Congress is currently debating policy proposals built around President Biden’s Build Back Better Agenda. The president has proposed sweeping policy reforms, including tax changes that would raise taxes for the highest-income households and expand tax credits for low-income households as well as most families with children. ITEP continues to analyze proposed tax changes when enough data are available to do so.
Most recently, the House of Representatives passed its version of the Build Back Better Act, moving the legislation to the Senate for debate. Amy Hanauer, ITEP’s executive director wrote about this critical step in a Nov. 19 blog post, House Passage of the Build Back Better Bill Moves America’s Tax Code in the Right Direction. Just after taking office, the president committed to ensuring more federal data are disaggregated by race so that policymakers could craft policy solutions that address longstanding racial inequities. ITEP produced a report that outlines how limiting tax breaks for capital gains would mitigate the racial wealth gap, and how expansions to the Child Tax Credit and the Earned Income Tax Credit would benefit large percentages of families of all races.
Below are various analyses that ITEP has produced as debate over the Build Back Better legislative agenda has evolved.
Analysis of the House of Representatives’ Build Back Better Legislation
This combined analysis reveals the distributional impact of proposed tax increases for the highest income households and the expansion of the Child Tax Credit and Earned Income Tax Credit.
Proposals to Raise Revenue from High-Income Individuals
Key Reform in Build Back Better Act Would Close Loophole Used by the Rich To Avoid Funding Healthcare
An analysis of the Build Back Batter Act’s provision requiring high-income owners of certain pass-through businesses to pay either the 3.8 percent net investment income tax (NIIT) or the 3.8 percent Medicare employment tax on their income. Some high-income people are avoiding this tax under current law.
How Biden’s Plan Would Crack Down on Wealthy Tax Evaders
This blog explains how increased IRS funding is a commonsense reform that would ensure wealthy people, who are most likely to evade taxes, pay a fairer share. More funding would allow the IRS to enforce existing tax law.
Senators Menendez and Sanders Show the Way Forward on the SALT Cap
This analysis shows the a Senate proposal to repeal the SALT cap for households earning $400.000 or less and phase it out for higher-income households is less costly than fully repealing the $10,000 cap on SALT deductions. Proposals to Expand Tax Credits for Families and Workers
Proposals to Expand Tax Credits for Working Families
Tax Credit Reforms in Build Back Better Would Benefit a Diverse Group of Families
National and state-by-state figures reveal the positive effects of the Child Tax Credit and Earned Income Tax Credit on families of all races.
A Data-Driven Case for the CTC Expansion in the Ways and Means Committee’s Recent Proposal
ITEP analyzed the number and share of children nationally and in each state who would benefit from extending provisions making the CTC fully refundable. Nationally, 27 million children, or 35 percent, would benefit.
Child Tax Credit Is a Critical Component of Biden Administration’s Recovery Package
The American Rescue Plan Act expanded the Child Tax Credit by ending the rules that prevented poor families from receiving the full credit, increasing the credit amount for most families, and expanding the credit to include 17-year-olds who were previously ineligible—but all these changes were made only for one year, 2021. The president’s plan would extend these changes.
Nearly 20 Million Will Benefit if Congress Makes the EITC Enhancement Permanent
The EITC is designed to reward work and alleviate poverty but until now has offered very little help to adults without children in the home. The president proposes to make permanent the expansion of the EITC that was included in the American Rescue Plan Act.
Proposals to Increase Taxes Paid by Most Profitable Corporations
The Build Back Better agenda would bring more fairness to the tax code by requiring the most profitable corporations to pay more of what they owe. The following provides more information on the corporate tax.
55 Corporations Paid $0 in Federal Taxes on 2020 Profits
This report is the result of a careful examination of corporate tax filings. It finds that 55 of the largest, profitable U.S.-based corporations paid no federal income taxes in their most fiscal year.
Report Illustrates How 70 Corporations Could Be Affected by Minimum Tax Proposal in the Build Back Better Act
Sen. Elizabeth Warren released a report using ITEP data to reveal how some of the most profitable corporations could be affected by the 15 percent Corporate Profits Minimum Tax (CPMT) being debated in Congress.
Senate Democrats’ Corporate Minimum Tax Could Address the Worst Corporate Tax Dodging
This blog outlines how a proposal to institute a 15 percent corporate minimum tax would be a major step toward addressing the perennial challenge of profitable corporations paying $0 in federal income tax.
Democrats Seek to Eliminate the Stock Buyback Advantage
An analysis of the provision in the Build Back Better framework that would remove tax advantages for corporations that transfer profits to their shareholders through stock buybacks rather than dividends.
Corporate Tax Avoidance Under the Tax Cuts and Jobs Act
In a follow-up to the report on 2020 corporate tax avoidance, this report examines corporate tax-paying habits in the first three years of the TCJA. It finds that 39 corporations altogether avoided taxes on average over the three years and another 73 corporations paid less than half the statutory rate of 21 percent on average over the three-year period.
Why Congress Should Reform the Federal Corporate Income Tax
This report details how the use of offshore tax havens and other special breaks and loopholes allow the most profitable corporations to pay nothing, or next to nothing, in taxes.