Bills Beyond Relief

Update 515: Bills Beyond Relief:
Paying For the Road to Recovery

Now that President Biden’s $1.9 trillion relief bill, the American Rescue Plan (ARP), has officially been signed into law and almost entirely deficit-financed, focus is shifting to a new multi-trillion dollar package centered on infrastructure: The Recovery Act. Some are calling for revenue offsets to pay for new spending and statutory PAYGO rules impose constraints as well. 

The economy is struggling and raising taxes at this juncture could impede the recovery. To the extent possible, pay-for requirements should be waived or enforcement delayed. But the approaching question of whether, when, and how to pay for this package is one to be considered and we do so, below.

Good weekends all,

Dana

———————

Exact details of Biden’s highly anticipated infrastructure package are expected in April. Rep. DeFazio of House Transportation and Infrastructure and Sen. Carper of Senate Environment and Public Works are seeking to pass versions through their committees in May. Per topline figures released by the Biden White House, the bill’s overall price tag will likely exceed $2 trillion

For the last several years, “infrastructure week” has been a running punchline in Washington, but the need for improved infrastructure is no joke. The American Society of Civil Engineers grades the United States’ infrastructure as a C-minus and estimates that $2.6 trillion in new investment is needed over the next decade to close the long-term investment gap. 

Biden’s plan would close this gap significantly, but given the recent passage of the $1.9 trillion ARP and a projected 2021 budget deficit of $2.3 trillion, many Democrats have requested revenue offsets to partially pay for new infrastructure spending. While pay-fors seemingly frustrate progressive policy, Democrats in this Congress have an opportunity to advance a progressive agenda and make the Tax Code fairer, undoing some of the most inequitable provisions of the 2017 Republican tax cut law. 

Infrastructure Pay-fors

During the campaign, Biden proposed a series of changes to the Tax Code that would raise $2.1 trillion over the next decade. Biden will likely draw from these proposals when assembling pay-fors for the infrastructure bill, although he is expected to only call for about $1 trillion in new taxes. Regardless, Congress might be hesitant to raise taxes given the weakened labor market and economy.

Even if reconciliation is used to avoid paying for short-term costs, the extensive timeframe of infrastructure spending will require revenue increases beyond a 10-year budget window. Compliance with statutory PAYGO requires budgetary offsets later this year or legislation to delay sequestration of mandatory programs — which could affect how much revenue Democrats will try to raise. The good news is that there is an abundance of revenue options that could raise the needed funds and fix inequities in the Tax Code. 

  • Raise Corporate Tax Rate to 28 percent: The 2017 TCJA slashed the marginal corporate tax rate from 35 to 21 percent. However, most large corporations get away with paying a much lower effective rate due to loopholes. Biden proposes lifting the rate by seven percent, generating around $700 billion in revenue over the next decade. Using higher corporate taxation to pay for greater investment in infrastructure would have a net positive effect on economic growth. While each dollar in increased corporate tax revenue would decrease economic activity by a projected 32 cents, every dollar put into transportation spending would increase economic activity by 1.29 dollars. 
  • Country-by-country minimum tax: This proposal would replace the TCJA’s Global Intangible Low-Taxed Income (GILTI). GILTI requires multinational companies pay at least 10.5 percent on foreign income generated from intangible assets held abroad, with a blanket 21 percent tax rate on profits earned by foreign subsidiaries of U.S. firms. This would recover an estimated $442 billion over the next 10 years. 
  • Minimum global book income tax: This proposal would institute a 15 percent minimum tax on corporations with at least $100 million in annual income. However, when calculating this new minimum tax, corporations would still be allowed to deduct losses carried forward from previous years and foreign taxes paid. This change would raise an estimated $109 billion over the next 10 years. 
  • Repeal Pass-Through Deduction (PTD): While ordinary citizens have to pay their income taxes in full, in the TCJA, Republicans granted partnerships and sole proprietors a 20 percent deduction on their qualified business income. Scheduled to sunset in 2026, the PTD constituted the biggest giveaway to the ultra-wealthy, with nearly half of the tax benefit going to the top one percent of households. The Congressional Research Service found that this tax provision had no discernible effect on job growth. Accelerating its sunset would save American taxpayers $342 billion
  • Restore 2009 Estate Tax Levels: Over three decades, Republican lawmakers have made a concerted effort to chip away at the estate tax. Currently, only estates of over $11.5 million are taxed at a paltry 40 percent, not taking into account rampant estate tax avoidance. With historic levels of wealth inequality, now is the perfect opportunity to rebalance the economic scales by curbing further asset accumulation. Taxing estates of over $3.5 million at the previous rate of 55 percent with strong enforcement would generate $268 billion over the next decade. Only 0.2 percent of households would be affected by this tax change.
  • Close the Carried Interest Loophole: Currently, private equity and hedge fund managers are allowed to take advantage of the preferential 20 percent capital gains rate on income received as compensation, rather than the ordinary top income tax rates of 37 percent. In the wake of private equity-owned nursing homes being implicated in the deaths of more than 20,000 senior citizens, congressional Democrats are determined to crack down on this absurd tax privilege. Rep. Bill Pascrell recently reintroduced the Carried Interest Fairness Act and more legislation on this issue may soon follow. The CBO estimates this tax change would generate $14 billion of revenue over the next decade.

