The U.S. House of Representatives will this week vote on H.R. 5376, the “Build Back Better Act.” This legislation contains trillions of dollars in socialist tax increases, woke spending programs, and socialized medicine. ATR urges members of Congress to vote “NO” on this socialist tax and spend plan.

Key provisions include:

  • $80 billion for the IRS to hire 87,000 new agents to audit and harass taxpayers. This proposal includes almost $45 billion for tax enforcement (audits, investigations), which is 23 times the funding for taxpayer services (just $1.93 billion). Funding for the IRS to study the creation of a government run tax preparation system, which will further consolidate power in the federal government.   
  • Price controls and a 95 percent excise tax on American medicines.This provision allows government bureaucrats to impose price controls on up to 20 medicines in Medicare Part B and Part D. If the manufacturer does not accept this government set price, they are hit with a 95 percent excise tax on the total revenues of the drug. The proposal also includes an inflationary rebate penalty on every medicine in Medicare Part B and Part D.   
  • A 15 percent global minimum tax by increasing the tax rate on GILTI (Global Intangible Low-Taxed Income) and applying it on a country-by-country basis, rather than a worldwide basis. This change would create significant tax complexity and uncertainty for businesses operating overseas. It would make American businesses uncompetitive and could cost millions of jobs and tens of billions of dollars in U.S. investment, as noted by a study conducted by Ernst and Young.   
  • A 15 percent domestic minimum tax is based on the premise that corporations exploit tax loopholes to pay zero income tax every year. In reality, businesses utilize legal tax deductions and credits that were created on a bipartisan basis to promote investment, job creation, and growth. For instance, corporations utilize full business expensing to deduct the cost of new equipment and investment. This policy incentivizes new investment, leading to greater economic productivity, job growth, and higher wages. Additionally, these corporate tax increases would drive up the cost of goods and services, which is especially concerning as inflation runs rampant. By an 81-19 margin, voters believe raising taxes on corporations would increase the price of goods and services, according to a poll conducted by HarrisX.   
  • New taxes on people trying to quit smoking: Millions of Americans have successfully quit smoking using reduced risk tobacco alternatives that are 95% safer than combustible tobacco and the FDA has ruled appropriate for the protection of public health. This bill would make these lifesaving products more expensive than deadly combustible tobacco, and academic modeling shows it would lead to 2.75 million more Americans smoking as a result.   
  • A 1 percent tax on stock buybacks would harm Americans that have their life savings invested in 401(k)s, IRAs and the stock market. Eighty to 100 million Americans have a 401(k), 46.4 million households have an individual retirement account and half of Generation-Zers and Millennials are invested in stocks.   
  • $400 billion tax increase on small businesses. During his campaign, President Biden promised the American people that he would not raise taxes on small businesses. But the tax hike plan proposed by House Democrats contains several tax increases on small businesses which will violate the pledge. Specifically, the legislation expands the Obamacare 3.8 percent net investment income tax and limits the ability of passthroughs to deduct excess business losses.   
  • Creates the highest income tax rate in the developed world. As noted by the Tax Foundation, this proposed “millionaires’ tax” would see the U.S. have an average combined federal/state individual income tax rate of 57.6 percent, the highest in the Organisation for Economic Co-operation and Development (OECD). Taxpayers in New York would pay a top tax rate of 66.2 percent, while taxpayers in California would pay a top tax rate of 64.7 percent. This millionaire’s tax would also increase the top capital gains tax to 37 percent, resulting in the U.S. having the third highest capital gains tax in the developed world. Taxpayers in some states would pay a top rate exceeding 40 percent.   
  • Fake News Tax Handout for Reporters at “Local” Newspapers and Broadcast Stations with up to 1,500 Employees. This provision provides a payroll tax credit of up to $12,500 per quarter per employee at “eligible” newspapers and even broadcast stations. Under this bill, NPR, PBS, and even ProPublica, which is trafficking in the stolen personal IRS files of thousands of Americans, seems to be eligible. The bill also appears to be a big-media power play against small, one-person local outfits. It specifically excludes journalists who do not have “media liability insurance.” This could be a cost barrier for many individuals seeking to truly cover local events in their community.   
  • Big Labor Tax Break. Provides for an above-the-line deduction for up to $250 in “dues” to a labor organization. This is a clear giveaway to labor unions that overwhelmingly contribute to Democrat lawmakers.   
  • $4,500 tax giveaway for union-made electric vehicles. The bill contains a $12,500 refundable tax credit for the purchase of a new electric vehicle. The full amount of the tax credit comes with a handout for Big Labor – $4,500 of credit can only be claimed if the purchased vehicle was assembled in a U.S. facility operating under a union-negotiated collective bargaining agreement.   
  • Starter carbon tax on natural gas. This tax increase would violate President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year. The plan would impose a regressive carbon tax on methane emissions from oil and gas development, paid for by American households in the form of higher energy bills and higher costs of everyday products. Once this tax mechanism is in law, Democrats will gradually add other greenhouse gases and build a full-fledged carbon tax regime, with the cost burden shouldered by American households.   
  • $15 Billion for “Energy-Efficient” Doors and Windows. This 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.   
  • Tax Handout for Electric Bikes. The bill allows up to $3,000 of the cost of an “e-bike” to be taken into account for the credit, creating a maximum allowable credit of $900 for individuals. E-bikes costing as much as $4,000 would be eligible for the credit.  The bill would allow for a married couple earning $150,000 to purchase two new electric bicycles every year and claim up to $7,200 in e-bike credits before the provision expires in 2026. In Democrats’ own words, this provision is part of an effort to replace cars with e-bikes. In a press release accompanying the rollout of the legislation, Rep. Panetta (D-Calif.) stated the purpose of the e-bike credit was to “transition to greener modes of transportation” by “incentivizing the use of electric bicycles to replace car trips.”   
  • Solar Subsidies to “Promote Environmental Justice.”  This provision 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.   
  • Backdoor Creation of the Civilian Climate Corps. The bill repackages the Civilian Climate Corps from previous drafts of the legislation by spending an additional $6.915 billion for national service programs to carry out “projects related to climate resilience and mitigation” while requiring grants be made to programs that “utilize culturally competent and multilingual strategies,” while ensuring “projects are carried out with community input and implemented by diverse participants.” The bill also sends $400 million to the Department of Interior to address “deferred maintenance projects” and “to provide housing, including all expenses necessary to provide housing, for employees of the National Park Service, Bureau of Land Management, and participants in corps programs.” The bill additionally spends $80 million on the National Civilian Community Corps “to increase the living allowance and improve benefits of participants.”