Politics

$2.9 Trillion In Tax Increases Slated For Reconciliation Bill

By Adam Andrzejewski for RealClearPolicy

The Democrats are on their own to try and pass a $3.5 trillion reconciliation bill known as the Build Back Better Act without Republican support, as it is a massive expansion of the social safety net and includes an increase in taxes.

five-page memo recently sent around by Hill aides shows $2.9 trillion in tax increases, the largest increase in decades.

About $1 trillion will come from raising taxes on high-income Americans, Fortune reported. Democrats would raise the tax rate for Americans making over $400,000 from 37 percent to 39.6 percent, where it was before President Donald Trump cut taxes in 2017. The top capital gains rate would also be increased from 20 percent to 25 percent.

There would be a 3 percent surtax on people with adjusted gross income over $5 million.

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Corporate tax rates for businesses with income over $5 million would increase from 21 percent to 26.5 percent. Small businesses with income below $400,000 would see their rate lower to 18 percent and all of those in between will have their rate remain the same, at 21 percent.

Democrats want to increase tax enforcement by the Internal Revenue Service as a way to pay for the cost of the package, CBS News reported, and close a $166 billion per year gap between what’s owed and what’s paid.

The proposal calls for banks reporting to the IRS when the total amount going in and out of an account annually reaches $600, not individual transactions like how the money was spent, USA Today reported.

American banking lobby groups are trying to kill the proposal, which they argue would create “reputational challenges” for large financial services firms, increase the cost of tax preparations for Americans and small businesses, and create serious “financial privacy concerns,” Reuters reported.

Syndicated with permission from RealClearWire.

The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.

RealClearWire

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