Critics warn of hidden costs of Biden’s Build Back Better program

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The potentially hidden costs of President Biden’s “Build Back Better” plan of nearly $ 2 trillion could raise taxes for average Americans – who would also be more likely to be scrutinized by the IRS, the IRS said on Friday. reviews.

“The spending is unbearable. As Margaret Thatcher said, at some point you run out of money for other people, ”said Rep. Nicole Malliotakis (R-Staten Island, Brooklyn).

Malliotakis also derided the massive spending plan – which was narrowly passed by the House on Friday morning in the face of unified GOP opposition – as the “Build Back Broke Bill” and a “Socialist Democratic Spending Spree” “.

“The short term impacts will be inflation and a higher cost of living – and the longer term impact will be tax increases on the middle class,” she said.

“This is a destructive bill that will crush the middle class and hard-working Americans.”

An analysis this week by the University of Pennsylvania’s Penn Wharton Budget Model estimated that the actual cost of Biden’s plan would reach $ 4.6 trillion over 10 years if all of its temporary arrangements were made permanent.

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Another study by the Non-partisan Committee for a Responsible Federal Budget – which said on Thursday that the actual cost of the plan was $ 2.4 trillion – estimated the potential total even higher, at $ 4.9 trillion.

The temporary arrangements include child tax credits that were part of the $ 1.9 trillion pandemic stimulus package that Biden enacted in March, which gave parents $ 3,600 for every child under 6 years and $ 3,000 each up to age 17, for a total cost of about $ 130 billion.

The Build Back Better plan only extends this popular agenda for another year – but many observers expect lawmakers to vote to extend it ahead of the 2020 midterm elections.

“Politically, no one thinks this will be allowed to expire after a year,” said Peter Warren, curator of research at the Empire Center for Tax Policy in Albany.

Warren said that “Democrats use every budget gadget at their disposal and the main budget gadget they have used is to end these provisions.”

President Joe Biden has proposed $ 80 billion in additional funding to expand IRS audits. APHouse President Nancy Pelosi and Rep. John Larson promote expanded child tax credits at a press conference at Goodwin University in East Hartford, Connecticut on September 8, 2021. Photo / Jessica Hill

“But if they were to continue these programs, the question is: where will this money come from? And they would need even more tax increases, ”he said.

Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, called the nature and impact of possible tax increases a “big question, but one that cannot be answered”.

“It could be a carbon tax. It could be income tax rates. It could be corporate tax rates. It could be a surcharge for every American, ”she said.

“We have no idea … which is getting to the point where the outcome of this bill in its current form is very uncertain.”

Economic experts accuse President Joe Biden and Democrats of underestimating the costs of the “Build Back Better” plan EPA / JIM LO SCALZO

Meanwhile, Biden’s plan also includes $ 80 billion in new funding from the IRS to hire an additional 87,000 agents for a massive crackdown on tax fraud.

Republicans warn that would more than double the number of audits to over 1.2 million per year, with nearly half hitting Americans making $ 75,000 or less per year.

Policy analyst James Lucier of Capital Alpha Partners in Washington, DC, said the IRS would most likely target small business owners with “large amounts of non-wage income,” such as winery operators, entrepreneurs. under construction, landscapers, painters and even artisans who sell their work on Etsy.

“These people will be harassed by the IRS and guess who a lot of these people are?” Recent immigrants, ”he said.

“Think about what immigrants are opening nail salons, they’re restaurateurs. These are the people who will be hassled the most by this.”

Lucier added sarcastically, “If you like Facebook tracking you, you’re going to love the IRS – the privacy and civil liberties issues are extreme.”

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