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U.S. Congress panel corrects tax rates for wealthy under Biden's proposal

Economy Nov 23, 2021 03:41PM ET
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© Reuters. FILE PHOTO: The U.S. Capitol building is seen in Washington, U.S., November 16, 2021. REUTERS/Elizabeth Frantz
 
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WASHINGTON (Reuters) - Americans with incomes over $1 million would see their taxes rise under President Joe Biden's "Build Back Better" bill, the U.S. Congress' Joint Committee on Taxation said on Tuesday, correcting an earlier analysis that their taxes would fall.

Under the bill passed last week by the House of Representatives and now being considered by the Senate, those with incomes of $1 million and more would be taxed at an average rate of 33.1%, up from the current 29.9%, the committee said.

A previous analysis pegged the proposed average tax rate dropping to 28.2%.

For those earning $500,000 to $1 million a year, taxes would fall to 27.2% under the bill, from the current $28.1%, instead of the previously reported reduction to 26.8%.

Some Democrats have criticized the $1.75 trillion bill expanding social programs and attacking climate change because it would reduce taxes on some wealthy Americans, even as it would raise them for other high-income earners and corporations to cover the cost of the measure.

Representative Jared Golden, the lone Democrat to vote against the House bill, expressed his opposition even with the corrected scoring.

"I objected and continue to object to the fact that the single largest part of this bill is a $275 billion tax giveaway to millionaires and the wealthy. Regardless of the net tax change, there’s no excuse for that provision being in this bill," Golden said on Twitter (NYSE:TWTR).

The Democratic bill, which is expected to be opposed by all Republicans in Congress, would loosen a $10,000 cap on the deduction of state and local taxes, known as SALT. The change would mainly benefit wealthy taxpayers in coastal states that are heavily Democratic.

The SALT cap was imposed under a tax reform law enacted in 2017 when Republicans controlled Congress and fellow Republican Donald Trump was president.

Senate Majority Leader Chuck Schumer is aiming to pass Biden's domestic investment bill by the end of this year. But first, moderate Democrats, including Senator Joe Manchin, are pushing for some revisions of the House-passed bill.

U.S. Congress panel corrects tax rates for wealthy under Biden's proposal
 

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