Thank God for\u00a0The<\/i>\u00a0New York Times<\/i>. Each time I fear that I will go through the week with an inadequate supply of rage, the\u00a0Times\u00a0<\/i>reliably bails me out.\u00a0This week\u2019s contribution (thus far) is the puff piece on Biden tax policies entitled \u201cBiden, Promising Corporate Tax Increases, Has Cut Taxes Overall.\u201d President Biden\u00a0has<\/u>\u00a0imposed a stock buyback tax and a new corporation alternative minimum tax. But the disingenuous gist of the article is simple: \u201cthe tax cuts Mr. Biden has signed\u00a0for individuals\u00a0and\u00a0corporations\u00a0are larger than the tax increases he has imposed on big corporations and their shareholders.\u201dNot so fast.
\nIt turns out that a lot of what is being labeled as tax cuts is plain, old-fashioned spending. Consider, for example, the child tax credit that was included in the American Rescue Plan. In\u00a0Times\u00a0<\/i>math, this counts as a one-year tax cut of $110 billion. (All estimates are taken from this helpful\u00a0document\u00a0from the Joint Committee on Taxation.) But the child tax credit is a\u00a0refundable<\/u>\u00a0credit, which means that if a qualified recipient has no tax liability, they get the full credit anyway. Technically, there are two parts to the budgetary impact of the credit: the revenue reduction, perhaps until taxes are eliminated, and the outlay that happens when the government sends the individual a check.
\nGuess which is bigger? Sending checks is the administration\u2019s comparative advantage, so the outlay effect of the child credit is $89 billion, or 80 percent of the impact. A mere 20 percent is (probably accidentally) tax decreases. That\u2019s nothing. The enhanced premium tax credits (aka Obamacare subsidies) in the Inflation Reduction Act (IRA) are all, 100 percent, totally outlays \u2013 every penny of the $65 billion \u201ctax cut.\u201d The IRA also contains a similar $205 billion check machine under the guise of refundable tax credits for clean energy.
\nThe president shows his true colors, not in what he can get through Congress, but what he\u00a0proposes\u00a0in his budget, raising taxes \u201cto 20.3 percent of GDP. Over 10 years, the budget proposes an average level of taxation of 19.7 percent, higher than any 10-year period in the history of the modern U.S. tax system.\u201d He also proposes record levels of spending.
\nThe\u00a0Times\u2019<\/i> undisguised effort at rebranding the president notwithstanding, the article does raise a subtle point about federal budgeting. How should one record in the budget the projected impacts of a refundable tax credit? The current approach is to try to anticipate the part that is reduced taxes and show this as less revenue. The remainder shows up as projected increases in outlays. Some have proposed showing it entirely as tax cuts. I think that is misleading. A better case can be made for showing it entirely as outlays since the government has committed to sending the checks even if there is no revenue.
\nIn any event, no budgetary treatment can disguise the fiscal thrust of a president whose tax proposals are unmoored from economic reality and spending proclivities divorced from the reality of federal debt levels.<\/p>\n","protected":false},"excerpt":{"rendered":"
The fact described in the text is that President Biden has imposed a stock buyback tax and a new corporation alternative minimum tax, but the tax cuts signed for individuals and corporations are larger than the tax increases imposed on big corporations and their shareholders.<\/p>\n","protected":false},"author":6,"featured_media":5545,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[492,1766,2619,325,1002,898,358,3481,696,415,658,67,393,3360,2776,389,3480,1832,1065,3358,3359,1183],"class_list":["post-5544","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-biden","tag-budget","tag-buyback","tag-check","tag-checks","tag-debt","tag-energy","tag-federal-budgeting","tag-gdp","tag-government","tag-history","tag-inflation","tag-new-york","tag-president-biden","tag-rebranding","tag-rescue","tag-spending","tag-subsidies","tag-tax","tag-tax-cuts","tag-tax-increases","tag-taxes"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n