Biden OMB Pick Neera Tanden Supports Several Tax Hikes

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Posted by Isabelle Morales on Tuesday, February 2nd, 2021, 3:25 PM PERMALINK

Neera Tanden, President Joe Biden’s pick to lead the Office of Management and Budget (OMB), supports numerous harmful tax increases including a soda tax, a carbon tax, full repeal of the Tax Cuts and Jobs Act, and increased Obamacare taxes.

Each of these taxes would violate Biden pledge not to raise a single penny of taxes on anyone making less than $400,000 a year.

The OMB Director works to enact the President’s budget proposals and has significant influence on tax, spending, and regulation. This pick by President Joe Biden flies in the face of his call for unity and framing as a "moderate." 

Neera Tanden wants to impose a steep national soda tax.

Tanden endorsed the “Medicare for America Act,” legislation introduced by House Democrats that imposed a one cent tax per 4.2 grams of caloric sweetener in sugary drinks.

If one of these sugary drink taxes were imposed, it could result in a 55 to 67 cent tax on a 2-liter bottle of Coca-Cola. A single 2 liter bottle of Coca-Cola costs anywhere from $1.25 to $1.70, so this tax could total 50 percent of the cost of the product. With the Tanden soda tax burden, the cost of a 12-pack of soda could increase by $1.11 to $1.44.

A tax on sugary drinks would also be extremely regressive and disproportionately harm low-income Americans. In fact, according to a 2018 report from the Tax Foundation, 47 percent of the tax collections from a sugary drink excise tax would come from households with income under $50,000.

Soda taxes are so harmful, even Bernie Sanders opposes them.

During his 2016 presidential bid Bernie Sanders slammed Hillary Clinton’s endorsement of a soda tax. Sanders said:

“The mechanism here is fairly regressive. And that is, it will be increasing taxes on low income and working people.”

Sanders went on to note that Clinton’s embrace of a soda tax violated her pledge to the American people not to support any tax increase on Americans making less than $250,000 per year.

"Frankly, I am very surprised that Secretary Clinton would support this regressive tax after pledging not to raise taxes on anyone making less than $250,000. This proposal clearly violates her pledge," Sanders said.

Neera Tanden wants to impose a carbon tax. 

Tanden supports a carbon tax, stating, "We... believe that we have to have some form of tax on carbon." A carbon tax would harm low-income households and increase the cost of electricity and household goods.

In 2016, Hillary Clinton decided to oppose a carbon tax after she learned the following from an internal Clinton report prepared by policy staff: a carbon tax would devastate low-income households, would cause gas prices to increase 40 cents a gallon and residential electricity prices to increase 12% - 21%, would cause household energy bills to go up significantly, and would increase the cost of household goods and services.

Neera Tanden wants to raise taxes by repealing the Tax Cuts and Jobs Act.

Tanden's endorsement of the “Medicare for America Act,” includes a repeal of the Tax Cuts and Jobs Act. 

In one statement, Tanden says, "President Donald Trump and congressional Republican leaders can dress up this bill all they want, but the reality is this: The House tax legislation is a grade-A scam." In another, she claims that "the tax scam slated to be enacted today is one of the most immoral, venal pieces of legislation I have seen in my two decades working in policy and politics."

If the TCJA was repealed:

  • A family of four earning the median income of $73,000 would see a $2,000 tax increase each year.
  • The child tax credit taken by 39 million American families will be cut in half.
  • Millions of low and middle-income households would be stuck paying the Obamacare individual mandate tax of $695 - $2,085. This tax was zeroed out as part of the Tax Cuts and Jobs Act. Biden has vowed to re-impose this tax.
  • The USA would have the highest corporate income tax rate in the developed world, higher than China (25 percent), the United Kingdom (19 percent), Canada (26.8 percent), and Ireland (12.5 percent). 
  • The 20 percent small business deduction taken by 18.6 million Americans would be repealed.
  • Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.  
  • Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.

 

Neera Tanden supports increasing Obamacare taxes, like the Medicare payroll tax and the Obama-Biden net investment income tax. 

The Medicare for America Act supported by Tanden calls for sharply increasing several Obamacare taxes. The legislation would increase the 0.9 percent Medicare Payroll tax to 4 percent and increase the 3.8 percent net investment income tax (NIIT) to 6.9 percent. Obama and then-Vice President Biden purposefully chose not to index the NIIT to inflation, so each year more and more Americans are ensnared by the tax and eventually everyone will pay it. The NIIT hits individuals making $200,000 and families making $250,000. Every year, a greater share of households are stuck paying the tax. It should be repealed, not expanded.

The 3.8 percent NIIT falls on many small businesses that file through the individual code and would be on top of the 39.6 percent federal rate (assuming repeal of the TCJA). This could see small businesses paying a federal rate of 46.5 percent, and rates approaching 60 percent after state taxes.

Similarly, the 4 percent Medicare Payroll tax would be levied on individuals in addition to the 39.6 percent rate. Biden’s other proposed tax increases could already see taxpayers in New York pay a top rate of 62 percent. Adding the 4 percent tax increase would see this increase to 65 percent.

Given the influential role Neera Tanden is taking in the Biden administration, her support for these steep tax hikes is especially concerning. Each and every one of these tax hikes would be a blatant violation of Joe Biden's pledge not to raise a single penny of taxes on anyone earning less than $400,000 a year. These policies would hurt low and middle-income Americans at a time when they are most vulnerable and in need of relief. 

Photo Credit: Center for American Progress

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