when was social security first taxed

who was the first president to dip into social security. When the tax dedicated to Social Security was first implemented in 1937, it was capped by statute at the first $3,000 of earnings (which would be equivalent. Self-employed individuals generally pay 12.4 percent of their net self-employment income. When payroll taxes for Social Security were first.

: When was social security first taxed

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When was social security first taxed
When was social security first taxed
When was social security first taxed

Information for retired persons

Pension and annuity income

Your pension income is not taxable in New York State when it is paid by:

  • New York State or local government
  • the federal government, including Social Security benefits
  • certain public authorities

In addition, income from pension plans described in section 114 of Title 4 of the U.S. code received while you are a nonresident of New York State is not taxable to New York. 

If your pension is taxable to New York and you are over the age of 59 ½ or turn 59 ½ during the tax year, you may qualify for a pension and annuity exclusion of up to $20,000. This exclusion from New York State taxable income applies to pension and annuity income included in your recomputed federal adjusted gross income. For more information on the pension exclusions and other benefits for retired people, see Publication 36, General Information for Senior Citizens and Retired Persons.

Return filing requirements

Even if you do not owe New York State income taxes, you may be required to file an income tax return. See filing information for: 

Updated:

Источник: https://www.tax.ny.gov/pit/file/information_for_seniors.htm
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The plan also integrates a couple of elements that might help draw support from across the aisle.

The new version would repeal rules that reduce Social Security benefits for public workers and their spouses, widows or widowers who also have pension income. These are known as the Windfall Elimination Provision and Government Pension Offset.

This issue came up at a recent House hearing on Social Security and has bipartisan support.

The elimination of one proposal — a higher payroll tax rate — may also help draw more support. The Social Security 2100 Act had previously called for gradually increasing contributions to the program from workers and employers to 7.4%, up from the current rate of 6.2%, over roughly 20 years.

However, the legislation does call for increasing Social Security taxes paid by higher-wage earners. In 2021, those taxes are capped at $142,800 in wages, and in 2022 that will rise to $147,000. This proposal reapplies taxes on wages at $400,000 and up, which is also in line with what Biden has proposed.

At the same time, the bill would also raise the thresholds above which income including Social Security is taxed. The plan calls for changing that to $35,000 for individuals and $50,000 for couples, up from $25,000 and $32,000, respectively.

The bill would also prevent the reduction of benefits for certain beneficiaries if the National Average Wage Index declines due to unforeseen circumstances, such as events impacting the economy.

It would also require the SSA to mail paper statements to all workers ages 25 and up, unless they request electronic delivery.

Other changes in the bill include extending benefits for students up through age 25, increasing certain widows' and widowers' benefits, boosting beneficiaries' benefits after 15 years, eliminating a five-month waiting period to receive disability benefits, and creating caregiver credits so that the retirement benefits of those who take time out of the workforce are not reduced.

It remains to be seen how much attention this bill will get amid Congress' busy legislative agenda and whether it will be embraced by Republican lawmakers.

However, advocates such as Social Security Works are optimistic.

"We're all hoping that after they finish, however they finish the reconciliation and the debt limit and all these other things, that they will bring up Social Security," Altman said.

The National Committee to Preserve Social Security and Medicare was also among the groups to support the proposal.

"There is good news for everyone in this bill, which is only fitting, since Social Security touches almost every American's life," said Max Richtman, the organization's president and CEO.

"It is time for the full House to pass Rep. Larson's bill and send it on to the Senate," he said.

Источник: https://www.cnbc.com/2021/10/26/social-security-what-a-new-plan-in-congress-would-mean-for-benefits.html

If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you must pay federal income taxes on your Social Security benefits. Below those thresholds, your benefits are not taxed. That applies to spousal benefits, survivor benefits and Social Security Disability Insurance (SSDI) as well as to retirement benefits.

The portion of your benefits subject to taxation varies with income level. You’ll be taxed on:

  • up to 50 percent of your benefits if your income is $25,000 to $34,000 for an individual or $32,000 to $44,000 for a married couple filing jointly.
  • up to 85 percent of your benefits if your income is more than $34,000 (individual) or $44,000 (couple). 

Say you file individually, have $50,000 in income and get $1,500 a month from Social Security. You would pay taxes on 85 percent of your $18,000 in annual benefits, or $15,300. Nobody pays taxes on more than 85 percent of their Social Security benefits, no matter their income.

The Social Security Administration estimates that about 56 percent of Social Security recipients owe income taxes on their benefits.

For purposes of determining how the Internal Revenue Service treats your Social Security payments, “income” means your adjusted gross income (line 11 of your 1040 form) plus nontaxable interest income plus half of your Social Security benefits. The IRS has an online tool that calculates how much of your benefit income is taxable.

