Five Budget-Busting—Or Tax-Raising—Progressive Priorities Biden Left Out Of His American Families Plan


The $1.8 trillion American Families Plan is the Biden Administration’s sweeping agenda to shore up the care economy through investments in children, childcare, paid leave, education and workers that if enacted would be one of the biggest overhauls of economic policy in decades—but not every progressive policy priority made the cut.

Key Facts

The plan does not include an expansion of the Medicare program to cover those under age 65—something Democrats in Congress will continue to pursue as the legislation advances.

The plan excluded a broad cancellation of student loan debt, though it would make two years of community college free for everyone and increase grants for poor students.

A pure tax on wealth like the one championed by Sen. Elizabeth Warren (D-Ma.) was also excluded, though the plan does include a hike in the tax rate on capital gains and dividends from 20% to 39.6% for people earning more than $1 million—something experts say is easier to administer. 

There’s also no hike in the estate or gift tax rate—Biden’s campaign platform included returning the law to its 2009 state, when the top rate was 45% and the estate tax  exemption was $3.5 million per person (compared with 40% and $11.7 million today)—although Biden’s proposal to eliminate the “step-up” of assets in an estate does effectively raise taxes on big estates. 

And despite pressure from Democrats to make the expanded Child Tax Credit permanent, Biden’s plan only extends the expansion through 2025.

Big Numbers

Forgiving $50,000 in student loans per borrower (a popular Democratic policy proposal championed by Senate Majority Leader Chuck Schumer and Sen. Warren) would cost $1 trillion over a decade, according to a Brookings analysis. Forgiving $10,000 per borrower—Biden’s proposal—would cost $373 billion. The one year expansion of the Child Tax Credit for 2021 is expected to cost about $109 billion over the next decade, the Joint Committee on Taxation found, and the Wall Street Journal points out a permanent expansion of the credit could cost trillions of dollars. A 1% tax on wealth over $20 million per individual would raise $1.1 trillion over a decade, the Tax Policy Center estimated in 2019. Returning the estate, gift and generation skipping transfer taxes to their 2009 state would raise $218 billion over a decade, the Tax Policy Center figures

What We Don’t Know

What the final version of Biden’s plan will look like. Democrats must now begin the process of translating the administration’s ambitious goals into legislative text, and there will undoubtedly be revisions and negotiations along the way—especially given the party’s razor-thin majority in the Senate.

Further Reading

Here Are The Biggest Winners And Losers In Biden’s Individual Tax Plan (Forbes)

Biden Will Unveil $1.8 Trillion American Families Plan Today—Here’s What’s In It (Forbes)

Moderate Democrats Among 100 Lawmakers Urging Biden To Push Medicare Expansion (Forbes)

White House Defends Capital Gains Tax Hikes: Only 500,000 Households Will Pay More (Forbes)

Source link

Related Articles

[td_block_social_counter facebook="tagdiv" twitter="tagdivofficial" youtube="tagdiv" style="style8 td-social-boxed td-social-font-icons" tdc_css="eyJhbGwiOnsibWFyZ2luLWJvdHRvbSI6IjM4IiwiZGlzcGxheSI6IiJ9LCJwb3J0cmFpdCI6eyJtYXJnaW4tYm90dG9tIjoiMzAiLCJkaXNwbGF5IjoiIn0sInBvcnRyYWl0X21heF93aWR0aCI6MTAxOCwicG9ydHJhaXRfbWluX3dpZHRoIjo3Njh9" custom_title="Stay Connected" block_template_id="td_block_template_8" f_header_font_family="712" f_header_font_transform="uppercase" f_header_font_weight="500" f_header_font_size="17" border_color="#dd3333"]

Latest Articles