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The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and global
levels. We are a 501(c)(3) nonprofit
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Build Back Better Act: Details &
Analysis of the $3.5 Trillion Budget
Democratic lawmakers on the House Ways and Means Committee have advanced
legislation containing the tax elements of President Biden’s Build Back Better
agenda. The draft legislation could be modified by the House Rules Committee
before moving to the House floor and may differ from what Senators are preparing.
This analysis contains estimates of the tax legislation as introduced by the House
Ways and Means Committee.
Using the Tax Foundation General Equilibrium Model, we estimate that the House
Ways and Means proposals would increase federal revenues by about $2.1 trillion
over the next decade, before accounting for $1 trillion in expanded tax credits
for individuals and businesses, resulting in a net revenue increase of about $1.06
trillion. Excluding tax revenue from increased tax compliance, the proposals would
raise $862 billion over ten years.
We estimate that the Ways and Means tax proposals would reduce long-run
economic output by 0.98 percent and eliminate 303,000 full-time equivalent jobs in
the United States. It would also reduce after-tax incomes for the top 80 percent of
taxpayers over the long-run.
Combined Long-Run Effects of Changes Under House Ways & Means
Long-run Gross Domestic Product (GDP)
Long-run Gross National Product (GNP)
Full-Time Equivalent Jobs
Source: Tax Foundation General Equilibrium Model, September 2021.
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