All of the above concerns federal income taxes. Thirteen states also tax Social Security to varying degrees: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, North Dakota, Vermont, Utah and West Virginia.

Some follow the federal rules for determining if benefits are taxable, others have their own sets of deductions and exemptions based on age or income, and Colorado, Nebraska and West Virginia are phasing out taxation of benefits entirely for most or all residents. Contact your state tax agency for details on how benefits are taxed.

Keep in mind

  • If your child receives Social Security dependent or survivor benefits, those payments do not count toward your taxable income. That money is taxable if the child has sufficient income (from Social Security and other sources) to have to file a return in his or her own name.
  • Supplemental Security Income (SSI) is never taxable.
  • If you do have to pay taxes on your benefits, you have a choice as to how: You can file quarterly estimated tax returns with the IRS or ask Social Security to withhold federal taxes from your benefit payment.
Источник: https://www.aarp.org/retirement/social-security/questions-answers/how-is-ss-taxed.html

Social Security




Since a pair of 1938 Treasury Department Tax Rulings, and another in 1941, Social Security benefits have been explicitly excluded from federal income taxation. (A revision was issued in 1970, but it made no changes in the existing policy.) This changed for the first time with the passage of the 1983 Amendments to the Social Security Act. Beginning in 1984, a portion of Social Security benefits have been subject to federal income taxes.

The three Treasury Rulings (see below) established as tax policy the principle that Social Security benefits were not subject to the vanderbilt at south beach staten island federal income taxes. This was special treatment for Social Security benefits since most private pensions are partly taxable. In most private pensions, an amount of the pension equal to the contributions made by the worker are tax-free. The amount of such private pensions which exceeds the amount of the worker's contributions, is usually subject to federal income taxes.

A slightly different, and more complicated, way of saying essentially the same thing is that the portion of pension benefits not subject to taxation is that on "after-tax income." For a worker, his entire pay is subject to federal income taxes, including that part that is subject to Social Security payroll taxes, and so, in the sometimes confusing parlance of tax policy, this is said to all be "after-tax income." His employer, however, is allowed when was social security first taxed to deduct his portion of the Social Security payroll tax from his taxable income. So Social Security payments made by the employer are considered "before-tax income" (and hence, not taxable). So the value of the "before-tax income" received by the beneficiary (i.e., the employer's contribution) is potentially taxable. Or to say it the other way, only that portion of the worker's "after-tax income" on which he paid payroll taxes, is not taxable.

Yet another way of describing this idea is to use "exclusion ratios," which is how the Treasury Department defines the taxable portion of a pension benefit. In all of these ways of describing it, the basic idea is the same: the pension recepient is generally liable for taxes on that portion of his benefits that he did not himself contribute.

Treasury's underlying rationale for not taxing Social Security benefits was that the benefits under the Act could be considered as "gratuities," and since gifts or gratuities were not generally taxable, Social Security benefits were not taxable. It is likely that Treasury took this view owing to the structure of icici prudential banking and financial service fund the 1935 Act in which the taxing provisions and the benefit provisions were in separate Titles of the law. Because of this structure, one when was social security first taxed could argue that the taxes were just a when was social security first taxed of revenue-raising, unrelated to the benefits. The benefits themselves could then be seen as a "gratuity" that the federal government paid to certain classes of citizens. Although this was clearly not true in a political and moral sense, it could be construed this way in a legal sense. In the context of public policy, most people would hold the view that the tax contributions created an "earned right" to subsequent benefits. Notwithstanding this common view, the Treasury Department ruled that there was no such necessary obx netflix cast and hence that Social Security benefits were not taxable.

On the other hand, the fact of the matter is that Social Security beneficiaries do not fully fund their benefits through their payroll taxes. Benefits are funded from three sources: the employee's payroll tax, the employer's matching payroll tax, and interest earned by the Trust Funds. Only one part of this funding could be said to have been directly paid by the beneficiary. Also, technically speaking, benefits are computed based on the workers' earnings, not on the amount of taxes they pay.

So the beneficiary's own contributions do not account for the employer's matching contribution or the interest earned on both. Nor does it account for the benefits received in excess of total contributions. That is, due to the fact that the Social Security program operates in part on the insurance principle, most beneficiaries receive far more in benefits than either they and/or their employers contributed to the system.

If a rigorous effort is made to identify how much of the average beneficiary's benefit was directly paid for by the beneficiary, the general answer is about 15%. Or to say it the other way, about 85% of the average Social Security benefit represents an amount in excess of that contributed to the program by the average worker.




