Posted: Nov 19, 2021 14:06 GMT
The economic package will mean an increase of more than 350,000 million dollars for the budget deficit over the next 10 years.
If there is a project by Joe Biden and the Democrats that is being promoted endlessly both internally and externally, it is the ‘Build Back Better’ law, which can be translated as rebuild better.
Described by the White House as an instrument to strengthen “the backbone of the United States: the middle class”, at the media level the references to it range from a Keynesian turn of the Democrats, to a reinforcement of the social mattress or directly socialist measures in USA
However, after months of cuts and negotiation, we only have to put a magnifying glass on the project to realize that all this is quite far from reality.
The main reason: the bill includes a massive tax cut for the wealthy, as well as increasing by more than $ 350 billion the budget deficit over the next ten years.
Benefit for the wealthiest?
It is up to $ 285 billion that would benefit high-income households almost exclusively for the next five years. The measure involves partially reversing a tax increase signed by Donald Trump, the so-called SALT cap.
Before 2017, taxpayers could deduct virtually everything they paid in state and local taxes from their federal taxes. Trump limited wealthy people from deducting more than $ 10,000.
However, with this law supposedly helping the middle class, the rich will once again be able to pay less taxes. A recent analysis by the Tax Policy Center assures that this reduction will mainly benefit the 10% richer people, and almost nothing will flow to low- and middle-income families. In other words, we are facing a regressive policy.
“Collapse of the US system”
In the opinion of Richard Wolff, Emeritus Professor of Economics at the University of Massachusetts (USA), “this shows the desperate collapse of the American political system.”
“We have two main parties competing with each other to be accepted by the richest corporations and people in America, so even if they do some shows for the crowds, they literally have to bribe corporations and the rich with tax cuts and special programs for it “, maintains the academic.
This SALT provision was not in Biden’s original infrastructure and social spending plans or even in the first versions of the law in the House of Representatives. That is, it has been introduced later and at the behest of political representatives from high-income, high-tax states like New Jersey and New York.
A colossal cost
The main problem is that it has become the second most expensive piece of legislation in the next five years. It will cost more than setting up a paid family and medical leave program, which in the US is left to the discretion of the employer, and will be almost twice as expensive as funding home health services for the elderly and disabled.
This follows from an analysis of the Committee for a Responsible Federal Budget. Only on top of this expense would be financing universal daycare and affordable childcare. Something that at the moment does not exist in the North American country.
A matter of faith?
Another controversial point is how all this is going to be paid for. While advocates for the law say enough will be raised to pay for it, experts aren’t so sure.
In fact, the Treasury secretary herself, Janet Yellen, had to publish a statement on Thursday defending the ‘Build Back Better’ law. The official assures that it will reduce the nation’s debt over time because they will invest in the services that monitor people with high incomes who avoid paying the taxes they owe.
However, with a reduction in taxes for the wealthy endorsed by the Democrats themselves, what happens in this regard in the future seems a matter of faith.
If you found it interesting, share it with your friends!