President Joe Biden is claiming that the budget proposal he put forth has tons of tax relief for U.S. working families.
Yet, according to one columnist, it’s just rhetoric that’s “not only vastly overstated, but in fact misleading.”
In a recent column written on The Hill, Matt Weidinger — a senior fellow and Rowe Scholar in opportunity and mobility studies at the American Enterprise Institute — wrote that the tax cuts in Biden’s budget are actually designed to “mask major federal benefit expansions.”
As he wrote:
“The administration is playing a deceptive game involving ‘refundable tax credits.’ That’s doublespeak for the growing class of benefit checks paid by the IRS to adults who don’t earn enough to owe federal income taxes.
“Millions of working parents already collect refundable tax credits each year under programs such as the Child Tax Credit and the Earned Income Tax Credit. Those programs currently require and encourage work by low-income adults over non-work, which is a good thing.
“But it mocks common sense for the administration to suggest that even bigger benefit payments — with the largest increases flowing to non-working adults — ’cuts taxes’ for adults who don’t pay federal income taxes in the first place.”
In a fact sheet issued by the Biden administration, there are three expansions of tax credits proposed — the Obamacare premium tax credit, the Earned Income Tax Credit and the Child Tax Credit.
The president is proposing, in each of these cases, to revive expansions that were enacted previously on a temporary basis while the COVID-19 pandemic was going on.
Yet, as Weidinger writes, the budget figures that the Biden administration issued show that all three of these proposals overwhelmingly involve new benefits for people who don’t pay any income taxes, and don’t involve tax cuts for people who do pay these taxes.
As he writes:
“Overall, a combined 83 percent of the cost of the three proposals is from benefit expansions which, in budget terminology, constitute ‘outlays’ — that is, the spending of taxpayer money. That’s the same budget category that includes welfare and other means-tested benefit payments. A mere 17 percent of the cost involves relief for those who pay taxes.”
The combined expansion benefits far outweigh proposed tax cuts by nearly $500 billion, Weidinger wrote — $618 billion compared to only $127 billion.
Weidinger further points out how misleading the Biden administration has been regarding the president’s proposed budget. He writes:
“You would never know this from the administration’s tax-cut-focused rhetoric. For example, the administration’s fact sheet suggests that its Earned Income Tax Credit policy ‘cuts taxes for 19 million Americans,’ ignoring that 88 percent of that ‘tax cut’ is really benefit increases.
“Overall, the White House claims its plan would ‘cut taxes for middle- and low-income Americans by $765 billion over 10 years,’ counting at least $618 billion in benefit increases as tax cuts.”
These are still outlays, he points out, even though the IRS is the agency responsible for paying them.
This is yet another example of the Biden administration misleading the American public.