Political and Legislative Challenges 

Any change to the Tax Code — particularly when it comes to tax increases — is a difficult political lift. Each tax provision has an army of lobbyists seeking to protect the status quo, and tax increases often involve technical challenges such as whether to implement it immediately or phase it in gradually. 

Biden and some members of Congress have expressed a desire to include Republicans in formulating the infrastructure package. But despite both parties having expressed interest in infrastructure in the past few years, producing a bipartisan bill through regular order would be exceedingly difficult. While moderate Democrats have called for pay-fors, Republicans express strong opposition to any tax increases. Given this, Democrats will likely use the FY 2022 reconciliation bill as a vehicle for infrastructure. Another possibility, as White House chief of staff Ron Klain suggested to Congressional Progressive Caucus members, could be to break up the bill into smaller pieces, passing some with bipartisan support through regular order and the rest via reconciliation.

Restoring the Economy, First

President Biden campaigned on an America built back better, and a critical part of that project is recovering some of the revenue lost from decades of regressive tax policy. At the same time, PAYGO compliance and tax policy in 2021 should avoid running countercyclically. To everything there is a season, but there is no need to make inflation or deficits later the enemy of recovery in the meantime. 

182 thoughts on “Bills Beyond Relief”

  1. Hmm it appears like your blog ate my first comment (it was extremely long) so I guess I’ll just
    sum it up what I wrote and say, I’m thoroughly enjoying
    your blog. I too am an aspiring blog writer but I’m still new to everything.
    Do you have any helpful hints for first-time blog writers? I’d definitely appreciate it.
    0mniartist asmr

  2. For newest information you have to go to see world wide web and on internet I found this site
    as a most excellent web site for newest updates.
    0mniartist asmr

  3. I will right away clutch your rss feed as I can’t to find your e-mail subscription hyperlink or e-newsletter service. Do you have any? Please allow me realize so that I may subscribe. Thanks.

  4. Ahaa, its pleasant dialogue on the topic of this piece
    of writing here at this website, I have read all that, so now me also commenting at this place.

  5. Hi there just wanted to give you a quick heads up.
    The text in your content seem to be running off the screen in Internet explorer.
    I’m not sure if this is a formatting issue or something to
    do with internet browser compatibility but I figured I’d post to let you know.
    The style and design look great though! Hope
    you get the problem fixed soon. Cheers

    My webpage – gem Epicwin (https://918Kiss-m.com/epicwin)

  6. I was wondering if you ever considered changing the page
    layout of your blog? Its very well written; I love
    what youve got to say. But maybe you could a little more in the way of content so
    people could connect with it better. Youve got an awful
    lot of text for only having one or two pictures. Maybe you could space it out
    better?

  7. I was recommended this web site by my cousin. I am
    not sure whether this post is written by him
    as no one else know such detailed about my problem.
    You are incredible! Thanks!

  8. Hmm it looks like your blog ate my first comment
    (it was extremely long) so I guess I’ll just sum it up what I had written and say, I’m thoroughly enjoying
    your blog. I as well am an aspiring blog writer but I’m still
    new to everything. Do you have any points for novice blog
    writers? I’d genuinely appreciate it.

  9. I got this web site from my buddy who told me regarding
    this web site and now this time I am browsing this website and reading
    very informative articles here.

  10. Howdy very nice blog!! Guy .. Beautiful .. Wonderful ..
    I’ll bookmark your website and take the feeds also? I’m happy to search out a lot of helpful information here in the submit, we want work out extra techniques on this regard, thanks for sharing.
    . . . . .

