Finance

JCT releases score for House social spending bill

Tax-increase provisions in House Democrats’ latest version of their social spending package would raise nearly $1.5 trillion over 10 years, Congress’s tax scorekeeper said Thursday.

The analysis from the Joint Committee on Taxation (JCT) comes as House Democrats are hoping to pass the bill as soon as this week.

JCT’s score does not include revenue raised by providing the IRS more money for enforcement, or savings from drug pricing changes.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) told reporters that the JCT score indicates that the bill will be fully paid for when the tax increase, IRS and drug pricing provisions are all taken into account.

The Treasury Department said that after taking into account the IRS and drug-pricing provisions, the bill would include about $2.2 trillion in revenue-raisers. Treasury estimated that the IRS investments would raise $400 billion, and said that the prescription drug provisions would produce about $250 billion in savings.

“The investments and revenue provisions of the Build Back Better package would raise over $2 trillion in offsets, making the entire package paid for over ten years and would reduce deficits over the long term,” Treasury Secretary Janet Yellen said in a statement.

JCT estimates that the corporate and international tax provisions in the bill would raise about $814 billion. These provisions include a minimum tax on the profits of large corporations, an excise tax on stock buybacks, and changes to the international tax provisions in Republicans’ 2017 tax law.

Another $640 billion in revenue would be raised by tax increases on high-income individuals, JCT said, including provisions to create a surtax on multimillionaires’ income and to strengthen a tax on investment income created by ObamaCare.

House Democrats on Wednesday added a provision to the bill that would increase the cap on the state and local tax (SALT) deduction from $10,000 to $72,500 and would move the end date for the cap from 2025 to 2031. JCT estimated that this provision would be roughly revenue neutral over 10 years.

Changes to the SALT cap are important to lawmakers in high-tax states such as New York, New Jersey and California. But key Senate Democrats have offered a different approach to making changes to the cap, proposing instead to leave the limit at $10,000 but exempt taxpayers with income of under around $400,000 to $550,000.

In addition to producing revenue estimates for the tax-increase provisions, JCT also examined tax-cut provisions in the bill, such as tax incentives for affordable housing and green energy and one-year extensions of expansions of the child tax credit and earned income tax credit. JCT estimated that the tax-increase and tax-cut provisions on net would raise about $945 billion.

But JCT didn’t look at spending provisions in the bill unrelated to taxes. A full estimate of the cost of the bill will come later from the Congressional Budget Office (CBO). Some moderate House Democrats have been pushing for estimates from JCT or CBO prior to a vote on the House floor.

—Updated at 1:19 p.m.

Tags Build Back Better Climate change Janet Yellen Joint Committee on Taxation Richard Neal tax policy

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