The 1979 Advisory Council was charged with studying the financing and benefit provisions of the Social Security program. The Council wrote extensively on the issue of taxation of Social Security benefits:

"The present tax treatment of social security was established at a time when both social security benefits and income tax rates were low. In 1941 the Bureau of Internal Revenue ruled that social security benefits were not taxable, most probably because they cit bank savings viewed as a form of income similar to a gift or gratuity.
The council believes that this ruling was wrong when made and is wrong today. The right to social security benefits is derived from earnings in covered employment just as is the case with private pensions.
The council believes that the current tax treatment of private pensions is a more appropriate model for the tax treatment of social security, Pension benefits from contributory private pension plans (including those for government employees) are now taxed to the extent that the benefits exceed the employee's accumulated contributions to the plan. Cumulative retirement benefits up to the employee's own total contributions are not taxed because the income from which the contributions were paid was taxable. That part of the benefit representing the employer's contribution and interest income on both the employee's and the employer's contributions is taxed when received.
Estimates by the Office of the Actuary of the Social Security Administration indicate that workers now entering covered employment in aggregate will make payroll tax payments totaling no more than 17 percent of the benefits that they can expect to receive. The self-employed will pay no more than 26 percent on average. Therefore, if social security benefits were accorded the same tax treatment as private pensions, only 17 percent of the benefit would be exempt from tax when received, and 83 percent would be taxable. . Rough Justice would be when was social security first taxed, however, if half the benefit (the part commonly if somewhat inaccurately attributed to the employer contribution) were made taxable."

This recommendation by the Advisory Council encountered widespread resistance in the Congress. In an effort to make the idea more palatable, it was suggested that exclusionary thresholds could be added so that beneficiaries of low to moderate incomes would not be affected. This was similar to the procedure in use for the taxation of unemployment compensation benefits, which began in 1978.

Thus, the proposal as it emerged was for 50% of Social Security benefits to be subject to federal income tax, with threshold exclusions set at the same levels as those used for Unemployment Compensation (U.C.).

Following the 1979 Advisory Council, the When was social security first taxed Commission on Social Security Reform (informally known as the Greenspan Commission after its Chairman) was appointed by the Congress and the President in 1981 to study and make recommendations regarding the short-term financing crisis that Social Security faced at that time. Estimates were that the Old-Age and Survivors Insurance Trust Fund would run out of money, possibly as early as August 1983. This bipartisan Commission was to make recommendations to Congress on how to solve the problems facing Social Security. Their report, issued in January 1983, was the basis for Congress' consideration of the Social Security reform proposals which ultimately resulted in the 1983 Social Security Amendments.

In its Report, the Commission recommended that Social Security benefits be taxable: "The National Commission recommends that, beginning with 1984, 50% of OASDI benefits should be considered as taxable income for income-tax purposes for persons with Adjusted Gross Income (before including therein any OASDI benefits) of $20,000 if single and $25,000 if married. The proceeds from such taxation, as estimated by the Treasury Department, would be credited to the OASDI Trust Funds under a permanent appropriation."

This was essentially the Advisory Council recommendation as it had come to be modified in subsequent debate. (With the change that the thresholds are computed before adding in the Social Security when was social security first taxed benefit--the opposite of the way it was done in U.C.)

The Commission estimated that its proposals would effect only about 10% of Social Security beneficiaries and that it would result in $30 billion in revenue to the Trust Funds in the first seven years.




Congress passed and President Reagan signed into law the 1983 Amendments. Under the '83 Amendments, up to one-half of the value of the Social Security benefit was made potentially taxable income. The specific rules adopted in 1983 were:

When considering the 1983 Amendments, the Report by the House Ways & Means Committee argued as follows: "Your Committee believes that social security benefits are in the nature of benefits received under other retirement systems, which are subject to taxation to the extent they exceed a worker's after-tax contributions and that taxing a portion of social security benefits will improve tax equity by treating more nearly equally all forms of retirement and other income that are designed to replace lost wages. ."

The Senate Finance Committee Report offered these additional observations: ". . by taxing social security benefits and appropriating these revenues to the appropriate trust funds, the financial solvency of the social security trust funds will be strengthened. . By taxing only a portion of social security and railroad retirement benefits (that is, up to one-half of benefits in excess of a certain base amount), the Committee's bill assures that lower-income individuals . . will not be taxed on their benefits. The maximum proportion of benefits taxed is one-half in recognition of the fact that social security benefits are partially financed by after-tax employee contributions."

The Senate Report thus acknowledged that one motivating factor when was social security first taxed in introducing this change was to raise revenue for the Trust Funds. This was part of a much larger package of program changes designed to address the financial solvency of the program. One might fairly say that cutting benefits and raising revenues was the purpose of the 1983 Amendments, and the adoption of Social Security benefit taxation was simply one provision among many to facilitate these aims. It is also important to note that funds raised under this provision do not go into the General Fund of the Treasury but into the Social Security Trust Funds. This emphasizes again that the purpose of introducting this provision was to raise revenue to help restore Social Security's financial solvency. (The Committees estimated the six-year savings from this provision at $26.6 billion, and estimated that this provision would supply almost 30% of the total additional long-range funding provided by the Amendments.)

