Will it raise taxes on the middle class?
The bill directly raises funds in three areas: a new minimum tax on some corporations, new money to help the IRS chase down tax cheats, and lessening the “carried interest loophole” favored by money managers.
However, an analysis from the Joint Committee on Taxation (JCT), requested by Republicans, has fueled a debate over whether the bill will actually increase costs on the middle class.
Republicans have trumpeted the report's conclusion that the Schumer-Manchin bill would indirectly lead to up to $16.7 billion worth of tax increases on American taxpayers earning less than $200,000. In a speech, Senate Minority Leader Mitch McConnell (R-KY) cited the group, saying the bill “would shatter President Biden’s promise not to impact households earning below $400,000.”
In a contentious Fox News interview Tuesday, Sen. Manchin called the claims “a pure, outright lie.”
Other backers of the bill say the results are misleading. They point out that it doesn't directly impose new taxes on the middle class. While those backers acknowledge some corporations may indeed pass along the costs of their increased tax bills, they say its overall impact on middle earners is positive.
And, of course, proponents of the bill have a study to back that up. The study, from a group called Rewiring America, found the bill could save the average household $1,800 per year on energy bills.
Treasury Secretary Janet Yellen weighed in Tuesday in a letter to lawmakers. The bill “would either reduce or have no effect on the taxes due or paid by any family with income less than $400,000,” she said.
She added, “The clean energy tax credits and the expanded premium tax credit will cut taxes for millions of Americans.”