After a months-long negotiation with his party’s most moderate senators, Joe Biden unveiled a framework for a slimmed-down version of his Build Back Better agenda on Thursday. EricLevitz writes on its good, bad, and ugly aspects
Photo: Susan Walsh/AP/Shutterstock The White House’s quest for a legislatively viable version of its Build Back Better agenda has officially reached the “fake it till you make it” stage.
With that said, the $1.75 trillion framework gives us a sense of Biden’s endgame. It’s unlikely that the White House would have released this document if it didn’t believe that the final version of Build Back Better would roughly approximate it. Therefore, the outline is worth evaluating on its own merits. It has good, bad, and ugly aspects.
Establish a de facto basic income for working-class families. Previously, Biden’s American Rescue Plan increased the maximum value of the child tax credit from $2,000 to $3,000 for each child over 6 and $3,600 for each child below that age. Separately, ARP made the child tax credit fully refundable for the first time, meaning that kids whose parents earned too little to owe federal taxes would still be eligible for CTC payments.
Make the tax code slightly fairer. The framework would not raise the corporate tax rate, but it would make it harder for large, profitable firms to nullify their obligations to Uncle Sam through tax credits and creative accounting. Under Biden’s proposal, companies with over $1 billion in profits will need to pay a minimum 15 percent tax on the profits they report to their shareholders. Firms would also face a one percent surcharge any time they bought back their own shares.
The bad. But even when considered in the context of the Democrats’ narrow majorities, two aspects of the Build Back Better framework are dismaying: Thursday’s framework doesn’t include a lifting of the cap on the state and local income tax deduction, a top demand from House Democrats who represent affluent, blue-state constituencies. But the Democratic leadership says that an expansion of that deduction will be a part of the final legislation. So Biden’s bill could very well lower the tax burdens of some Americans in the top 2 percent of the income distribution.
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