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The Tax Foundation is the nation’s
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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
organization.
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Details and Analysis of President
Biden’s FY 2022 Budget Proposals
The Biden administration’s proposed American Jobs Plan (AJP), American Families
Plan (AFP), and fiscal year 2022 budget would increase federal spending by
about $4 trillion over 10 years, including $1.7 trillion for infrastructure, partially
funded with higher taxes on individuals and businesses as well as increased tax
enforcement.
Using the Tax Foundation General Equilibrium Model, we estimate the tax proposals
impacting individuals and businesses would increase federal revenue by about
$1.3 trillion conventionally over 10 years. In addition, the administration claims
about $700 billion in additional revenue from tax enforcement. We estimate the
combination of revenue and spending proposals contained in the president’s budget
would reduce U.S. gross domestic product (GDP) in the long run by 0.9 percent and
result in 165,000 fewer U.S. jobs.
TABLE 1.
Combined Long-Run Effects of Changes in Tax and Spending
under Biden’s FY 2022 Budget Proposals
Long-run Gross Domestic Product (GDP)
-0.9%
Long-run Gross National Product (GNP)
-1.0%
Capital Stock
-2.5%
Wage Rate
-0.8%
Full-Time Equivalent Jobs
-165,000
Source: Tax Foundation General Equilibrium Model, June 2021.
FISCAL
FACT
No. 768
June 2021
Huaqun Li
Senior Economist
William McBride Vice President of Federal Tax and Economic Policy
Garrett Watson Senior Policy Analyst
TAX FOUNDATION | 2
Major Tax Changes in Biden’s FY 2022 Budget
The American Jobs Plan would include the following major tax changes:
• Raise the fed