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Details & Analysis of the House
Build Back Better Act Tax Provisions
Democratic lawmakers in the House of Representatives have advanced updated
legislation containing the tax elements of President Biden’s Build Back Better
agenda. The draft legislation may be modified before moving to the House floor and
differ from the Senate’s version of the legislation. This analysis contains estimates of
the budgetary, economic, and distributional impacts of the House bill as specified in
the House Rules Committee print released on October 28, 2021.
Using the Tax Foundation General Equilibrium Model, we estimate that the tax
provisions, IRS enforcement, and drug pricing provisions in the House bill would
increase federal revenues by about $1.2 trillion over the next decade, before
accounting for $451 billion in expanded tax credits for individuals and businesses,
resulting in a net revenue increase of about $768 billion. Excluding the anticipated
revenue from increased tax compliance and the drug pricing provisions, the bill
would raise about $503 billion from net tax increases over 10 years.
We estimate that the House bill would reduce long-run economic output by nearly
0.4 percent and eliminate about 103,000 full-time equivalent jobs in the United
States. It would also reduce average after-tax incomes for the top 80 percent of
taxpayers over the long run.
TABLE 1.
Combined Long-Run Effects of the Updated House
Build Back Better Act
Long-run Gross Domestic Product (GDP)
-0.37%
Long-run Gross National Product (GNP)
-0.36%
Capital Stock
-0.78%