While Democrats’ $3.5 trillion reconciliation package contains major tax hikes and spending increases, it also contains numerous provisions of dubious origin. These provisions reveal Democrats’ priorities: carving out giveaways to the Left’s base by spending on “woke,” wasteful initiatives.  

Below are just 10 of these perplexing items. 

1. Fake News Tax Handout for Reporters at “Local” Newspapers with up to 750 Employees

The proposal creates a tax credit for “local newspapers” with up to 750 employees – a largely left-of-center group of workers.  

It gives an employment tax credit of up to $12,500 per person for reporters at “eligible” newspapers. As a section-by-section analysis from the Ways and Means Committee details: 

“The credit amount is equal to 50% of wages for each of the first 4 calendar quarters, and 30% of wages for each calendar quarter thereafter. Eligible local newspaper publisher is any employer that is in the trade or business of publishing a local newspaper that serves the needs of a regional or local community and who employs no more than 750 employees.”  

This payroll credit would cost $1.3 billion. The vast majority of newspapers in the country have fewer than 750 employees. Likely beneficiaries include The Malibu Times, Aspen Times and the Vineyard Gazette serving the progressive playground of Martha’s Vineyard.

2. Big Labor Tax Break 

Sec. 138514 provides for an above-the-line deduction for up to $250 in “dues” to a labor organization. This deduction would be distortionary tax policy that does little or nothing to help the majority of middle-class families. It is a more harmful and favorable version of the union dues deduction that existed before the GOP tax cuts repealed it.  

The tax deduction the TCJA repealed allowed employees to deduct any unreimbursed expenses (including union dues) that exceeded 2 percent of their adjusted gross income. However, this distortionary deduction was repealed as part of a trade-off that resulted in lower taxes for the middle class across the board. Now, the Left is artificially trying to buttress union membership and fill their political war chests, as union political giving almost entirely flows to Democrats. 

This deduction would cost $4.25 billion in revenues.  

3. Solar Subsidies to “Promote Environmental Justice”

In yet another edition of, “Why is the government paying for this?”—This provision in the bill expands the energy credit for solar facilities in low-income communities, in which “the Secretary makes an allocation of environmental justice solar capacity limitation.” 

In determining which solar facilities to choose, the Secretary is directed to consider the greatest health and economic benefits, wage and employment benefits, and “community engagement” the facility conducts. Projects would receive an additional 10 percent credit if the solar facilities are in low-income communities, or an additional 20 percent credit if a project is “a qualifying low-income residential building project or a low-income economic benefit project.” 

The extension, modification, and increase in this energy credit would cost $63.9 billion. 

4. $15 Billion for “Energy-Efficient” Doors and Windows 

The reconciliation package would replace a $500 lifetime cap on nonbusiness energy property credits with an annual $1,200 credit. This credit allows up to $600 in credits for energy efficient windows and skylights and up to $500 for energy efficient doors.  

This provision also increases the percentage of the credit for installing qualified energy efficiency improvements from 10 percent of the cost to 30 percent. There is no reason the government should be subsidizing individuals’ door and window replacements.  

5. Tax Credit for Electric Bikes  

Sec. 136407 establishes a 15 percent refundable tax credit for electric bicycles. Under this law, taxpayers could claim a credit of up to $1,500 for electric bicycles costing as much as $8,000 per bike. As a reminder, a tax credit is a dollar-for-dollar reduction in your tax liability.   

The Joint Committee on Taxation estimates that this provision alone could cost $7.43 billion. 

In 2020, the e-bike market was valued at $23.89 billion. This single provision in the Democrats’ plan spends one-third of the entire value of the e-bike market. 

6. Tax Breaks for Elite, Well-Funded Private Universities

Sec. 137702 of this bill would reduce, potentially down to zero, excise tax on investment income of private colleges and universities depending on the amount of financial aid they offer their students. Notably, universities who can provide a lot of grants and scholarships are typically universities with the largest endowments: for example, universities like Harvard and Yale.  

The amount of tax imposed would be reduced based on the aggregate amount of qualified aid awards provided by the institution in relation to the aggregate undergraduate tuition and fees received by the institution. This phaseout would reduce tax revenues by $2.34 billion.  