We should also take note of the rationale for the exclusionary thresholds in the law. The Congress intended that the taxation provisions should not affect "lower-income individuals." The $25,000 and $32,000 thresholds were included to accomplish this. So the thresholds are not based on any feature of the Social Security program--they are pure tax policy. Since the thresholds in the 1983 law were intentionally not indexed, over time, they would lose some of their threshold effect as increases in real income or in inflation would tend to pull more and more people into tax liability. Indeed, by the time the law was first amended in 1993, about 18% of Social Security beneficiaries had some tax liability (compared to about 10% when the law was originally enacted).

The idea that only one-half of the benefits would be subject to taxation did have some basis in the Social Security program. It was based on the simple notion that the employee had made only one-half the contributions used to fund his benefit (the other half having been paid by the employer). Since in private pensions, benefits in excess of the employee's own contributions are taxable, one could argue that 50% of Social Security benefits should be subject to taxation. As Ways and Means Committee member Wyche Fowler (D-GA) explained the provision on the House floor: ". . although employees pay income taxes on their income subject to the payroll tax, employers do not because they can claim a business expense deduction for their payroll tax payments. Therefore, it is argued that requiring Social Security beneficiaries to pay taxes on their benefits--the part provided by employer contributions--is appropriate at the time of receipt."

Even so, this rough-approximation did not really give Social Security benefits the same tax treatment as private pensions--because the real "non-contributed" portion is about 85% of the average benefit, not 50%. During consideration of the bill in the two houses some unsuccessful amendments were advanced to make the Social Security when was social security first taxed provision more precisely like those governing private pensions, but ultimately the idea of a 50% portion prevailed.

The idea of taxing benefits, like many of the individual features of the omnibus bill, was not universally popular. Some complained that it introduced a form of "means test" in that beneficiaries of lower incomes were not subject to the provision (due to the thresholds). It was also argued that this introduced General Revenue financing into the system, and that it watered-down the equity of those beneficiaries who had to pay taxes.

Ultimately, the 1983 Amendments were passed in the House on the evening of March 9, 1983 by a vote of 282 to 148. On the evening of March 23rd, the Senate passed its version of the bill by a vote of 88 to 9. Both bills contained virtually identical provisions for the taxation of benefits, with only one change in the Senate bill: requiring that tax-free interest income be used in the computation to determine if the thresholds were exceeded. In the Conference, which took place on March 24th, the House accepted the Senate provision. Immediately following the conclusion of the Conference, at 10:25 p.m. that night, the Congress reconvened to consider the Conference Report. The House quickly adopted the Conference Report by a vote of 243 to 102. In the Senate, the debate went on through the night and finally, in the early morning hours of March 25th, the Senate voted 58-14 for final passage. (See detailed Summary of the 1983 Amendments.)




In 1993, as part of Omnibus Budget Reconciliation Act, the Social Security taxation provision was modified to add a secondary set of thresholds and a higher taxable percentage for beneficiaries who exceeded the secondary thresholds. Specifically, the 1993 did the following:

Note that these were secondary thresholds and taxable percentages. Thus they did not increase the number of beneficiaries subject to taxation. Rather, they raised the potential tax liability for a subset of those already subject to the tax (those with higher earnings). Prior to this change, 81.8% of Social Security beneficiaries had no potential tax liability for their Social Security benefits. This was not changed, in any way, by the 1993 law. However, of the 18.2% already subject to potential taxation, 10.6% saw their potential tax liability increase, while the remaing 7.6% suffered no change.

The changes introduced by the 1993 amendments were designed to make the treatment of Social Security benefits more closely approximate private pensions--albeit, only for higher-income beneficiaries. To this end, the taxable percentage was set at 85% for these higher-income beneficiaries. New thresholds were added, but only to differentiate those subject to the higher percentage from those still subject to the 50% figure.

In explaining the rationale for these changes, the House Budget Report stated:

"The committee desires to more closely conform the income tax treatment of Social Security benefits and private pension benefits by increasing the maximum amount of Social Security benefits included in gross income for certain higher-income beneficiaries. Reducing the exclusion for Social Security benefits for these beneficiaries will enhance both the horizontal and vertical equity of the individual income tax system by treating all income in a more similar manner."

Under the House version of the bill, however, the increased revenues from the new percentage taxable was to go to the General Fund of the Treasury. Under the Senate version, the increased revenues were to go into the Medicare HI Trust Fund. The Senate position prevailed.

Under the House bill, there were no changes in the existing thresholds--everyone with countable income over the 1983 thresholds would be subject to the 85% rate. Under the Senate version, new secondary thresholds were proposed at $32,000 and $40,000--with the old rules applying for those over the old thresholds but under these secondary thresholds. For those over the new thresholds, the 85% figure would come into play. The Senate version prevailed here as well, except that the Conference agreed to boost the secondary thresholds to $34,000 and $44,000.

