted an analysis looking at many of the tax provisions in the version of the Build Back Better plan being considered by the House of Representatives. The think tank's analysis found that the plan "would cut taxes on average for nearly all income groups in 2022" while raising them for the wealthiest 1% of American earners.
But conservatives latched onto one table in the report that seemed to suggest that 20% to 30% of middle-income earners would see their taxes raised slightly under the plan — by about $100 or less, on average. The Tax Policy Center's analysis also found that the bottom 80% of American families would save an average of $700 to $830 under the plan, meaning that the vast majority of middle-income families would see a net gain under the plan.
On Friday, the New York Post ran a story with the misleading headline "Biden's Build Back Better will hike taxes on 30% of middle-class families."
"Joe Biden LIED," tweeted House Republican Conference Chair Elise Stefanik (R-NY), sharing a link to that story. "His Far-Left Socialist Spending Scam would RAISE taxes on middle-class Americans."
Rep. French Hill (R-AR) also pointed to the article, writing, "President Biden promised not to raise taxes on those making less than $400,000, yet his 'Build Back Better' agenda would raise taxes on up to 30% of middle-class families and give tax breaks of $25,000 to households that make over $1 million per year."
"Yet another broken promise by Pres. Biden," Rep. Randy Feenstra (R-IA) said, arguing that the Build Back Better plan would hit "working families" the hardest.
But these claims are misleading at best and false at worst, according to tax policy experts.
Chuck Marr, director of federal tax policy for the Center on Budget and Policy Priorities, said middle-class families will not see their taxes go up under the new plan.
"It's ridiculous," Marr told the American Independent Foundation. "There's no increase in taxes on middle-income people. There are tax cuts. It's silliness."
He also called Republicans' argument a "silly game of gotcha."
The tables in the Tax Policy Center's report examine the corporate tax increases, he said, and assess who will ultimately bear the cost of those hikes. "The way economists think about corporate taxes is that most of the tax increase falls on shareholders — shareholders tend to be wealthy people who own a larger share of corporate equities, stocks — but they attribute a small share of corporate taxes to labor, to workers."
He noted that in tables in the Tax Policy Center's "very solid" analysis that don't take into account these corporate tax increases, "you don't see this effect." The tables that do examine the corporate hikes show that the vast majority of the costs fall on the wealthier people who own most of the stock and that a small part could impact worker salaries.
The $1.75 trillion Build Back Better package would invest in climate change, clean energy, child care, free preschool, health care, home care, and an expanded tax credit for most families with kids. It would be funded through increased taxes on corporations and the wealthy, spending cuts, and a crackdown on wealthy tax cheats.
Seth Hanlon, a senior fellow at the Center for American Progress who analyzes federal taxes and budget policies, agreed that the plan does not violate Biden's tax pledge.
"Build Back Better Act does exactly what he promised — raises revenue from the wealthy and corporations, protects everyone earning under $400,000 from tax increases, and gives tax cuts to millions of working- and middle-class families, especially through the expanded Child Tax Credit," Hanlon told the American Independent Foundation in an email.
Hanlon also noted that the Tax Policy Center's study only focused on the bill's tax provisions and not its many cost-saving measures for working families, including "lower child care costs, free pre-K, lower prescription drug costs, a healthier planet, and so on."
Published with permission of The American Independent Foundation.