Inflation Reduction Act drops most of Biden’s proposals to tax the rich
by Tobias Burns - 08/04/22 5:15 AM ET
The deal struck last week by Sens. Charles Schumer (D-N.Y.) and Joe Manchin (D-W.Va.), a slimmed-down version of the Build Back Better Act, leaves out most of President Biden’s proposals to pull in greater government revenues from rich taxpayers.
Increases in individual income tax rates for high earners, increases in the estate tax, increased taxes on capital gains like stock and property holdings, a tax on billionaires, a plan to build out the net investment income tax and a surtax on high-income households are plans that have been scrapped from the Inflation Reduction Act.
“The administration proposed many, many tax increases that aren’t reflected in this legislation,” UCLA tax economist and former tax analyst for the Treasury Department Kimberly Clausing said Wednesday on a call with reporters.
“This past November, [there was] a version of this legislation that was broader and that would have included a lot more tax increases, including the net investment income tax provision, [which is] a very important loophole that hopefully Congress will close someday,” she added.
Among the many proposals nixed from the current legislative package is a plan to restore the top income tax rate of 39.6 percent, brought down to 37 percent by the Trump administration’s Tax Cuts and Jobs Act of 2017, as well as a 3 percent surtax on taxpayers with income of $5 million or more put forward by the House Ways and Means Committee in 2021.
Also missing is a plan to increase taxes on investment earnings, known as capital gains, to 25 percent, as well as an expansion of the net investment income tax, more than half of which would have been paid for by the top 0.1 percent of taxpayers, according to an analysis by the Tax Policy Center, a Washington think tank.
“President Biden, in his campaign, in his budgets, proposed a substantial amount of tax increases on high-income people,” analyst Howard Gleckman of the Tax Policy Center said in an interview. “It included this idea of expanding the net investment income tax, which was a provision in the 2010 Affordable Care Act that would have extended a 3.8 percent tax to certain kinds of businesses that were not subject to the original one.”
“The finance committee people were moving along on the net investment income tax,” he added. “I mean, that required some background work to do, and they were doing that. They were under the impression that this was going to happen. And then suddenly it didn’t.”
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https://thehill.com/policy/3586697-inflation-reduction-act-drops-most-of-bidens-proposals-to-tax-the-rich/
