The following is a statement from Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, regarding the House of Representatives passing the Build Back Better plan.
“The Build Back Better plan that the House passed today will transform the country and make our tax code more progressive, more equitable and better able to pay for crucial priorities.
“The plan raises revenue from wealthy people and corporations to pay for investments that the country needs. It provides tax credits for middle- and low-income families that raise incomes and dramatically reduce poverty. Together these elements create a much better tax system.
“The tax increases in this plan will enable America to support our families and communities in ways that will pay off for decades to come. The bill includes much-needed funding for childcare, pre-K, paid family leave, health care and climate infrastructure. These investments will better prepare the country for challenges of the future. The refundable tax credits correct for historic inequities, bringing the full child tax credit to more children of all races and particularly to Black, Hispanic, Indigenous and immigrant children who had been disproportionately left out.
“Crucial revenue provisions in the bill include a 15% minimum tax on corporations, corporate international tax reform, a surtax on multi-millionaires and billionaires, closing of a loophole that allowed some wealthy people to avoid paying for healthcare, and enhanced funding to the Internal Revenue Service that will enable better tax enforcement on the very wealthy and corporations. These essential reforms begin to correct problems in the tax code such as corporate tax avoidance and low rates for the very wealthy.
“The Senate should improve the bill by rejecting the provision that lifts the cap on state and local tax deductions to $80,000 and replacing it with a better compromise that lifts the cap only for those earning under $400,000 (with a phase-in for earnings between $400,000 and $500,000). Other positive reforms from President Biden’s initial proposal were removed from this version and should be pursued, either in the Senate version or in subsequent legislation. This includes equalizing taxes on earnings from work and wealth, raising top rates and taxing unrealized capital gains. Congress should also continue to push for tax fairness and loophole closing in future legislation. But today was an enormous step forward for the country.
“As a result of the Build Back Better plan, the wealthiest Americans and the largest most profitable corporations will pay more, while low- and middle-income families will get help paying for the basics. These are powerful changes in the right direction for America’s tax code.”