  11. I enjoy what you guys are up too. Such clever work and reporting!
    Keep up the very good works guys I’ve added you guys to my
    personal blogroll.

  12. Thanks a lot for sharing this with all of us you actually recognise what you’re speaking about!
    Bookmarked. Please additionally visit my web site =). We may have
    a hyperlink change contract between us

  13. Its like you read my mind! You seem to know so much about this, like you
    wrote the book in it or something. I think that you could do with a few pics to drive the message home
    a little bit, but instead of that, this is wonderful
    blog. An excellent read. I’ll definitely be back.

    Feel free to visit my homepage … benjamindinh.fr

  14. You could certainly see your expertise in the article you write.
    The sector hopes for even more passionate writers like you who aren’t afraid to say how they believe.
    Always go after your heart.

    Feel free to surf to my web blog: 163.30.42.16

  15. I want to express my love for your kind-heartedness for folks who should have assistance with that field.
    Your special commitment to passing the message all through had been surprisingly
    good and has continually helped others just like me to reach their aims.
    Your amazing useful guidelines implies a great deal to me and additionally to my
    colleagues. Many thanks; from all of us.

    My web blog … 39.104.22.11

  16. Its like you read my mind! You seem to know a lot approximately this, like you wrote the e-book in it or something.

    I feel that you just could do with a few % to
    force the message home a little bit, but
    other than that, this is magnificent blog.

    A great read. I will certainly be back.

    Check out my site … atomy123.cn

  17. You could certainly see your enthusiasm in the work you write.
    The world hopes for even more passionate writers like you who are not afraid to
    say how they believe. At all times go after your heart.

  18. magnificent post, very informative. I ponder why the other
    experts of this sector don’t notice this. You should continue your writing.
    I’m confident, you have a great readers’ base already!

    Feel free to visit my web site kebe.top

  19. The other day, while I was at work, my sister stole my apple ipad and tested
    to see if it can survive a 30 foot drop, just so she can be a youtube sensation. My apple ipad
    is now broken and she has 83 views. I know this is completely
    off topic but I had to share it with someone!

  20. Howdy I am so thrilled I found your website, I really found you by mistake,
    while I was looking on Yahoo for something else, Regardless I am here now and would just like to say thanks for a fantastic post and a all round entertaining blog (I also love the theme/design), I don’t have time to
    read it all at the moment but I have saved it and also included your
    RSS feeds, so when I have time I will be back to read more, Please do keep
    up the great job.

    my blog post … http://www.consulenzaleonardo.com

  21. I am really inspired together with your writing talents and also with the structure in your weblog.

    Is this a paid subject or did you modify it yourself?

    Either way keep up the nice high quality writing, it is rare to peer a
    nice blog like this one these days..

    Feel free to surf to my web-site http://atomy123.cn/

  22. Oh my goodness! Impressive article dude! Thank you so much, However I am experiencing troubles with your
    RSS. I don’t understand the reason why I can’t join it.

    Is there anybody getting the same RSS issues?
    Anybody who knows the solution will you kindly respond? Thanks!!

    my blog :: Janell

  23. obviously like your web-site however you need to take
    a look at the spelling on quite a few of your posts.
    A number of them are rife with spelling issues and I to find it very bothersome to inform the
    reality nevertheless I will definitely come again again.

    Also visit my homepage; atomy123.cn

  24. What i do not realize is in reality how you are no longer really a lot more well-favored than you may be now.

    You are so intelligent. You recognize thus significantly with regards to this matter, produced me in my view consider it from numerous varied angles.
    Its like men and women are not involved unless it’s one thing to do with Woman gaga!

    Your personal stuffs great. At all times care
    for it up!

    Stop by my website; http://www.ptfang.com

  25. Definitely believe that which you stated. Your favorite reason seemed to be on the internet the easiest thing to
    be aware of. I say to you, I certainly get
    irked while people think about worries that they plainly do not know about.
    You managed to hit the nail upon the top and also defined
    out the whole thing without having side effect ,
    people can take a signal. Will likely be back to get more.

    Thanks

    Here is my web page :: http://www.tigangyundong.org

  26. Hey would you mind stating which blog platform you’re using?
    I’m going to start my own blog soon but I’m having
    a hard time making a decision between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design and style seems different then most blogs and
    I’m looking for something completely unique. P.S Sorry for getting off-topic but I had to ask!