Thus, under present law, almost all Social Security beneficiaries still enjoy more favorable tax treatment of their benefits than is the case for recipients of private pensions.

Источник: https://www.ssa.gov/history/taxationofbenefits.html

Joe Biden believes that there’s no greater economic engine in the world than the hard work and ingenuity of the American people. But for too long, the economy has worked great for those at the top, while working families continually get squeezed. President Biden promised to rebuild the backbone of the country – the middle class – so that this time everyone comes along. He also campaigned on a promise to make government work for working people again.

Today, the President is delivering on these promises. After hearing input from all sides and negotiating in good faith with Senators Manchin and Sinema, Congressional Leadership, and a broad swath of Members of Congress, President Biden is announcing a framework for the Build Back Better Act. President Biden is confident this is a framework that can pass both houses of Congress, and he looks forward to signing it into law. He calls on Congress to take up this historic bill – in addition to the Bipartisan Infrastructure Investment and Jobs Act – as quickly as possible.

This framework will guide the drafting of legislative language. When enacted, this framework will set the United States on course to meet its climate goals, create millions of good-paying jobs, enable more Americans to join and remain in the labor force, and grow our economy from the bottom up and the middle out. Specifically, the Build Back Better Act will be:

  • The most transformative investment in children and caregiving in generations. The framework will save most American families more than half of their spending on child care, deliver two years of free preschool for every 3- and 4-year-old in America, give more than 35 million families a major tax cut by extending the expanded Child Tax Credit, and expand access to high-quality home care for older Americans and people with disabilities.
  • The largest effort to combat climate change in American history. The framework will cut greenhouse gas pollution by well over one gigaton in 2030, reduce consumer energy costs, give our kids cleaner air and water, create hundreds of thousands of high-quality jobs, and advance environmental justice by investing in a 21st century clean energy economy – from buildings, transportation, industry, electricity, and agriculture to climate smart practices across our lands and waters.
  • The biggest expansion of affordable health care coverage in a decade. The framework will reduce premiums for more than 9 million Americans by extending the expanded Premium Tax Credit, deliver health care coverage to up to 4 million uninsured people in states that have locked them out of Medicaid, and help older Americans access affordable hearing care by expanding Medicare.
  • The most significant effort to bring down costs and strengthen the middle class in generations. The framework will make the single largest and most comprehensive investment in affordable housing in history, expand access to affordable, high-quality education beyond high school, cut taxes for 17 million low-wage workers by extending the expanded Earned Income Tax Credit, and advance equity through investments in maternal health, community violence interventions, and nutrition, in addition to better preparing the nation for future pandemics and supply chain disruptions.

The framework will also improve and reform our broken immigration system consistent with the Senate’s reconciliation rules.

And, it 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 most transformative investment in children and caregiving in generations:

Too many working families struggle to afford the growing cost of raising children and too many older Americans and Americans with disabilities cannot access affordable home care. The Build Back Better framework will make the most transformative investment in children and caregiving in generations. Specifically, the framework will:

  • Provide universal and free preschool for all 3- and 4-year-olds, the largest expansion of universal and free education since states and communities across the country established public high school 100 years ago. Preschool in the United States costs about $8,600 per year. The Build Back Better framework will enable states to expand access to free preschool for more than 6 million children per year and increase the quality of preschool for many more children already enrolled.  Importantly, parents will be able to send children to high-quality preschool in the setting of their choice – from public schools to child care providers to Head Start. The program will lead to lifelong educational and economic benefits for children and parents, and is a transformational investment in America’s future economic competitiveness. In fact, research shows that every $1 invested in high-quality early childhood care and education can yield $3 to $7 over the long-run, as they do better in school, are more likely to graduate high-school and college, and earn more as adults.
  • Make the largest investment in child care in the nation’s history, saving most working American families more than half of their spending on child care. For decades, child care prices in the United States have risen faster than family incomes, yet the United States still invests 28 times less than its competitors on helping families afford high-quality care for toddlers. The Build Back Better framework will ensure that the vast majority of working American families of four earning less than $300,000 per year will pay no more than 7 percent of their income on child care for children under 6. Parents who are working, looking for work, participating in an education or training program, and who are making under 2.5 times their states median income will receive support to cover the cost of quality care based on a sliding scale, capped at 7% of their income. The framework will help states expand access to high-quality, affordable child care to about 20 million children per year – covering 9 out of 10 families across the country with young children. For two parents with one toddler earning $100,000 per year, the framework will produce more than $5,000 in child care savings per year. Better access to high-quality child care can increase the likelihood that parents, especially mothers, are employed or enrolled in education and training beyond high school, while also providing lifetime benefits for children, especially those who are economically disadvantaged.
  • Deliver affordable, high-quality care for older Americans and people with disabilities in their homes, while supporting the workers who provide this care. Right now, there are hundreds of thousands of older Americans and Americans with disabilities on waiting lists for home care services or struggling to afford the care they need, including more than 800,000 who are on state Medicaid waiting lists. A family paying for home care costs out of pocket currently pays around $5,800 per year for just four hours of home care per week. The Build Back Better framework will permanently improve Medicaid coverage for home care services for seniors and people with disabilities, making the most transformative investment in access to home care in 40 years, when these services were first authorized for Medicaid. The framework will improve the quality of caregiving jobs, which will, in turn, help to improve the quality of care provided to beneficiaries.
  • Provide more than 35 million households up to $3,600 (or $300 per month) in tax cuts per child by extending the American Rescue Plan’s expanded Child Tax Credit. The Build Back Better framework will provide monthly payments to the parents of nearly 90 percent of American children for 2022 – $300 per month per child under six and $250 per month per child ages 6 to 17. This historic tax cut will help cover the cost of food, housing, health care, and transportation and will continue the largest one-year reduction in child poverty in history. And critically, the framework includes permanent refundability for the Child Tax Credit, meaning that the neediest families will continue to receive the full Child Tax Credit over the long-run.

