- Five former U.S. Treasury Secretaries, four Democrats and one Republican, endorsed a $430 billion drug, energy, and tax measure.
- The secretaries also claimed that the JCT analysis selectively showed the bill’s distributional effects while ignoring its positives to middle-class people.
- Summers criticised the Biden administration’s $1.9 trillion American Rescue Plan COVID-19 relief programme last year.
Five former U.S. Treasury Secretaries, four Democrats and one Republican, endorsed a $430 billion drug, energy, and tax measure on Wednesday, saying it would lower expenses for middle-class people.
Former Treasury Secretaries Robert Rubin, Larry Summers, Jacob Lew, Tim Geithner, and Henry Paulson reiterated in a letter to congressional leaders on Tuesday that the plan would not raise taxes on Americans earning less than $400,000.
The most recent former secretary, Steven Mnuchin, who served in former President Donald Trump’s Republican administration, was not mentioned in the statement. Paulson, the group’s lone Republican, has advocated for environmental reasons such as the transition to sustainable energy.
Republicans have argued that the bill, known as the “Inflation Reduction Act of 2022,” would violate President Biden’s vow not to raise taxes at that level according to a Joint Committee on Taxation examination of the distributional impacts of income and taxes from the legislation.
According to the JCT estimate, greater corporate taxes would raise the effective tax burdens of Americans earning $200,000 or less by $16.7 billion in 2023 due to income reduction effects.
In a statement provided by Summers’ Harvard University office, the former Treasury secretaries claimed the law was “funded by sound tax policy that will collect more from top earners and major corporations.”
“Taxes due or paid will not increase for any family making less than $400,000/year. And the extra taxes levied on corporations do not reflect increases in the corporate tax rate, but rather the reclaiming of revenue lost to tax avoidance and provisions benefiting the most affluent,” they said.
The secretaries also claimed that the JCT analysis selectively showed the bill’s distributional effects while ignoring its positives to middle-class people, like as lower prescription drug prices and more inexpensive energy.
“This measure would help boost American competitiveness, address our climate issue, decrease costs for families, and combat inflation — and it should be passed by Congress soon,” the former secretaries stated.
Summers criticised the Biden administration’s $1.9 trillion American Rescue Plan COVID-19 relief programme last year, claiming that it was excessive and would fuel persistent inflation.
The proposed law would offer new federal funds for a major decrease in U.S. carbon dioxide emissions that contribute to climate change, as well as allow Medicare, the federal health insurance programme for the aged and disabled, to negotiate lower rates of reimbursement.
The bill would be funded by a new 15% domestic corporate minimum tax on large corporations with more than $1 billion in book income, as well as the elimination of several perks and exemptions that favour wealthy Americans.
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