Democratic lawmakers on the House Ways and Means Committee have advanced legislation containing the tax elements of President Biden’s Build Back Better agenda. The draft legislation could be modified by the House Rules Committee before moving to the House floor and may differ from what Senators are preparing. This analysis contains estimates of the tax legislation as introduced by the House Ways and Means Committee.
Using the Tax Foundation General Equilibrium Model, we estimate that the House Ways and Means proposals would increase federal revenues by about $2.1 trillion over the next decade, before accounting for $1 trillion in expanded tax credits for individuals and businesses, resulting in a net revenue increase of about $1.06 trillion. Excluding tax revenue from increased tax compliance, the proposals would raise $862 billion over ten years.
We estimate that the Ways and Means tax proposals would reduce long-run economic output by 0.98 percent and eliminate 303,000 full-time equivalent jobs in the United States. It would also reduce after-tax incomes for the top 80 percent of taxpayers over the long-run.
By Alex Durante, Cody Kallen, Huaqun Li, William McBride, Alex Muresianu, Erica York, Garrett Watson
Read Original Article on TaxFoundation.org
