Back in Joe Biden’s campaign, he vowed to raise the corporate income tax rate to 28% from 21%. In the end, the bill contains a less aggressive 15% corporate minimum tax.
The Build Back Better Act makes the transformative investments at the scale necessary to meet the needs of the American people, address dangerous deficits in our society, improve our economic outlook, and set America up to compete and win in the decades ahead.
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What ended up in the just-passed bill (which the Senate is likely to amend heavily) are narrower tax hikes – an increase on net investment income and a new surcharge on modified adjusted gross income.
The effort has been led by blue state lawmakers who’ve made “No SALT, No Deal” into a mantra.
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As the negotiations were winding down, somelawmakers released a statement saying the approach “will effectively eliminate the undue burden for nearly all of the families in our districts who’ve been unfairly double taxed for the last four years.”
In 2018, in the wake of the Trump tax giveaway, 91 companies in the Fortune 500 paid no federal taxes on their income and another 56 paid less than 5 percent. These firms could have used their tax windfall to raise wages, purchase new equipment, or invest in research and development.
Read more: How Biden’s $1.75 trillion Build Back Better Plan Could Impact Tax-Paying Americans?
“What concerns me,” Gordon Gray, director of fiscal policy at the American Action Forum says, is that these taxes are all devoted to new spending, so “the cupboard, for want of a better term, will be a little bare the next time members of Congress decide to maybe get around to that grand bargain that we’ve been hearing about for so long.”
Gray is a former senior advisor to Sen. Rob Portman (R., Ohio) and staff member for the Senate Budget Committee. Gray doesn’t see many options, but “my experience has proven that no idea ever truly goes away in Washington, DC.”
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He said some future debt reduction deal will need to include entitlement reform, “not just for the green eyeshade crowd, of which I am certainly a proud member, but also just for their own sake.”
The U.S. national debt currently stands at nearly $29 trillion with an annual budget deficit nearing $3 trillion.
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