Not reconciled

President Biden is going on up to Capitol Hill to rally House Democrats this morning. He is promoting a Spendapalooza “Framework” of $1.75 trillion to bring them all together.

I have been following the intense cheerleading for the Democrats to come together and get it done at Politico. Politico reports this morning that the $1.75 trillion “includes investments in home care, education and immigration.” They are light on the details, but I feel confident in saying these are not the kind of “investments” that pay dividends. On the contrary.

This is what Politico denominates investments: “The most expensive items in Biden’s proposal are clean energy and climate investments at $555 billion, two years of free pre-school for three and four year olds at $400 billion and $200 billion on tax credits for one year of the Child Tax Credit.”

Although Politico’s story is not short, it fails to intimate the tax components of the Spendapalooza Framework. The Democrats’ “investments” will do serious damage, but we shouldn’t forget the impact of the taxes, whatever they are.

The White House has just posted the whole thing online here. The text includes 51 references to taxes, though most of them are to tax credits. Rest assured, however, it won’t cost anything in the new lexicon of the Biden White House:

[I]t is fully paid for and will reduce the deficit by making sure that large, profitable corporations can’t zero out their tax bills, no longer rewarding corporations that shift jobs and profits overseas, asking more from millionaires and billionaires, and stopping rich Americans from cheating on their tax bills. Under this historic agreement, nobody earning less than $400,000 per year will pay a penny more in taxes.

The White House text of the Framework concludes with the section “Fully Paying for Historic Investments.” It summarizes the new taxes as “offsets” with estimated revenue in billions, “subject to confirmation.” The round numbers are suggestive to me of static analysis on top of wild improvisation. Confirm this:

15% Corporate Minimum Tax on Large Corporations (325)
Stock Buybacks Tax (125)
Corporate International Reform to Stop Rewarding Companies That Ship Jobs and Profits Overseas 350
AGI Surcharge on the Top 0.02% (230)
Close Medicare Tax Loophole for Wealthy (250)
Limit Business Losses for the Wealthy (170)
IRS Investments to Close the Tax Gap (400)
Prescription Drugs: Repeal Rebate Rule (145)

“Up to a total of: 1.195,” as they put it.

The White House text of what it calls the Build Better Framework includes an additional $100 billion for “immigration,” bringing the total Spendapalooza to $1.85 trillion. The $100 billion for immigration is also an “investment,” this one “to reform our broken immigration system, consistent with the Senate’s reconciliation rules, as well as reducing backlogs, expanding legal representation, and making the asylum system and border processing more efficient and humane.” As the kids say, OMG.

What a strange way to run a failing railroad.

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