May 5 (UPI) – A new economic analysis said on Wednesday that President Joe Biden’s U.S. Plan for Families, which proposes spending hundreds of billions of dollars on education and investment for children, would cost an estimated $ 700 billion more. over 10 years than the projects of the plan.
The White House has said the plan will cost $ 1.8 trillion over the next decade. According to the Penn Wharton Budget Model study, roughly $ 2.5 trillion would be spent during this period on the sweeping proposal.
The Penn Wharton Budget Model is a non-partisan, research-based business initiative at the University of Pennsylvania.
The plan would fund programs such as universal preschool, two-year tuition-free community college, extended family and medical leave, and provide monthly payments of at least $ 250 to low-income parents.
The proposal would also provide $ 800 billion in further tax cuts that would benefit low- and middle-income workers and families. Much of the plan would be funded by tax increases for the rich – including an increase in the capital gains tax rate, increased enforcement of IRS audits on wealthier Americans and businesses, and a higher income tax rate.
Penn Wharton’s budget model also said Biden’s plan would increase public debt by nearly 5% and reduce gross domestic product by 0.4% by 2050. It would generate $ 1.3 trillion in new revenue tax over the 10-year period, from 2022 to 2031, which would not pay for the entire package.
The study said the economic loss would result from larger debt exceeding the earnings of new programs.
The gap, according to the study, is mostly found in differences in funding required for tax credits and universal pre-K and community college free provisions. The researchers assumed the proposals would extend beyond the 10-year budget window.
The proposal raises the top personal tax rate from 37% to 39.6% for the top 1%. The capital gains tax rate for households earning more than $ 1 million would also drop to 39.6%.
Americans earning more than $ 400,000 a year would pay 3.8% Medicare tax and the plan would tax unrealized capital gains greater than $ 1 million upon death.
The study provided a breakdown of how much the plan’s income provisions would generate.
He said the additional revenue generated by the more aggressive IRS tax collections from wealthier Americans would amount to $ 480 billion, and the rise in the income rate for wealthier Americans would amount to $ 480 billion. to $ 111 billion. An additional $ 376 billion would come from taxing death gains, long-term capital gains and deferred interest at regular rates.
Extending the business loss limit for unincorporated taxpayers would bring in an additional $ 162 billion and Medicare tax approximately $ 139 billion.