July 30, 2022
Millions of Americans making less than $400,000 a year would see their taxes rise
Washington, DC — The nonpartisan Joint Committee on Taxation (JCT) estimates that Democrats’ latest reckless tax and spending proposal will raise taxes on millions of Americans in all income brackets, with more than half of the tax increases on Americans doing less. over $400,000 a year.
“While the Republicans’ pro-growth tax reform in 2017 lowered tax rates for all Americans in a way that increased the progressivity of the tax code and produced historic gains in jobs and wage growth , the Democrats’ approach to tax reform means raising taxes on low- and middle-income Americans to fund their partisan Green New Deal,” said Mike Crapo (R-Idaho), ranking member of the US Senate Finance Committee, which requested the analysis. “Americans are already experiencing the consequences of the Democrats’ reckless economic policies. The mislabeled ‘Inflation Reduction Act’ will do nothing to lift the economy out of stagnation and recession, but it will raise billions of dollars in taxes on Americans making less than $400,000.”
According to JCT:
In 2023, taxes will rise by $16.7 billion on American taxpayers making less than $200,000, a nearly $17 billion tax targeted solidly at low- and middle-income earners next year, amid a stagflation The $17 billion hit alone is confirmation that Biden’s promise not to raise taxes on anyone making less than $400,000 is broken by the latest tax and spending bill. The proposal would raise another $14.1 billion from taxpayers making between $200,000 and $500,000. According to JCT data, 98 percent of all tax returns filed by people in the $200,000 to $500,000 bracket are filed by those earning between $200,000 and $400,000, with at least three-quarters of the income from $200,000 to $500,000 category. $400,000, meaning that at least half of the new tax revenue collected next year is likely to come from those earning less than $400,000. Over the ten-year period, the average tax rate for almost all income categories would increase. By 2031, when new green energy credits and subsidies provide an even greater benefit to higher earners, those earning below $400,000 are projected to bear up to two-thirds of the burden of additional tax revenue collected this year.
“The more this bill is analyzed by unbiased experts, the more we can see that Democrats are trying to sell the American people a bill of goods,” Crapo continued. “Nonpartisan analysts confirm that this bill raises taxes on the middle class and produces no significant reduction in the deficit when the cheats are removed and the total cost is accounted for. No wonder this bill, which was drafted behind closed doors, is moving through the Senate at a record pace.”
To view JCT’s distributional analysis, click here. To view the JCT income table, click here.
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