The Build Back Better Act is fiscally responsible. It reduces the deficit over the long-term. It’s fully paid for by making sure that the wealthiest Americans and biggest corporations begin to pay their fair share in federal taxes. It keeps my commitment that no one earning less than $400,000 a year will pay a penny more in federal taxes. – President Joe Biden, November 19, 2021
Lie #1 – “It reduces the deficit over the long-term.”
“Here’s what the American Families Plan doesn’t do: It doesn’t add a single penny to our deficit.” – President Joe Biden, May 3, 2021
This one is pretty simple. President Biden has spent the better part of a year repeatedly telling the American people that his spending plans are fully paid for and would not increase the deficit. The Congressional Budget Office (CBO) says that this claim is demonstrably false.
According to CBO’s analysis, Presidents Biden’s socialist spending bill would increase the deficit by $367 billion over ten years. That is equal to $1,100 in new borrowing for every person in America. Because the spending in the bill is frontloaded and the offsets come in the later years, the first five years of the bill will actually increase the deficit by $791 billion.
Any way you cut it, CBO’s analysis clearly shows this bill will increase the deficit by hundreds of billions. President Biden’s claim that his social spending bill would be fully funded without deficit spending should be measured as one of the biggest political whoppers in recent history.
Lie #2 – “It’s fully paid for by making sure that the wealthiest Americans and biggest corporations begin to pay their fair share in federal taxes.”
“I’m sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes. It’s time for it to change.” President Joe Biden, September 22, 2021
When President Biden and liberals in Congress repeatedly claimed that the rich would “pay their fair share,” most Americans probably thought the President was talking about a tax hike on America’s wealthiest citizens. In reality, the tax and spending bill gives the top 1% a big tax break.
The bill dramatically raises the federal tax deduction for state and local taxes paid. This huge tax cut for the wealthy was capped during tax reform in 2017. The deduction is now being beefed up under the Democrats’ new legislation in order to appease rich benefactors in blue states like New York and California where state and local taxes are the highest.
As a result of this big new tax cut, 87% of people making between $500,000 and $1 million would see a tax cut of over $500 in 2022 according to the non-partisan Congressional Joint Committee on Taxation (JCT). By comparison, only 28% of people making between $30,000 and $40,000 will receive any tax cut in the same year.
Democrats will point out that their tax cut for the rich is “paid for” by extending the new, $80,000 deduction cap through 2030 and reinstating the $10,000 limit afterwards until 2032. Since the current, $10,000 limit is set to expire in 2026, this new date change acts as an offset on paper. The argument ignores the reality that the $10,000 limit was made temporary in order to fit within the constraints of reconciliation. Dozens of personal tax provisions expire at the same time and will be addressed by a future Congress. What we do know as a matter of fact is that the House-passed bill cuts taxes by $222 billion over the next four years and the majority of those tax cuts go to the rich.
In any event, Democratic rhetoric cannot change the fact that their bill provides an immediate tax cut to the top 1%. After years of telling Americans the rich would see higher taxes, President Biden and Democrats in Congress are handing the rich a windfall tax cut.
Lie #3 – “It keeps my commitment that no one earning less than $400,000 a year will pay a penny more in federal taxes.”
“Anybody making less than $400,000 a year will not pay a single penny in taxes.” – President Joe Biden, May 3, 2021
President Biden has consistently claimed that no American making less than $400,000 a year would see any tax increase under his plan. Analysis of the House-passed bill by the non-partisan Congressional Joint Committee on Taxation (JCT) shows the President was not telling the truth.
JCT distributional analysis shows that even with an increased child tax credit included in the bill, many people making between $50,000 and $200,000 will be subject to tax increases starting as early as 2023. That year, 25% of all Americans earning between $75,000 and $100,000 will see a tax increase according to Congress’ non-partisan tax analysts. Because of timing gimmicks used in the bill to push off tax increases, that number grows to 50% by 2029.
President Biden has been crystal clear that his bill would not raise a “penny” of taxes on anyone making under $400,000. As the simple table below demonstrates, the bill is not only a hike on a percentage of people making under $400,000, but also a net tax increase over ten years on those making between $75,000 and $200,000. This data from JCT exposes an obvious lie from the President that should not go unchallenged. The American people deserve to know the truth.
