Who gets big tax relief in Washington state – and who doesn’t – under Biden’s tax plan


By David Lightman / McClatchy Press Office

The congressional district in Washington state that would benefit the most from President Joe Biden’s tax plan next year is represented by Republican Dan Newhouse of the 4th District in central Washington, according to a Tax Foundation study.

And the district in the state that would benefit the least is represented by one of the main progressive Democrats in Congress, Pramila Jayapal of Seattle from the 7th District.

Washington has 10 congressional districts, seven represented by Democrats and three by Republicans.

The average taxpayer would see tax cuts in just two districts, the one represented by Newhouse and the Olympia-Tacoma area represented by Representative Marilyn Strickland, a Democrat. But the study says that by 2026, when some programs end, the average taxpayer in each district will experience an increase.

The House this week took its first step toward a possible final vote on Biden’s budget plan, a package of $ 3.5 trillion that could later this year include tax breaks for the middle and lower classes and increases for more. many companies and the rich.

Biden’s proposals include increasing the tax rate on top earners, now from 37%, to 39.6%, the rate in effect before the 2017 tax cuts by Republicans.

Biden also wants to extend this year’s increase in the child tax credit until 2025, make this year’s increases in the child and dependents tax credit permanent, and increase the corporate tax rate, now from 21% to 28%.

The Tax Foundation, seen as somewhat conservative, analyzed the impact of all of Biden’s tax proposals on Washington districts.

How much each pays or saves depends on where you live and how much income you earn. Critics of the analysis note that Biden has pledged not to raise taxes for anyone earning less than $ 400,000, so the averages are an unfair guide.

The analysis found that in the sprawling Newhouse District, which stretches from the Canadian border to the Oregon border and includes Yakima, Richland, Pasco and Kennewick, the average taxpayer would save $ 559 next year.

The cuts would continue until 2025, but by 2026 the average district taxpayer would see an increase of $ 701. The increases are expected to continue until 2031, the last year considered by the study.

Taxes would rise because incomes are expected to rise and many of the big tax cuts, such as the child care credit, would expire during the period. The study also predicts that if corporate tax increases are first borne by shareholders, over time workers feel the impact.

Newhouse told McClatchy he was in favor of lower taxes and a fairer, simpler tax code, and that he did not support the Biden budget package.

“President Biden and his cohort of far-left Democrats are racking up debt Americans cannot afford. I am adamantly opposed to this runaway spending program which will only create an unstable outlook for our economy, the future of our nation and the next generation of Americans, ”he said.

Too much federal money, he said, goes to overspending.

“So the next time the Biden administration tells you it needs to raise your taxes, find out where that money is going first, and be prepared to speak out against unnecessary spending. We cannot let them continue to experiment on our republic by pocketing your pockets, ”the congressman said in his weekly column in April.

Democratic districts that would see higher average taxes next year include: 1st (Suzan DelBene), $ 1,779; 2nd (Rick Larsen), $ 391; 6th (Derek Kilmer), $ 477; 8th (Kim Schrier), $ 741 and 9th (Adam Smith), $ 1,503.

The taxpayers of the 10th arrondissement, represented by Strickland, would save an average of $ 64. The district includes parts of Thurston, Pierce and Mason and Olympia counties. The break won’t last long; in 2023, the average would be an increase of $ 8, and the increases would continue until 2031.

Among Republicans, the average impact on taxpayers would include increases in the 3rd arrondissement (Jaime Herrera Beutler), $ 381, and the 5th (Cathy McMorris Rodgers), $ 97.

Critics of the data say it is misleading.

As part of the Biden plan, “no one earning less than $ 400,000 will see their taxes increase, so when you take millionaires and billionaires out of the mix, the Democrats’ tax cuts for working, middle-class families in. each congressional district are much larger and wider than these averages show, ”said Henry Connelly, spokesperson for House Speaker Nancy Pelosi, D-Calif.

The Tax Foundation used 14 Biden proposals in its analysis. One of the biggest potential cuts is the extension of the child tax credit to 2025.

The credit was increased this year, and eligible families could receive up to $ 250 to $ 300, depending on the child’s age, each month this year starting in July.

In the Newhouse district, several credits would be available as the adjusted average gross income next year is estimated at $ 68,613.

The average child tax credit would be $ 1,107, according to the analysis.

Taxpayers would also benefit from making the child care and dependent care tax credit permanent and expanding the earned income tax credit. Some of the reliefs would be somewhat offset by the impact of corporate tax increases.

The Jayapal district offers a striking contrast. The average adjusted gross income is $ 154,126, and the average taxpayer would pay $ 2,754 more in taxes next year under the Biden plan.

Raising the top tax bracket would mean an average tax increase of $ 516. The increase in the corporate tax rate would end up costing district taxpayers $ 1,125.

Credits available to middle and low income people would mean less. The child tax credit, which is being phased out for higher incomes, would offer an average reduction of $ 162, and the expanded earned income tax credit would save an average of $ 17.

Source link

Leave A Reply

Your email address will not be published.