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Biden's Spending Bill Enriches Blue State Elites, Hits Middle-Class with Tax Hike

Build Back Better legislation includes multi-billion dollar tax cut for Dem state fat cats

 on 22nd November 2021 @ 9.00pm
joe biden s plan will hurt the middle class while enriching blue sate elites © press
Joe Biden's plan will hurt the middle-class while enriching blue sate elites

Democrat Joe Biden's radical "Build Back Better" spending bill will enrich wealthy elites living in Democrat-controlled states while hitting a big chunk of America's middle-class with tax hikes.

Biden’s social spending legislation, which passed in the House on Friday, is the cornerstone of his agenda.

However, the bill includes provisions that hike state and local tax deductions.

The move will overwhelmingly favor the wealthy in Democrat-run states while raising taxes on up to 30% of middle-class earners.

In 2017, President Donald Trump signed a tax bill into law that capped the amount of state and local taxes that one could deduct from their federal tax bill at $10,000.

Before the cap, all state and local taxes (SALT) could essentially be deducted from the federal tax bill.

president trump signed a bill to tax claims © press
President Trump signed a bill to tax claims

Trump's tax cap is set to expire in 2025.

According to The Washington Post, Biden’s social spending bill raises the SALT cap to $80,000 until 2031 before dropping back down to $10,000.

The benefits of such a maneuver would accrue mostly to wealthy individuals living in deep blue, high tax states.

According to a 2017 report on SALT deductions by the Tax Foundation: “The state and local tax deduction … expressly favors higher-income earners and state and local governments which impose above-average tax burdens.

"The deduction’s effect is for lower- and middle-income taxpayers to subsidize more generous spending in wealthier states like California, New York, and New Jersey, reducing the felt cost of higher taxes in those states.”

In total, the SALT cap raises in Biden’s Build Back Better legislation is equivalent to a “$285 billion tax cut that would almost exclusively benefit high-income households over the next five years,” according to the Post.

At the same time, the social spending bill also targets the middle class, hiking taxes on 20% to 30% of households making less than $400,000 a year.

According to a report from the nonpartisan Tax Policy Center, Biden’s “Build Back Better” spending bill would raise taxes on many middle-class families.

The move comes despite Biden’s promise to not raise taxes on anyone making [less] than $400,000 per year.

The report found that in the year 2022, when looking at direct taxes only — that is, individual income taxes and payroll taxes — most American families in all income groups except the top 1% would see a tax cut.

But when all of the major tax laws are taken into account, TPC reports that “roughly 20 percent to 30 percent of middle-income households would pay more in taxes in 2022.”

joe biden promised that he wouldn t increase taxes on the middle class © press
Joe Biden promised that he wouldn't increase taxes on the middle-class

Those increases would be small, with most low and middle-class families paying about $100 more in taxes.

Biden, both during his campaign and in office, has pledged to not raise taxes on the middle class.

White House Press Secretary Jen Psaki repeated the claim in April while fielding questions on Biden’s domestic agenda.

[RELATED] JPMorgan Chase CEO Warns America: Prepare for 'Catastrophic' U.S Credit Default

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tags: Joe Biden | economy
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