By David Lawder
WASHINGTON (Reuters) – Five former US treasury secretaries — four Democrats and one Republican — expressed support for a $430 billion proposal for drugs, energy and taxes on Wednesday, saying it would cut costs for middle-class families. would decrease.
The statement of former secretaries Robert Rubin, Larry Summers, Jacob Lew, Tim Geithner and Henry Paulson echoes a letter https://home.treasury.gov/system/files/136/Inflation-Reduction-Act-Letter-to-Congress- 20200802.pdf that current Treasury Secretary Janet Yellen sent to congressional leaders on Tuesday that the bill would not raise taxes for Americans earning less than $400,000.
The statement excluded Steven Mnuchin, the most recent former secretary, who served in the Republican administration of former President Donald Trump. Paulson, the only Republican in the group, supports environmental issues, including the clean energy transition.
Republicans have argued that the bill would break President Biden’s promise not to raise taxes to that level due to an analysis of distributional effects by a Joint Tax Committee https://www.finance.senate.gov/imo/media/ doc/jct_distributional_effects_inflation_reduction_act.pdf of income and taxes from the legislation known as the “Inflation Reduction Act of 2022”.
The JCT analysis shows that higher taxes paid by corporations would indirectly increase the effective tax burden of Americans with incomes of $200,000 or less by $16.7 billion by 2023, through income-reducing effects.
Former treasury ministers said in a statement from Summers’ Harvard University office that the bill was “funded by prudent tax policies that will collect more from top earners and large corporations.
“Taxes owed or paid will not increase for families earning less than $400,000 a year. And the additional taxes levied on businesses will not reflect increases in the corporate tax rate, but rather recovering income lost through tax avoidance and provisions. who benefit the most. prosperous,” they said.
The secretaries also said the JCT analysis selectively presented the bill’s distributional effects, but failed to demonstrate the benefits for middle-class families, from lower prescription drug prices to more affordable energy.
“This legislation will help increase U.S. competitiveness, address our climate crisis, lower costs for families and fight inflation — and should be passed by Congress immediately,” the former secretaries said.
Summers was critical of the Biden administration’s $1.9 trillion US bailout COVID-19 aid package last year, arguing that it was overdone and would fuel ongoing inflation.
The proposed legislation would provide new federal funding to significantly reduce U.S. carbon dioxide emissions that contribute to climate change and allow Medicare, the federal health insurance program for the elderly and disabled, to negotiate lower pharmaceutical prices.
The bill would be funded by a new 15% domestic corporate tax on large corporations with more than $1 billion in book income, while some credits and deductions benefit wealthy Americans.
(Reporting by David Lawder; editing by Chizu Nomiyama)