Among the provisions of President Biden’s Build Back Better bill, which the House passed on Friday, is multi-billion-dollar tax relief for the rich in blue areas, while raising taxes on a vast chunk of the middle class.
Today, the House passed my Build Back Better Act. I thank Speaker Pelosi, House leadership, and members who worked so hard and voted to pass this bill.
Now, it goes to the United States Senate, where I look forward to it passing as soon as possible so I can sign it into law.
— President Biden (@POTUS) November 19, 2021
The House approved President Biden’s social expenditure package on Friday morning, which serves as the foundation of his Build Back Better program.
The measure includes a clause that increases state and local tax subsidies, which mainly benefits Democrat-run states, while simultaneously boosting taxes on middle-class income by up to 30%.
Overturning Trump’s Reasonable Legislation
As part of the 2017 tax legislation, then-President Trump signed a $10,000 restriction on the sum of state and local taxes that might be deducted from one’s federal income tax bill.
The ability to deduct virtually all state and local taxes (SALT) from federal tax liability existed before the enactment of the limit. The limit is slated to expire in 2025, at the earliest.
Per the Washington Post, Biden’s social spending bill lifts the SALT threshold from $10,000 to $80,000 until 2031, after which it would be reduced to $10,000. It is likely that affluent individuals who live in deep blue, high-tax states would reap the most rewards from such a strategy.
According to a Tax Foundation analysis published in 2017 on state and local tax deductions, the SALT exemption specifically benefits higher-income people. It also benefits state and local authorities that impose greater than average tax burdens.
The deduction allows lower-and middle-income taxpayers to fund more liberal spending in wealthier states like California, New York, and New Jersey. By so doing, it lowers the perceived cost of higher taxes in those states.
Biden Targeting Those He Vowed to Defend
As stated by the Washington Post, the increase in the SALT ceiling included in Biden’s Build Back Better bill is akin to a “$285 billion tax reduction that would almost solely benefit high-income individuals over the next five years.” It would also be phased in overtime.
Meanwhile, the social spending package targets the middle class as well. It raises taxes on those earning less than $400,000 per year by 20% to 30%, depending on their income.
According to the independent Tax Policy Center research, the Biden regime’s “Build Back Better” spending package will increase taxes on several middle-class households. That’s despite the administration’s vow not to raise taxes on anybody earning less than $400,000 per year.
Build Back "Better" is the largest tax cut for the rich.
Pass it on.
— Byron Donalds (@ByronDonalds) November 18, 2021
However, when all of the key tax legislation is taken into consideration, the Tax Policy Center finds “about 20% to 30% of middle-income families would pay higher taxes in 2022.”
Those hikes would be modest, with the majority of low-and-middle-income households paying an additional $100 in taxes. Both during his presidential campaign and as president, Biden stated he would not raise taxes on middle-class families.
When addressing questions about President Biden’s domestic agenda in April, White House press secretary Jen Psaki reiterated the remark. However, it seems Biden is walking back his promise.