7.  Investments in the “Green Workforce” 

In Title 5 of this bill, “Investment in the Green Workforce,” Democrats spend $10 billion funding perplexing, niche credits: 

• Sec. 136501 allows the Secretary to allocate an additional $2.5 billion in credits for the advanced energy project credit. About $400 million in credits each year would be reserved for projects in “automotive communities.” Automotive communities, in this bill, are defined as communities that have “experienced major job losses in the automotive manufacturing sector.” This is an apparent handout for unionized autoworkers. 

• Sec. 136502 provides a credit for up to 10 percent of the labor costs incurred by a taxpayer in installing “mechanical insulation property into a mechanical system which was originally placed in service not less than 1 year before the date on which such mechanical insulation property is installed.” Huh? 

8. Refundable Credit for “Environmental Justice” Programs  

Democrats provide a substantial refundable credit for “environmental justice programs” under Sec. 136601 of the bill. 

This provision creates a capped refundable competitive credit of $1 billion for each year from 2022 through and including 2031 to institutions of higher education for environmental justice (EJ) programs. The base credit is 20 percent of costs spent within five years by the higher education institution; however, for HBCUs and minority-serving institutions (MSIs), this credit could cover 30 percent of costs.   

9. Repealing Social Security Number Requirement to Qualify for Child Tax Credit (CTC) 

Sec. 137102 would eliminate the Social Security Number requirement for qualifying children, which was added by the GOP tax cuts, opening the credit up to more abuse.  

10. Credit for Contributions to a Public Universities’ Research Infrastructure Projects 

Middle-class Americans aren’t the usual donors to colleges and universities. Especially not when it comes to project-specific donations. Nonetheless, Democrats are creating a credit for contributions to public universities’ research infrastructure projects. 

The “public university research infrastructure credit” is an amount equal to 40 percent of the qualified cash contributions made by a taxpayer during such taxable year for a qualifying project. The credit amounts allocated to a certified educational institution for all projects cannot exceed $50,000,000 per year, and the total amount of qualifying project credit amounts that may be allocated can be up to $500,000,000 for each 2022 through 2026 – or $2.5 billion in total. 

In an interview last week, far-left Rep. Pramila Jayapal (D-Wash.) forecasted possible Senate antitrust companion legislation to the Cicilline antitrust package that was drafted with little input from rank-and-file Republican members. 

The left’s antitrust agenda would vastly empower unelected Biden bureaucrats and screw up the goods and services Americans use every day. Senate Republicans should hold firm and reject any proposals that would politicize antitrust law. 

Jayapal talked at length about H.R. 3825, the “Ending Platform Monopolies Act,” legislation that would force the breakup of a company that operates a line of business that a bureaucrat determines is a “conflict of interest.” 

H.R. 3825 would ban targeted companies from producing private-label products and selling them on their own marketplaces, depriving shoppers of access to products they value that are often cheaper than brand-name goods. This makes just about as much sense as banning a grocery store from selling generic cereal. Raising prices on everyday household items is the last thing American families need as they attempt to dig out from under the pandemic. 

During the interview, Jayapal confirms that the left’s full-court, government-wide effort to weaponize antitrust law is in full swing: 

"They are supportive, actually. And you might have seen that they appointed some of our best people that we were pushing, (FTC Chair) Lina Khan, (National Economic Council deputy director) Bharat Ramamurti, (special assistant to the president) Tim Wu, many others. And even the Attorney General for antitrust, (Jonathan Kanter) great choice. We’re excited about him. So it’s looking very good."

Additionally, Jayapal confirms that the Senate bills will have the same language as the House bills, and that Democrat lawmakers are looking for Republican cosponsors: 

"The trajectory will be that the Senate will introduce the same House bills, ideally with bipartisan co-sponsorship again, and then we will try to move the bills through the house as quickly as we can. Obviously, we’re focused on reconciliation now. But my hope is that within the next three to six months, we could move those bills through the House."

Senate Republicans should stay far, far away from companion legislation that mirrors the Cicilline package. The six antitrust bills limped out of a 29-hour House Judiciary markup with little conservative support. The package does absolutely nothing to stop Big Tech censorship of conservatives. Instead, it gives unfettered power to Biden bureaucrats to play smash mouth with American companies and advance their woke social agenda. 

As we head into the fall, Republican lawmakers need to hold the line and reject any change to antitrust law that would give more power to the Biden Administration. Doing so would stunt our economic growth and increase government abuse of conservatives. 

House Democrats have included new taxes and government price controls on American medical innovation in their $3.5 trillion reconciliation package. They have included H.R. 3, legislation that creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S. 