    Feel free to visit my web page – 211.159.150.117

  27. I want to get across my appreciation for your generosity in support of men and
    women that need guidance on your situation. Your special dedication to getting the message all over
    came to be exceedingly functional and has truly empowered most people
    just like me to reach their pursuits. Your warm and friendly key points denotes so much a person like me
    and extremely more to my mates. Best wishes; from all of us.

    My webpage: http://www.craksracing.com

  28. Its like you read my mind! You seem to know a lot approximately this,
    such as you wrote the ebook in it or something. I think that you simply could do with a few percent to
    power the message home a little bit, however other than that,
    that is great blog. An excellent read. I will definitely be back.

    My homepage: http://www.sygk100.cn

  29. I leave a response when I like a article on a
    site or if I have something to add to the discussion. It’s a result of the fire displayed in the article I read.
    And after this article Bills Beyond Relief. I was moved enough to post a thought 🙂 I
    do have a couple of questions for you if you do not mind. Could it be only me or do a
    few of these remarks appear as if they are written by brain dead folks?
    😛 And, if you are posting on other online social sites,
    I would like to keep up with you. Could you
    list the complete urls of your public pages like
    your linkedin profile, Facebook page or twitter feed?

    my web blog; https://kebe.top

  30. Very nice post. I just stumbled upon your blog and wished to say that I’ve really enjoyed
    surfing around your blog posts. In any case I will be subscribing for your feed and I’m hoping you write again very soon!

    Also visit my web page … bbs.tanwanly.com

  31. Thank you for your own labor on this web page. My aunt loves making time for investigations and it’s easy to understand why.
    Most people learn all about the lively tactic you
    offer powerful steps through your web site and
    inspire contribution from other people on that article then our
    favorite simple princess is undoubtedly discovering a whole lot.
    Take pleasure in the remaining portion of the new year.
    You are always carrying out a really good job.

    Feel free to surf to my blog post – satozhitalk.org

  32. Attractive section of content. I just stumbled upon your weblog and in accession capital to assert that
    I get actually enjoyed account your blog posts. Any way I’ll be subscribing to your feeds and even I
    achievement you access consistently rapidly.

    my site; cs.yyqyt.com

  33. Thank you, I have recently been looking for info approximately this topic for a long time and yours is
    the best I have came upon till now. But, what in regards to the bottom line?
    Are you sure concerning the supply?

    my website: Marquis

  34. We’re a group of volunteers and opening a new scheme in our community.
    Your site offered us with valuable information to work on. You have done a formidable job and our whole community will be grateful to you.

    Also visit my web site: 19wujian.com

  35. Fantastic goods from you, man. I’ve be mindful your stuff
    previous to and you are simply too excellent. I really like what you have acquired right here, really like what you’re stating
    and the way wherein you assert it. You’re making it entertaining
    and you still take care of to keep it smart. I can not wait to
    learn much more from you. This is actually a terrific site.

    my web blog http://www.ptfang.com

  36. Hey there! I’m at work surfing around your blog from my new
    iphone 3gs! Just wanted to say I love reading your blog and look forward to all your posts!
    Carry on the outstanding work!

    my web blog kebe.top

  37. It’s a shame you don’t have a donate button! I’d definitely
    donate to this outstanding blog! I suppose for now i’ll settle for bookmarking and adding your RSS feed to my Google account.

    I look forward to new updates and will share this website
    with my Facebook group. Chat soon!

    Also visit my homepage: http://atomy123.cn/

  38. I just like the helpful information you provide for your articles.
    I will bookmark your weblog and test again here regularly.
    I am somewhat sure I’ll be informed many new
    stuff right here! Best of luck for the following!

    my webpage Todd

  39. That is very attention-grabbing, You are a very skilled blogger.
    I have joined your rss feed and sit up for seeking more of your great post.
    Additionally, I’ve shared your website in my social networks!

    Look into my site :: 2xueche.com

  40. Wonderful goods from you, man. I have understand
    your stuff previous to and you are just extremely wonderful.
    I really like what you’ve acquired here, really like what you’re stating
    and the way in which you say it. You make it entertaining and
    you still take care of to keep it sensible. I can not wait to read much more from
    you. This is actually a terrific web site.

    Feel free to surf to my web site :: kebe.top

  41. Hello there, I discovered your blog by way of Google at the same time as looking for a related topic, your site got here up, it seems to be great.
    I have bookmarked it in my google bookmarks.

