WASHINGTON — President Joe Biden’s Build Back Better package would raise, not lower, taxes for millionaires, according to the nonpartisan Joint Committee on Taxation in a major correction from the group’s original analysis.
The committee an official scorekeeper of tax-related legislation, originally estimated that the $1.7 trillion safety net and climate change bill would give millionaires a net tax cut in 2022, but the revised estimates released Tuesday show millionaires’ average tax rate going up by 3.2 percentage points next year.
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Nov. 18, 202105:25
The discrepancy stems from the bill’s changes to the state and local tax deduction — known as SALT — which Democratic leaders added at the last minute in order to secure the votes of lawmakers from New Jersey, New York and California. The bill would lift the cap on state and local tax deductions from $10,000 to $80,000.
The SALT cap was created by the Republicans’ 2017 tax bill and seen as a way to cut taxes on corporations while offsetting it with an increase on property owners in liberal-run states, where local tax rates were higher.
The committee’s analysis before the correction found that the SALT provisions would give two-thirds of people making more than a million dollars a year a tax cut.
“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,” its website said.
The new analysis shows the average tax rate for millionaires going up by 4.1 percentage points in 2023 and 3.3 percentage points in 2025.
Last week, the Democratic-controlled House passed the legislation aimed at expanding the social safety net and tackling climate change, a major step that moves a top legislative priority of Biden closer to his desk. The bill now heads to the Senate, which is hoping for a vote before Christmas.
Source: | This article originally belongs to Nbcnews.com
