How much does Biden’s expense bill actually cost?
When you add up the CBO scores for all the spending and the tax cuts in the bill, that is, whatever Democrats say will benefit Americans, you get about $ 2.2 trillion.
How did the legislation grow to $ 2.2 trillion?
The short answer is: paid time off. This measure alone added more than $ 200 billion to the cost of the bill. A variety of other cost adjustments, like the housing and immigration provisions in the plan as well as other spending additions, did the rest.
What about SALT?
This is a delicate question. The other big change from Mr Biden’s framework in the House bill is a rearrangement of a limit on the deductions individuals can take on federal income tax forms for local taxes. and nationals they pay. This is a measure that would greatly help high income earners in high tax states like New Jersey and New York. But oddly enough, this does not increase the official cost of the bill – mainly because the measure is an accounting measure, intended to provide more freebies to certain taxpayers in the short term while taking away some benefits later.
Republicans capped the national and local tax deduction, known as SALT, at $ 10,000 per household in 2017. Under this bill, the cap would disappear in 2026, meaning that an unlimited deduction would revert. . The Democrats’ plan would raise the cap to $ 80,000 per household for most of the decade before lowering it to $ 10,000 in 2031. That means households taking advantage of the deduction would receive significant tax relief for the next few years. years, but a smaller one for the second half of the decade.
Biden’s social policy bill at a glance
The budget office found that the change would essentially be a financial washout for the government, increasing a bit more over the decade than the current system, as SALT currently maintains a higher cap throughout the decade instead of letting the cap disappear. in 2025.
Some groups, like the Committee for a Responsible Federal Budget in Washington, chose to remove only the benefits of the SALT change earlier in the year and add them to the total cost. The Times does not do this, in order to stay consistent with how we add up the costs and benefits of the rest of the bill, which are measured over the entire decade.
Was this how the cost of the 2017 tax cuts were measured?
Mechanically, yes. Practically no.
With the 2017 law and this bill, we are trying to add up the cost of the parts of the legislation that are supposed to benefit people and businesses. It’s the price to pay”.