Why We Need the Build Back Better Act
I have recently moved back to the town where I grew up, after a few decades in New York City.
While I am loving country life, one change I have not loved is that garbage pickup is now done through private companies, to the tune of $138/quarter. Even worse if I have to bring items to the dump — things the private sanitation company won’t pick up, like leaf bags. The dump wanted to charge me $8 per bag of leaves. I had about twenty bags.
I chose to dump them in the woods behind my parents’ house.
Growing up, we had a town garbage pickup. My father complained about taxes, but I never heard him complain about the reliable weekly garbage pickup, which, presumably, his taxes paid for.
And so, after the House passed the Build Back Better Act last week, the usual cries came about the taxes and the deficit.
So let’s address that first. According to the Tax Foundation, the US has a tax rate of 24%, well below the 34% average of other industrialized countries. As for excise taxes (on goods such as gasoline and cigarettes), our tax is 18% and other nations are 32%.
We all hate taxes and I’m not saying we need to keep up with other nations on that score. But I will say, having visited Austria and the Czech Republic in 2019, their cities are cleaner and their transportation system (both airports and local transit) puts ours to shame. Those countries have invested in infrastructure, in the people.
As it turns out, the Build Back Better Plan (BBB) will roll back the windfall that billionaires got under the Trump tax cut. But we shouldn’t be too worried about them; they will still be far ahead of the pack, as measured against world tax rates.
Our corporate tax rate is at 21%, slightly below the average of other nations, around 23.5%.
However, it’s worth noting that the corporate tax rate has gone down significantly since 1980, when worldwide it was around 40%. So don’t cry too many crocodile tears for our “self-made” billionaires.
BBB hopes to address that by putting a 1% surcharge on corporations for stock buybacks (one way they avoid paying any taxes at all), and also by enforcing tax laws that already exist, to make sure everyone is paying their fair and legal share. Who could be against that?
We can thank the Reagan revolution for those corporate tax cuts. You may be applauding that for what it did for big business, but what else did it do?
While many corporations do charitable giving, it’s not obligatory. And so, while the corporations have run roughshod over the rest of us for forty years, we have seen a decline in social programs, crumbling infrastructure, a huge wealth gap, and regional disparities.
I don’t think Trump ever defined exactly when America was so great, despite all his repetitions of “Make America great again!” I tend to think it was his dreamy childhood in the 1950s. Well, guess what? Eisenhower’s America had high tax rates for both corporations and individuals, and he invested in infrastructure, building the huge highway system that we still enjoy today. And post-war America was thriving economically.
This growth continued into the ’70s. In fact, of all post-war presidents, percentage-wise, Johnson contributed the smallest overall percentage to the debt — even while the Vietnam War raged and there was civil unrest at home. Reagan contributed the most to the national debt. Yup, look it up.
Despite the high tax rates, those post-war decades were a time of great economic growth and a healthy, pro-union middle class. In the last forty years, we have dismantled all of that. Our pie-in-the-sky dreams of one day being a billionaire have meant many left behind at the bottom, without a safety net.
I hope all of this puts into context the usual complaints you’re going to hear from some quarters about the cost of BBB.
So, what does BBB offer?
About a third of its current $1.75 trillion budget will be toward climate change initiatives. Haven’t we had enough of the damage wrought by wildfires and freak storms in recent years? And it’s only going to get worse. BBB invests in conservation efforts, new green technology, and consumer rebates and tax credits for buying electric cars or installing solar panels. This is also good for new businesses in these fields. Who could be against this?
BBB promises to reduce prescription drug costs. Do you want a $35 cap on your insulin? Do you want hearing aids covered by Medicare? Do you want to eliminate the Medicaid coverage gap and pay less for your ACA premiums? BBB is for you.
If there is one thing we should have learned from the pandemic, it’s that disasters do not affect everyone equally. I saw this myself when some students struggled with finding private space or good internet connections for online classes, while others with more means did better. Is that fair? Internet is now part of our infrastructure and we’d better invest in it.
During the pandemic, women and people of color lost most of the jobs. While the kids had to homeschool, which parent do you think had to give up her career to be home with them? Is that fair? BBB is offering four weeks of paid leave for home emergencies — something every other industrialized country offers, at a minimum.
BBB hopes to extend the Child Care tax credit, which lifts millions of children out of the poverty level, and expand the Earned Income Tax Credit. It will also address affordable housing, on a community-by-community basis, so that neighborhoods in decline and rural regions in decline can have their needs met. BBB addresses economic growth distribution.
Nobody making under $400,000 will see their taxes increase.
Let’s stop thinking about this as deficit-building and taxation. It is an investment. As the old saying goes, “You need to spend money to make money.” Most of all, let’s stop thinking about this as a win/lose political situation. There is such a fear of this passing because, to Republicans, it will look like Biden “won.” Even though most Republicans know this will be good for their constituents. And the American people support these provisions, in some cases overwhelmingly.
Also note that, originally, the progressive Democrats wanted a $6 trillion plan. They compromised to $3 billion, and now $1.75. Likely it will be pared down further because of Manchin and Sinema — and every cowardly Republican.
Don’t be scared. If these are the kinds of investments you want for yourself, call your Senator — whether Republican or Democrat — today and tell them to back it. Do it for yourself, for your kids, and for the planet.