The largest effort to combat climate change in American history:

Scientists have warned for years that extreme weather will only worsen in the wake of climate change. Millions of Americans are living this reality in real time. In addition to the lives shattered and lost, extreme weather fueled by climate change destroys homes, schools, and small businesses, and cost America more than $100 billion last year alone. Delayed action on climate also sets us back in the global race on manufacturing and innovation and keeps us from harnessing the economic opportunity that this moment represents.

The Build Back Better framework is the largest effort to combat the climate crisis in American history. The framework will start cutting climate pollution now, and deliver well over one gigaton, or a billion metric tons, of greenhouse gas emissions reductions in 2030 – at least ten times larger than any legislation Congress has ever passed. The framework’s $555 billion investment represents the largest single investment in our clean energy economy in history, across buildings, transportation, industry, electricity, agriculture, and climate-smart practices across lands and waters.  The framework will set the United States on course to meet its climate targets, achieving a 50-52% reduction in greenhouse gas emissions below 2005 levels in 2030 in a way that grows domestic industries and good, union jobs — and advances environmental justice.

Specifically, the Build Back Better framework will:

  • Deliver substantial consumer rebates and ensure middle class families save money as they shift to clean energy and electrification. The consumer rebates and credits included in the Build Back Better framework will save the average American family hundreds of dollars per year in energy costs.  These measures include enhancement and expansion of existing home energy and efficiency tax credits, as well as the creation of a new, electrification-focused rebate program.  The framework will cut the cost of installing rooftop solar for a home by around 30 percent, shortening the payback period by around 5 years; and the framework’s electric vehicle tax credit will lower the cost of an electric vehicle that is made in America with American materials and union labor by $12,500 for a middle-class family. In addition, the framework will help rural communities tap into the clean energy opportunity through targeted grants and loans through the Department of Agriculture.
  • Ensure clean energy technology – from wind turbine blades to solar panels to electric cars – will be built in the United States with American made steel and other materials, creating hundreds of thousands of good jobs here at home. The Build Back Better legislation will target incentives to grow domestic supply chains in solar, wind, and other critical industries in communities on the frontlines of the energy transition.  In addition, the framework will boost the competitiveness of existing industries, like steel, cement, and aluminum, through grants, loans, tax credits, and procurement to drive capital investment in the decarbonization and revitalization of American manufacturing.
  • Advance environmental justice through a new Clean Energy and Sustainability Accelerator that will invest in projects around the country, while delivering 40% of the benefits of investment to disadvantaged communities, as part of the President’s Justice40 initiative. The framework will also fund port electrification; facilitate the deployment of cleaner transit, buses, and trucks; and support critical community capacity building, including grants to environmental justice communities.  In addition, the framework will create a new Civilian Climate Corps – with over 300,000 members that look like America. This diverse new workforce will conserve our public lands, bolster community resilience, and address the changing climate, all while putting good-paying union jobs within reach for more Americans.
  • Bolster resilience and natural solutions to climate change through a historic investment in coastal restoration, forest management, and soil conservation. The framework will provide resources to farmers, ranchers, and forestland owners, supporting their efforts to reduce emissions. At its peak, the increased investments in climate smart agriculture alone could reach roughly 130 million cropland acres per year, representing as many as 240,000 farms. Farmers, ranchers, and forestland owners have long demonstrated leadership in environmental stewardship with strategies that provide benefits for the farm, the environment, and the public. These investments will help meet the demand from the farming community for conservation support and enable producers to realize the full potential of climate benefits from agriculture.