    Here is my site – kebe.top

  42. My brother recommended I might like this website. He was totally right. This post actually made my day. You can not imagine just how a lot time I had spent for this information! Thanks!

  43. You could definitely see your expertise in the work you write.
    The world hopes for even more passionate writers such as you who aren’t afraid to say how
    they believe. At all times follow your heart.

    My webpage – Ellen

  44. Thanks so much regarding giving everyone an update on this
    issue on your web page. Please be aware that if a brand-new
    post becomes available or in case any improvements occur on the current
    post, I would be thinking about reading more and knowing how to make good using of those approaches you
    share. Thanks for your efforts and consideration of people by making this
    site available.

    Feel free to surf to my web site – 19wujian.com

  45. I do not know if it’s just me or if everybody else encountering problems
    with your site. It appears as though some of the written text on your content are running
    off the screen. Can somebody else please comment and let me know if this is happening to them as
    well? This could be a problem with my web browser because
    I’ve had this happen previously. Thanks

    My blog – http://atomy123.cn/forum.php?mod=viewthread&tid=110187

  46. scoliosis
    I just like the helpful info you supply to your articles.
    I will bookmark your blog and take a look at again right
    here regularly. I’m somewhat sure I will be informed many new stuff right right here!

    Best of luck for the following! scoliosis

  47. scoliosis
    Hey! I just wanted to ask if you ever have any issues with
    hackers? My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no data backup.
    Do you have any methods to stop hackers? scoliosis

  48. Hello there, You’ve performed a fantastic job.

    I will certainly digg it and individually suggest to my friends.
    I am sure they will be benefited from this web site.

    Here is my web page :: kebe.top

  49. Heya i am for the first time here. I came across this board and I to find It truly helpful
    & it helped me out a lot. I am hoping to give one thing back
    and aid others such as you helped me.

  50. Great info and straight to the point. I don’t know if this is really the best place to ask but do you guys have any thoughts on where to employ some professional writers? Thank you 🙂

  51. Thanks , I’ve recently been searching for info approximately this subject for a
    long time and yours is the greatest I’ve came upon so far.
    But, what in regards to the bottom line? Are you certain about the source?

  52. Definitely believe that which you stated. Your favorite reason appeared to be on the net the
    simplest thing to be aware of. I say to you,
    I certainly get annoyed while people think about worries that they plainly
    do not know about. You managed to hit the nail upon the top as well as defined out the whole thing without having side effect , people could take a signal.
    Will probably be back to get more. Thanks

  53. Hello there! This is kind of off topic but I need some guidance from an established blog.
    Is it difficult to set up your own blog? I’m not very
    techincal but I can figure things out pretty fast.
    I’m thinking about creating my own but I’m not
    sure where to start. Do you have any ideas or suggestions?
    Many thanks

  54. I don’t even know the way I ended up here, but I assumed this put
    up was once great. I do not understand who you are but certainly you’re going to a
    famous blogger if you aren’t already. Cheers!

  55. Hey there, I think your website might be having browser compatibility issues.
    When I look at your blog in Safari, it looks fine but when opening in Internet Explorer,
    it has some overlapping. I just wanted to give you a quick
    heads up! Other then that, excellent blog!

  56. You can definitely see your skills within the article you write.
    The sector hopes for more passionate writers like you who are not afraid
    to mention how they believe. All the time go after your heart.

  57. Hello I am so glad I found your website, I really found you by error, while
    I was browsing on Askjeeve for something else, Regardless I am here
    now and would just like to say kudos for a incredible post and a all round entertaining blog (I also love the theme/design), I don’t have time to read it all at the moment but I have bookmarked it and also added your RSS feeds, so when I have time I will be back to
    read much more, Please do keep up the great work.

  58. Excellent post. I used to be checking continuously this blog and I’m impressed!

    Extremely useful information specially the ultimate part :
    ) I handle such information much. I was seeking this particular info for
    a long time. Thanks and best of luck.

    my web blog; Roseanne

  59. Hey terrific website! Does running a blog similar to this require a lot of work? I’ve absolutely no knowledge of programming however I had been hoping to start my own blog in the near future. Anyhow, should you have any suggestions or tips for new blog owners please share. I know this is off subject but I simply had to ask. Thank you!

Leave a Comment

Your email address will not be published. Required fields are marked *