The Build Back Better Act would definitely be a bonus gift to the working class in the U.S. The federal government has upped its game for the betterment of its citizens.
Even though many of the legislation’s original elements, like providing free community college education, were removed, it’s still full of provisions. It can improve family income and health care outcomes. It can raise tax revenue from the wealthy and corporations.
There were many changes made to the bill. Now let’s see a few points of the revised bill and how they would help U.S. citizens if the legislation is passed:
Tax cuts and payments
Lower tax rates: In the initial draft, the top ordinary income tax rate was set to climb to 39.6% from 37%, the principal capital gains tax rate to 25% from 20%, and the top business income tax rate to 26.5% from 21%. These planned tax rate hikes are no longer included in the updated law.
In the updated plan, for income over $10 million, a 5% surtax is applied, and for revenues over $25 million, an 8% surtax is used. This small hike will affect only about 0.1% of Americans and help restore lost tax income from Trump-era tax cuts.
This is a significant shift because fewer taxpayers will feel the impact than in the original bill. For people who are affected by this, the tax rate they pay could be as high as 45%. On top of that, there is the current 3.8% Medicare surtax.
The wealthy pay their share: President Biden’s Build Back Better Initiative aims to establish a fairer tax system. ]The plan would do this by making big changes to the IRS, like hiring enforcement agents who are trained to look for high-income tax evaders, updating systems from the 1960s, and investing in citizen service so people can have their problems solved. Large supervisory resources will be directed against people with the highest incomes, rather than Americans earning less than $400,000.
Big corporations will also pay their share: In 2019, the richest of the rich in the U.S. paid 8% in taxes, and many didn’t pay at all. This was the same as in 2018, and President Biden thinks this is unfair. Build Back Better rules say that companies that make more than $1 billion in profits would have to pay a 15% tax on the profits they report to shareholders. There can’t be an exception to this rule if a big company says it makes money. On top of that, it has a 1% tax on company share buybacks. There are a lot of business leaders who use share buybacks to make money for themselves instead of investing in their employees and the economy.
Impact on the middle class
Help working families: Build Back Better would offer its Child Tax Credit for another year. Each parent would get $300 per month to cover childcare and other costs. It would also extend the Earned Income Tax Credit for another year, which would help people who earn less money have more. This is an integral part of our social safety net. According to the IRS, four out of five workers who claim the EITC, put their EITC dollars to perform for them.
Free child care and preschools: About 20 million kids would get better and more affordable childcare in the U.S. each year. The structure saves more than $5,000 a year for two-parent families with one child who make $100,000. Everyone who makes up to $300,000 a year would be able to apply. This would help parents, especially mothers, to continue work while the kids are at school.
Medical coverage: Medicare would try to get lower prices for prescription drugs that cost a lot. This includes the medications that older people get at the pharmacy counter and those given to them by their doctor’s office. There has been a longstanding issue in the United States with new moms, particularly those from low-income families and women of color. Adding a year of Medicaid coverage to new mothers is also a part of Build Back Better.
Incredibly, the U.S. government has taken up such a massive initiative for the betterment of its citizens. The Build Back Better plan will help many Americans, especially the middle class. The last two years have been horrible for the working class. Because of their dire financial situation, they had to resort to loan sharks and payday loan companies for help. They accumulated vast amounts of credit card debt as well. It’s high time the government takes steps to help people who are in debt.
