By Casey Harper (Center Square)
House Democrats have unveiled a litany of new tax proposals to fund President Joe Biden’s $ 3.5 trillion federal spending bill, but a new report says the spending plan will shrink the economy.
The University of Pennsylvania Business School, Penn Wharton, has released a new budget model based on the Democrats’ plan that proposes a major reduction in gross domestic product (GDP) in the coming years if the plan passes.
“Drafting a budget from the August 2021 Senate Reconciliation Structure that meets the Senate Reconciliation Rules (” Byrd Rule “) will require new spending cuts or large amounts of revenue (or both) after the 10-year budget window,” the report said. Has been said. “Such a potential reduction in spending would allow the new non-healthcare prudent spending provisions to expire after 2031. With this spending reduction in 2031, we propose that the reconciliation package will reduce GDP by 4.0 percent in 2050. Without reducing these costs (and where the Byrd rule is not satisfied), we plan a 4.8 percent fall in GDP by 2050.
The House Democrats on the Ways and Means Committee has unveiled a series of tax increases that will fund spending plans, including a new tax on tobacco and a capital gains tax increase.
The plan would include a 25% tax on dividends and capital gains, which would earn unmarried people more than ,000 400,000 a year or married couples 4 450,000. Republicans have argued that it violated Biden’s pledge, as it would pay one or two wives less than 400 400,000 in income tax.
Democrats also have the highest income tax rate.6. proposed to increase from% to .6..6%, which would hit income equal to capital gains tax.
Republicans have strongly condemned the tax increase, which would fund a long list of “human infrastructure” projects that they say are unnecessary.
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“It’s not about corporations or rich people, it’s about workers,” he told a House committee meeting on legislation earlier this week. “It’s about families and customers, retirees, and the community investing in our business. They carry the burden. They always carry a burden. ”
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Republicans also pointed to Penn Wharton’s report, arguing that deficit spending and tax increases violated Biden’s promises in the campaign.
Republicans in the House Wages and Mines Committee said in a statement, “President Biden promised not to deficit, citing the need to protect the economy – but this reconciliation package has led to a 9.9 percent increase in government debt.”
Penn Wharton has identified key spending items that would require a significant increase in federal revenue or a reduction in spending elsewhere to offset new spending.
“Health spending is the largest expenditure category and contains .42. Percent of new spending in the budget window,” the report said. “Health spending includes the expansion of Medicare benefits, the reduction of Medicare eligibility age, the expansion of the Affordable Care Act (ACA), and the enactment of price controls for prescription drugs. Policies such as energy subsidies and earned income tax credits and child tax credit extensions, spending on increasing labor productivity, including human capital investment policies such as pre-school and child care, are the next largest input categories in the 10-year budget window. 3.5 trillion received 13.2 percent of new spending.
One tax that has caught the attention of critics is a large tax increase on steam, tobacco, cigars and cigarettes. Opponents argue that the tax violates Biden’s promise to raise taxes on the rich because it would affect millions of Americans who pledged 400 400,000 a year.
The Democrats’ tax proposal document said, “This provision doubles the current rate of excise tax on cigarettes, small cigars, and your own tobacco.” “The provision varies from an ad price on large cigars to ও 49.56 per pound on a weight basis, but not less than 10.06 cents per cigar. This provision provides a greater increase in taxes on smokeless tobacco (e.g., tobacco, chewing tobacco and pipe tobacco) and New tax on individual single-use units at এক 100 each. Finally, the provision imposes an excise tax on ‘taxable nicotine’, any nicotine (except nicotine used in listed tobacco products) that has been extracted, concentrated or synthesized. “
Read more: Biden breaks US promise not to earn less than K 400K
Syndicated with permission from Center Square.