President Joe Biden’s massive $1.85 trillion spending bill would give most millionaires in the U.S. a tax cut, according to the Tax Policy Center.
The Build Back Better proposal would allow nearly two-thirds of the upper class to pay less in taxes this next year if it passes, the research firm found. Among those making more than $1 million per year, only 34.2% would see their taxes increase.
Additionally, nearly 80% of those earning between $500,000 and $1 million per year would see their tax bill shrink by an average of about $6,000 per year.
Only those in the very top 1%, the ultrawealthy and billionaires, would pay more under the law, the analysis said.
Meanwhile, a good chunk of the middle class would see their taxes increase. Low- and middle-income households would pay an additional $100 or less on average. Those making $200,000-$500,000 would pay an average of about $230 more.
The reason millionaires would get a tax break under Build Back Better is because Democrats have proposed raising the deduction cap for state and local taxes (SALT) to $80,000. Right now, that cap is set at $10,000. The SALT deduction allows high-income residents in high-tax areas to deduct state and local taxes from their federal tax bills.
Raising the SALT deduction cap will have almost no benefit at all for the vast majority of U.S. households, the Tax Policy Center argued. It would, however, cut 2021 taxes for the top 1% of earners by an additional $1,000.
Several progressives have come out against this proposal, arguing it undercuts Biden’s vow to make the wealthy “pay their fair share.”
“This is beyond unacceptable,” Sen. Bernie Sanders, I-Vt., said in a statement. “I am open to a compromise approach which protects the middle class in high tax states. I will not support more tax breaks for billionaires.”
