Tax hikes in Biden's revised Build Back Better plan would raise $500BN LESS than White House claims, University of Pennsylvania analysis shows
Non-partisan analysts are questioning the Biden Administration's claims that tax hikes in the revised Build Back Better spending plan would raise two trillion dollars.
University of Pennsylvania's Wharton School of Business have projected that the plan will only accumulate, $1,527 billion- a difference of $468billion- over the next decade.
The biggest differences between the White House's calculations and Wharton's were the 15 per cent minimum tax on corporations. The tax only applies to companies that reported over $1 billion in income for three straight years.
Analysts found the revenue would be around $195billion - considerably less than the White House's $325 billion estimate.
Biden's plan to bolster the IRS with more agents, new technology and taxpayer services was sold as bringing in $400billion but Wharton researchers found it would be closer to half that at $190billion.
One of the reasons for the shortfall was because the president was forced to drop plans to order banks and other financial institutions to report account information for customers with annual in and outflows of $600 - a plan that would have raised an estimated $300billion.
The last last discrepancy comes from the one per cent surcharge the Build Back Better plan will levy on stock buybacks, in an effort to deter companies from repurchasing their own stocks from investors.
The White House predicted this tax would bring in $125 billion, while analysts say it will be more like $50 billion.
Biden's spending plan framework, released Thursday, listed the plans to raise $2 trillion in 10 years to fund the Build Back Better Act 'by asking the wealthiest Americans and most profitable corporations to pay their fair share.'
The Biden Administration released a revised framework to raise the $2 trillion needed to fund the Build Back Better Plan, analysts from the University of Pennsylvania Wharton School of Business projected the plan would only raise $1,527 billion
Biden laid out the plans before leaving for his trip to Europe. He did not say for certain he had a deal that could clear Congress – and spent much of his more than 20 minute speech selling components of the framework that did not yet have a clear path to enactment.
'After months of tough and thoughtful negotiations I think we have an historic – I know we have – an historic economic framework,' Biden told reporters from the East Room of the White House after delaying his planned departure for Rome.
'We spent hours and hours over months and months working on this,' he said. 'No one got everything they wanted, included me.'
It was a reference to major policy provisions he had to jettison to try to keep costs under a lower ceiling amid centrist opposition in the Senate.
He did not say the plan has the support of a pair of key Senate Democratic holdouts – and at the end of his remarks he ignored questions about Sens. Joe Manchin and Kyrsten Sinema, two Democratic lawmakers who hold the fate of the package in their hands.
'I’ll see you in Italy and in Scotland. Thank you,' Biden told reporters, without taking questions.
Biden pointed to the compromises Democrats have sought to make to reach a deal – without yet finding something that 50 Senate Democrats have committed to backing, let along the House majority.
'I know how deeply people feel about the things that they fight for. But this framework includes historic investments in our nation and our people,' Biden said.
Without a victory in hand, Biden nevertheless crowed about the framework, and gave a defense of compromising after holding countless meetings with factions and leaders.
'I want to thank my colleagues in the Congress and the leadership. We spent hours and hours and hours over months and months working on this,' he said. 'No one got everything they wanted, including me. But that’s what compromise is. That’s consensus. That’s what I ran on.'
Biden and Kamala Harris left the podium without taking questions from reporters on Thursday
The original framework proposed steep increases in corporate taxes, capital gains taxes and income taxes, which are mostly missing from the most recent outline.
Biden had originally said he would repeal former President Donald Trump's 2017 tax law, which substantially lowered rates for corporations and the mega-rich, but Sen. Sinema's resistance has kept the majority of the law in place.
'I’ve long said compromise and consensus are the only way you get big things done in a democracy. Important things done for the country. I know it's hard. I know deeply people feel about the things that they fight for. But this framework includes historic investments in our nation and in our people,' said Biden.
In his remarks, Biden also pointed to his own 2020 victory, where he pitched many of the ideas in the package, including funds for child care, climate change, and help for families with aging parents or young children.
'I campaigned on them. And the American people spoke. This agenda, the agenda that’s in these bills, is what 81 million Americans voted for,' Biden said. 'Their voices deserve to be heard, not denied, or worse ignored.'
Without action 'we risk losing our edge as a nation,' Biden said.
'This is about competitiveness versus complacency. It’s about leading the world or letting the world pass us by.'
He pointed out key provisions, including: an expanded child tax credit for families; funds for 500,000 electric vehicle charge stations; funds to cap oil leaks and methane wells; aide for people with elderly parents; pre-K funding; and tax provisions to target the wealthy.
The framework should appease Sen. Kyrsten Sinema (left) as a prescription drug provision she didn't like was dropped, as well as Sen. Joe Manchin (right), who was against offering paid family leave
'All I’m asking is pay your fair share. Pay your fair share. Pay your fair share,' he said.
Biden repeated past statements that the package won't add to the deficit – after negotiators scrambled to assemble a series of new pay-fors, including some that emerged only in recent days.
'It will not add to the deficit at all. It will react to reduce the deficit, according to the economists,' Biden said.
Biden cited '17 Nobel prize winners in economics said it will lower the inflationary pressures on the economy.'
'Ive said before these plans are fiscally responsible. They're fully paid for. They don't add a single penny to the deficit. They don't raise taxes on anyone making less than $400,000 a year.'
The bill includes nearly $2 trillion in revenue raisers, and assumes $400 billion in savings from beefed up IRS enforcement alone. One new tax provision would provide a 5 per cent surtax on income of more than $10 million.
According to the White House the revenue-raising provisions would cancel out the new social spending and climate programs. The framework does not yet have bill language – and congressional scorekeepers cannot provide an estimate until that happens.
Biden's praise for the Build Back Better package came as a separate bipartisan infrastructure deal is also under threat.
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