Posted on Nov 19, 2021, 7:15 PM
This is a new step forward. The House of Representatives on Friday adopted the social and climate reform project proposed by the White House. Worth 1,800 billion dollars, the bill, entitled Build Back Better, provides in particular to finance the school from three years (instead of five), to limit the cost of certain health insurance and to finance tax credits for the purchase of electric cars.
The American president hailed with the adoption of this text a “new giant leap”. On Monday, Joe Biden had already signed the infrastructure investment plan, which plans to spend $ 1.2 trillion (including $ 550 billion in new funding) in renovating roads and bridges or improving internet and electricity networks.
To achieve a political agreement on this new social and climate component, the White House had halved its initial project. And the members themselves made some corrections. They notably reintroduced a four-week paid family leave, and the ability for the Medicare public health insurance program to negotiate the price of drugs.
Tax measure for wealthy households
They also added a controversial tax measure, because it would greatly benefit affluent households, by allowing households to deduct up to $ 80,000 in local taxes from their federal income tax. Donald Trump had planed this tax advantage to 10,000 dollars during his great reform of 2017, a measure interpreted, at the time, as a desire to sanction wealthy Democratic voters in New York, New Jersey and California, Democratic States high local taxation.
The raising of the threshold is denounced by the left wing of the Democrats, who consider the measure contrary to the spirit of the text. The White House has also already waived several tax justice measures such as an increase in inheritance tax, despite Donald Trump’s reforms which have halved the collection between 2018 and 2019.
The CBO, the Congressional Budget Office, estimated that the bill adopted by MPs would widen the deficit to the tune of $ 367 billion over ten years, despite the planned tax hikes (3 to 8% surtax from 10 million dollars in income, minimum tax of 15% for large profitable companies…).
The text has yet to be adopted in the Senate, where negotiations could still last for weeks. With an upper house shared equally between Democrats and Republicans, each Democratic senator has a de facto veto right over the text. In particular, paid family leave could be debated, and the deduction of local taxes could be subject to an income cap.
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