The biggest expansion of affordable health care in a decade:

Health care should be a right, not a privilege, and Americans facing illness should never have when was social security first taxed worry about how they are going to pay for their treatment. While the historic Affordable Care Act (ACA) reduced the number of uninsured Americans by more than 20 million, extended critical consumer protections to more than 100 million people, and strengthened and improved the nation’s health care system, too many Americans continue to struggle to afford care. About 30 million people were uninsured in 2019 before President Biden took office, and coverage under the ACA (even with the premium subsidies) was too expensive for many families. In addition to investing in protecting Americans from future pandemics, the Build Back Better framework will expand access to affordable coverage. In all, the framework will be the largest expansion of health care coverage since the Affordable Care Act. Specifically, the framework will:

  • Strengthen the Affordable Care Act and reduce premiums for 9 million Americans. The framework will reduce premiums for more than 9 million Americans who buy insurance through the Affordable Care Act Marketplace by an average of $600 per person per year. For example, a family of four earning $80,000 per year would save nearly $3,000 per year (or $246 per month) on health insurance premiums. Experts predict that more than 3 million people who would otherwise be uninsured will gain health insurance.
  • Close the Medicaid coverage gap, leading 4 million uninsured people to gain coverage. The Build Back Better framework will deliver health care coverage through Affordable Care Act premium tax credits to up to 4 million uninsured people in states that have locked them out of Medicaid. A 40-year old in the coverage gap would have to pay $450 per month for benchmark coverage – more than half of their income in many cases. The framework provides individuals $0 premiums, finally making health care affordable and accessible.
  • Expand Medicare to cover hearing benefits. Only 30% of seniors over the age of 70 who could benefit from hearing aids have ever used them. The Build Back Better framework will expand Medicare to cover hearing services, so that older Americans can access the affordable care they need.

The most significant effort to bring down costs and strengthen the middle class in generations:

In addition to major investments in children and care, climate, and health, the Build Back Better framework includes targeted investments that will reduce costs that hold back middle-class families and grow our economy from the bottom up and the middle out. Specifically, the framework will:

  • Make the single largest and most comprehensive investment in affordable housing in history. The framework will enable the construction, rehabilitation, and improvement of more than 1 million affordable homes, boosting housing supply and reducing price pressures for renters and homeowners. It will address the capital needs of the public housing stock in big cities and rural communities all across America and ensure it is not only safe and habitable but healthier and more energy efficient as well. It will make a historic investment in rental assistance, expanding vouchers to hundreds of thousands of additional families. And, it includes one of the largest investments in down payment assistance in history, enabling hundreds of thousands of first-generation homebuyers to purchase their first home and build wealth. This legislation will create more equitable communities, through investing in community-led redevelopments projects in historically under-resourced neighborhoods and removing lead paint from hundreds of thousands of homes, as well as by incentivizing state and local zoning reforms that enable more families to reside in higher opportunity neighborhoods.
  • Extend the expanded Earned Income Tax Credit (EITC) for around 17 million low-wage workers. Before this year, the federal tax code taxed low-wage childless workers into poverty or deeper into poverty — the only group of workers it treated this way. The Build Back Better framework will extend the American Rescue Plan’s tripling of the credit for childless workers, benefiting 17 million low-wage workers, many of whom are essential workers, including cashiers, cooks, delivery drivers, food preparation workers, and childcare providers. For example, a childless worker who works 30 hours per week at $9 per hour earns income that, after taxes, leaves them below the federal poverty line. By increasing her EITC to more than $1,100, this expansion helps pull such workers out of poverty.
  • Expand access to affordable, high-quality education beyond high school. Education beyond high school is increasingly important for economic growth and competitiveness in the 21st century, even as it has become unaffordable for too many families. The Build Back Better framework will make education beyond high school – including training for high-paying jobs available now – more affordable. Specifically, the framework will increase the maximum Pell Grant by $550 for more the more than 5 million students enrolled in public and private, non-profit colleges and expand access to DREAMers. It will also make historic investments in Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and minority-serving institutions (MSIs) to build capacity, modernize research infrastructure, and provide financial aid to low-income students. And, it will invest in practices that help more students complete their degree or credential. The framework will help more people access quality training that leads to good, union, and middle-class jobs. It will enable community colleges to train hundreds of thousands of students, create sector-based training opportunity with in-demand training for at least hundreds of thousands of workers, and invest in proven approaches like Registered Apprenticeships and programs to support underserved communities. The framework will increase the Labor Department’s annual spending on workforce development by 50% for each of the next 5 years.
  • Promote nutrition security to support children’s health. The Build Back Better framework will help children reach their full potential by investing in nutrition security year-round. The legislation will expand free school meals to 8.9 million children during the school year and provide a $65 per child per month benefit to the families of 30 million children to purchase food during the summer. 
  • Strengthen the middle class through a historic investment in equity, safety, and fairness. The legislation makes a transformative investment in Rural America through a new Rural Partnership Program that will empower rural regions, including Tribal Nations and territories, by providing flexible funding for locally-led projects. The Build Back Better framework will also make an historic investment in maternal health and establish a new and innovative community violence intervention initiative, in addition to investing in small businesses and preparing the nation for future pandemics and supply chain disruptions.

