Following is a statement by Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding President Biden’s remarks on the American Families Plan.
“Longstanding inequities, deepened by the pandemic, mean that too many American families and communities are struggling. The American Families Plan makes long-overdue investments that will dramatically broaden access to childcare, preschool, paid leave and higher education so that parents can work, and kids can enter school more ready to learn and leave school with better career prospects. These transformational investments will improve lives and make today’s young people better off now and well into the future.
“Biden’s proposals to pay for these provisions are well targeted toward those most able to pay.
“The plan is estimated to raise $700 billion from those who don’t pay the taxes they owe under the law, by better funding the IRS to pursue tax evasion. The proposal includes revenue-raising initiatives that are well-targeted to those with very high incomes: raising the top marginal income tax rate for the top 1 percent, ending capital gains breaks for millionaires and closing loopholes in Medicare taxes paid by the rich under the Affordable Care Act.
“In addition to the groundbreaking education and childcare improvements, the American Family Plan makes the Child Tax Credit available to nearly all children, correcting a past inequity and dramatically slashing child poverty. It also increases the size of that credit until 2025 and boosts the Child and Dependent Care Tax Credit and the Earned Income Tax Credit, while unfortunately leaving children who lack social security numbers out of the CTC. The tax credit expansions will relieve poverty and dramatically improve the lives of children and parents, particularly for those who struggle financially.
“The Biden administration could have gone further – by strengthening the estate tax and repealing the Trump law’s deduction for pass-through business income, for example. Nonetheless, this plan will transform lives, improve equity, and make our economy and our families stronger for decades to come.”