These provisions should be rejected and opposed by members of Congress. This plan will undermine the market-based structure of Medicare Part D harming patients, manufacturers, and the American healthcare system.

Here are 5 things to know about H.R. 3:

1. H.R. 3 Should Not be Conflated with “Negotiation”

Supporters of government price controls on American medicines routinely characterize this plan as allowing the government to negotiate with the private sector. This is misleading because there is already negotiation and competition in Medicare Part D.

Part D facilitates negotiation between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and plans. This system works because Congress created a non-interference clause when Part D was created, which prevents the secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations.

Since the law’s enactment, the program has proven to be a successful model of healthcare by saving taxpayers billions of dollars and granting patients access to medicines at low costs. Under this system, plans are free to compete based on the goal of maximizing access and minimizing coverage costs.

Federal spending on Part D has come in 45 percent below projections and is just 14 percent of total Medicare spending. Average monthly premiums in 2019 were just $32.50 and have been stable since 2011. Part D spending also helps keep costs in the rest of Medicare down – it has decreased hospital admissions by 8 percent, resulting in $2.3 billion in annual savings.

According to a 2020 survey, 84 percent of seniors found their Part D premiums affordable and 93 percent found their plan convenient to use. 9 in 10 seniors are satisfied with the Part D drug coverage.

2. H.R. 3 Imposes a 95 percent, Retroactive Excise Tax on Hundreds of Medicines

H.R. 3 enforces its price controls through a 95 percent, retroactive tax on hundreds of life-saving and life-preserving drugs, including cures for cancer, hepatitis C, epilepsy, and multiple sclerosis. This tax is imposed on the sales of a drug if the manufacturer does not agree to government-imposed prices. The tax starts at a 65 percent rate, increasing by 10 percent every quarter a manufacturer is out of “compliance.”

This tax is concerning for a number of reasons:

• It is imposed at such a high rate that it will result in income taxes above 100 percent of income even if applied to a portion of a business’s sales.  
• It is imposed retroactively, rather than prospectively. Taxes are typically imposed prospectively in order to promote consistency, certainty, and fairness. All taxpayers deserve to make decisions based on a reasonable interpretation of the law with the expectation that future changes to the law will not be applied looking backwards. 
• It is imposed on sales, not income. Businesses are typically taxed on their income as it allows them to deduct expenses such as wages and other employee benefits, equipment, and machinery. A tax on sales is imposed irrespective of whether a business made any money. 

3. H.R. 3 Adopts Foreign Price Controls from Countries That Have Healthcare Shortages

H.R. 3 arbitrarily sets the prices of medicines based off the prices in six countries - Australia, Canada, the United Kingdom, France, Germany, and Japan.

These countries utilize socialist price controls on their healthcare systems, which in turn reduce access to care. Because there is no way to compete on price, supply is reduced, which ends up harming patients in the form of less access to healthcare.

For instance, Canadian patients wait an average of 19.8 weeks from referral to treatment. By comparison, 77 percent of Americans are treated within four weeks of referral, while just 6 percent wait more than two months.

At any one time, one million Canadians are waiting for treatment according to some estimates.

In the UK, there was a shortage of 10,000 doctors and 43,000 nurses in 2019, with 9 in 10 managers in the National Health Service saying that too few doctors and nurses presented a danger to patients. At any one time, 4.5 million patients were waiting to see a doctor or receive care.

France has been forced to make significant spending cuts to its “free” socialist healthcare system and there have been significant shortages of basic supplies. Australia has also experienced problems with shortages of medicines and healthcare professionals.

4. H.R. 3 will Lead to Fewer New Cures and Treatments

Adopting foreign price controls will create the same problems that foreign healthcare systems suffer from. It will lead to less medical innovation leading to fewer cures and healthcare shortages for American patients.

The U.S. is currently a world leader when it comes to medical innovation. According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures, a rate far greater than comparable foreign countries. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.

H.R. 3 will directly undermine this medical innovation. In fact, it could lead to 100 fewer lifesaving medicines over the next decade and could reduce life expectancy of the average American by four months, according to a study by the Council of Economic Advisors.

5. H.R. 3 Could Cost High-Paying Jobs Across the Country

President Biden has repeatedly promised to create millions of new high paying manufacturing jobs in America. However, H.R. 3 would threaten existing jobs by imposing taxes and price controls on American businesses.

Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. This includes 800,000 direct jobs, 1.4 million indirect jobs, and 1.8 million induced jobs, which include retail and service jobs that are supported by spending from pharmaceutical workers and suppliers.