The Build Back Better framework includes a $100 billion investment that will improve our immigration system by providing long awaited relief to millions through reconciliation, and making enhancements to reduce backlogs, expand legal representation, and make the asylum system and border processing more efficient and humane.

Fully Paying for Historic Investments

The plan is fully paid for by asking more from the very largest corporations and the wealthiest Americans, and by repealing the Trump Administration’s rebate rule. The framework will help reverse the windfall delivered to wealthy Americans and large corporations in the 2017 tax cut and invest the revenue in American families and workers. No one making under $400,000 will pay a penny more in taxes.

Specifically, the framework will:

  • Stop large, profitable corporations from paying zero in tax and tax corporations that buyback stock rather than invest in the company. In 2019, the largest corporations in the United States paid just 8 percent in taxes, and many paid nothing at all. President Biden believes this is fundamentally unfair. The Build Back Better framework will impose a 15% minimum tax on the corporate profits that large corporations—those with over $1 billion in profits—report to shareholders.  This means that if a large corporation says it is earning a billion dollars, then it can’t avoid paying taxes. The framework also includes a 1% surcharge on corporate stock buybacks, which corporate executives too often use to enrich themselves rather than investing workers and growing their businesses.
  • Stop rewarding corporations for shipping jobs and profits overseas. President Biden has led the world to stop the race to the bottom in corporate taxes, while also calling for an end to incentives that encourage corporations to ship jobs and profits overseas. That’s why the President won an agreement among 136 countries on a 15% global minimum tax. This framework will help finish the job. Consistent with that agreement, it’d adopt a 15% country-by-country minimum tax on foreign profits of U.S. corporations, so that they no longer receive massive tax benefits from shifting profits and jobs abroad.  And, these reforms would ensure that other countries abide by the agreement by imposing a penalty rate on any foreign corporations based in countries that do not.  Other countries will not be able to take advantage by pursuing a race to the bottom.
  • Ask the highest income Americans to pay their fair share. The Build Back Better framework includes a new surtax on the income of multi-millionaires and billionaires – the wealthiest 0.02 percent of Americans. It would apply a 5 percent rate above income of $10 million, and an additional 3 percent surtax on income above $25 million. The Build Back Better framework will also close the loopholes that allows some wealthy taxpayers to avoid paying the 3.8% Medicare tax on their earnings.
  • Invest in overhauling tax administration, so the wealthy finally pay what they owe. Regular workers pay the taxes they owe on their wages and salaries—with a 99 percent compliance rate—while too many wealthy taxpayers hide their income from the IRS so they don’t have to pay. Yet, the IRS does not have the resources it needs to pursue wealthy tax cheats. As a result of budget cuts, audit rates on those making over $1 million per year fell by over 60 percent over the last decade, and the IRS audits only 75,000 of the 4.2 million partnership returns filed each year. The result of a gutted IRS is a two-tiered tax system, where wage earners pay all the taxes they owe, but the top 1 percent evades over $160 billion per year in taxes. The framework will create a fairer tax system through transformation investments in the IRS: hiring enforcement agents who are trained to pursue wealthy evaders, modernizing outdated IRS technology, and investing in taxpayer service, so regular Americans can get their questions answered and access to the credits and benefits they are entitled to. Additional enforcement resources will be focused on pursuing those with the highest incomes; not Americans with income less than $400,000.
Investments$ billion
Child Care and Preschool400
Home Care150
Child Tax & Earned Income Tax Credits200
Clean Energy and Climate Investments555
ACA Credits, Including in Uncovered States130
Medicare Hearing35
Housing150
Higher Ed and Workforce40
Equity & Other Investments90
Total1750
Immigration100
Offsets – Estimates, Subject to Confirmation$ billion
15% Corporate Minimum Tax on Large Corporations325
Stock Buybacks Tax125
Corporate International Reform to Stop Rewarding Companies That Ship Jobs and When was social security first taxed Overseas350
AGI Surcharge on the Top 0.02%230
Close Medicare Tax Loophole for Wealthy250
Limit Business Losses for the Wealthy170
IRS Investments to Close the Tax Gap400
Prescription Drugs: Repeal Rebate Rule145
Up to a Total of:1995

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Источник: https://www.whitehouse.gov/briefing-room/statements-releases/2021/10/28/president-biden-announces-the-build-back-better-framework/
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