The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.

House Democrats are proposing almost $3 trillion ($3,000,000,000,000) in tax increases including tax increases on small businesses and working families. This is the largest tax increase since 1968 compared to the size of the economy and the largest tax increase ever in nominal dollars.

See also: Poll: 80% Oppose Tax Hikes Coming Out of Pandemic

Some of these tax increases include: 

Raising taxes on working families by increasing the federal corporate income tax rate from 21 percent to 26.5 percent. This tax increase will be passed along to working families in the form of higher prices, fewer jobs, and lower wages. This will give the U.S. a combined state-federal rate of 30.9 percent, higher than our foreign competitors including China, which has a 25 percent corporate tax rate, and Europe which has an average rate of 21.7 percent. The developed world average (OECD) is 23.5%.

U.S. Federal + State Tax Rate Under Democrat Plan: 31% 

China's Corporate Tax Rate 25% 

Developed World (OECD) Average National + Subnational Rate: 23.5%

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax in the form of wages and employment. Similarly, a 2020 study by the National Bureau of Economic Research found that 31% of the corporate tax falls on consumers.  

A corporate tax increase will threaten the life savings of families by reducing the value of publicly traded stocks in brokerage accounts or in 401(k)s. Individual investors opened 10 million new brokerage accounts in 2020 and at least 53% of households own stock. In addition, 80 million to 100 million people have a 401(k), and 46.4 million households have an individual retirement account

Raising the corporate income tax rate will hit Americans with higher utility bills as the country tries to recover from the pandemic. Customers directly bear the cost of corporate income taxes imposed on utility companies. Investor-owned electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. Therefore, if Democrats raise the corporate tax rate, they will have voted to raise utility bills. [Americans for Tax Reform has compiled 300 examples of utilities passing tax savings along to customers.] 

Raising taxes on small businesses by raising the top income tax rate to 39.6 percent, limiting the 20 percent small business deduction, expanding the Obamacare net investment income tax, limiting the ability of passthroughs to deduct excess business losses, and raising the corporate tax rate.

This would likely increase taxes on several million small businesses across the country – earlier this year, the Biden administration admitted raising the top income tax rate would raise taxes on one million small businesses. This does not include the other tax increases – a study by the Chamber of Commerce found that there are 1.4 million small businesses organized as C-corporations, while almost 900,000 small businesses could be hit with the limitation of the passthrough deduction based on 2018 IRS SOI data.

Increasing the capital gains tax rate to 28.8 percent and increasing the holding period for carried interest capital gains to five years. Communist China’s capital gains tax is 20 percent.

A 16.5 percent global minimum tax. The Biden administration has been pushing a global agreement locking in high taxes and a 15 percent global minimum tax in order to “end the race to the bottom” and “make all citizens fairly share the burden of financing government.”

Increasing the death tax by cutting the exemption level in half and modifying valuation rules. This will raise taxes on family-owned businesses and farms across the country.

Retroactively raising taxes on taxpayers claiming the conservation easement deduction. It would apply this retroactively back to Notice 2017-10 released on December 23, 2016, so would impact taxpayers in tax years 2016, 2017, 2018, 2019, 2020, 2021 and for future years. If lawmakers want to make changes to the conservation easement deduction, they should do so as part of a net tax cut and prospectively, not retroactively.

A new 95 percent excise tax on medicines and socialist healthcare policies. This legislation creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S.  

This proposal will reduce access to new, lifesaving and life-preserving medicines. According to research by the Galen Institute, the U.S. had access to 90 percent of new cures launched between 2011 and 2018, a rate far greater than comparable foreign countries. For instance, The United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent. 

It will also threaten high-paying manufacturing jobs across the country at a time when we are just emerging from the economic wreckage from the pandemic. Pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state.  

$80 billion in new IRS funding to hire 87,000 new agents. This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice. 

It would help implement the Biden plan to create a new comprehensive financial account information reporting regime which would force the disclosure of any business or personal account that exceeds $600. Not only would this include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal. 

New IRS funding will also be a boon to the union that represents IRS employees. This union, the National Treasury Employees Union (NTEU), shovels 97 percent of their money into Democrat campaign coffers. IRS employees also regularly perform union work on the taxpayer’s dime. In 2019, 1,421 IRS and other Treasury Department employees spent 353,820 hours of taxpayer-funded union time (TFUT), costing the federal government $17.27 million.