funded by these television companies and more, including cox. >> homework can be hard. squatting in a diner for internetwork is even harder. that is why we are providing low income students access to affordable internet. so homer can just be homework. cox connects to compete. >> cox, along with these aleut -- other television providers, giving you a front row seat to democracy. >> joining us this morning is garrett watson, senior policy analyst with the tax foundation to talk about the democratic proposal for the so-called inflation reduction act. the tax provision, specifically in this legislation. garrett watson, you did an announcement of this bill before there were changes made to appease senator sinema any talk about the changes and your analysis? guest: there were several changes made over the last

couple of days before the act passed the senate. one was a proposal to raise taxes on interests, of compensation earned by certain folks in the financial industry was removed from that legislation on request of the senator sinema. there are a focus on smaller changes to a proposed book tax that would be applied to large corporations as well as some other large changes related to the spending side and tax changes. this legislation would raise revenue and reduce the deficit by $300 billion over the next 10 years but it would come at the expense of lower growth because of the tax hike. hike. every day, people to know about the after-tax income due to the prior health care subsidies and energy credits in the bill over the next 10 years but we do find in the long run because a lot of that expires you have a lower

income tax income because of those higher taxes as well. host: how does this work but it would impact american taxpayers? overall the higher taxes are the corporations and high income individuals. we have to remember who actually pays the tax directly is not necessarily the person who bears the burden of the tax. what we find is that workers and people who own corporate stocks in their retirement accounts are going to bear part of the burden of this corporate tax change through lower wages and lower values in their retirement and investment accounts. most of this will be borne by higher income individuals. it is still a trade-off that needs to be highlighted. host: who are those people the that have retirement funds that

this would impact them substantially enough? guest: about 40% of americans are more that shown retirement accounts. they are going to see some that will be affected. after-tax income in the long run, it's a bit higher for households at the top because they do have more stock overall. i think the central part of it, what ends up happening it's been health care subsidies, the drug provisions but some of the stuff does expire and that does make a difference. there needs to be a new conversation especially in 2025 and 2032 when a lot of this is expiring about how to expand that. or if that becomes permanent. we will have to go back to the tax guide and think about the trade-offs there. host: what are the provisions you are talking about?

increase but as 1% tax on buybacks. does this impact, is there a way for people who do stuff to pass this along? or is is going to truly put those who do, those executives who do stock buybacks? guest: the 1% tax on the value of stock buyback every year and that is going to be remitted from the firms themselves. it's going to have a similar effect by paying additional tax on a buyback it makes a decision not to engage in big -- buybacks also to invest or remit returns to shareholders. most of that, many of which are higher income overall. i think the big question there is novel.

it has not been tried before it there are already questions about how domestic firms might be hit versus foreign firms they may not be affected by this. there are questions that need to be ironed out. host: how much revenue does this bring in? guest: so it rings back about $80 billion, that about washes out with the other changes in the legislation. overall the reduction in the deficit will be about the same coming out of the senate then it was when it was originally pitched. host: which is what? guest: about $300 billion. a big part of that includes higher enforcement. that includes $200 billion in additional revenue. the official scorekeeper expects to bring it because enforcement. 100 billion dollars from the text changes.

host: let's talk about other things you have mentioned. the expanded health insurance premium tax credit. explain a little more, how does this work? guest: as part of the rescue plan act that was past the beginning of 2021, there was an extension through an expansion of health care subsidies that were initially set up. the challenge was at about 400% of the poverty line which is still very much working class americans. earning more money means a short drop off in subsidies. so part of that legislation, there was expansion of the benefits both in that income range proclaimed subsidies on health-care exchanges to more health insurance. what's happening now is it has been scheduled to expire or has expired and they are looking to continue to provide those benefits and this legislation is

through the end of 2025. without that change it would expire the end of this year, and most people would see an increase in their premium because that benefit would no longer be available. that raises the question of what are we going to do in 2025? are we going to continue to provide it? it talks about the ballpark of $25 million a year. they might have to reconsider at that point with -- which lines up with other tax tinges. host: let's ask our view is here to join and in the conversation. republican, democrats, independents the phone lines are on your screen begin dialing in. garrett watson is here to take your questions on this inflation reduction act. again on the energy, tax credits for buying electric and hydrogen vehicles and making energy

efficient home improvements. tell us the impact of it. guest: the inflation reduction act provides a little over $50 billion in tax credits for renewable and green energy of production of the energy and investing in more energy invested -- energy efficient homes and cars. as well as everyday consumers. they want to follow well-known -- 7500 dollars for cars that are electric or pop plug-in hybrid that is going to be a big one. the other thing i did was a lot of these credits expire every year. there is a lot of uncertainty for consumers and firms trying to invest. most of them extend through 2031 or 2032. the -- there is stability there. after 20 to five a lot of this

is mark technology neutral design which means incentivizing any given particular technology like solar or wind. you want to incentivize production. so, that's going to be a shift there. the trade-off is there are not a lot of permanent -- there are concerns. we will have to watch and see how that is picked up and what the impact is. host: tax credits for companies that build new sources of emission free electricity. we are talking about wind turbines, solar panels, expand tax credits for coal and tech -- plants that use carbon capture. all of that expires after a while? guest: a lot of it does there are two credits and investment critics that are longer-term that are targets for reducing emissions.

those will continue until we see reductions in emissions. all the other credits individuals might be relying on expire in 20 32, 2033. in the next 10 years the responsibility that didn't expect -- exist prior. sometimes they apply retroactively. host: to our viewers at this is your chance to call in with your questions and comments about the tax provisions. republicans (202) 748-8001. democrats (202) 748-8000. and independents (202) 748-8002. you can also text with the question, include your first name, city and state. (202) 748-8003. chris in san antonio, republican. hi chris. caller: thank you for taking my call. i want to ask mr. watson on the text, the revenue that's going to come in from the increased

irs agents they get to squeeze people, is that going -- i watch the c-span over the weekend. is that going to be auditing people over 400,000? or does that include auditing people under 400,000? guest: that's a good question. the bill does try to see that the intention here is not the target the 400,000. this will not be aimed at those earnings less than 400,000 but that is pretty hard to track over time. i think there is a reason why they can't guarantee that it may not affect anyone part of that income threshold. a lot of tension will be at the top 1% who have profitable force of income, partnerships. there are a lot of text questions there. the last couple of years, there are still opportunities to

improve customer service and taxpayer services as well as just more transparency about what is going on in the irs. most of them have, the artists not a lot of ages -- it can't focus on the enforcement side. or it won't work. host: i want our viewers to listen to the top democrats senator braun white. he was on the floor defending more resources for the irs. here's what he had to say. [video clip] >> our colleagues on the other sides say somehow this is going to target the working people. another member of the committee, that's just not going to happen. the reason it's not, as my colleagues on the finance committee know so well, working people are not the problem here. they pay taxes with every single paycheck. it's right there on their

paycheck. everybody knows what taxes they pay and should they be engaged in any questionable activity showing up on these forms. they are not the problem. but as we have been told again and again by independent experts , democrats, republicans and independents. we do have a problem with big, wealthy tax cheats. they don't pay taxes with every single paycheck like firefighters and nurses. after republican budget cuts we are now in a very difficult position to go after these wealthy tax cheats who rip off the american people for billions of dollars every year. the current commissioner who joins many democratic commissioners the current one is

a republican appointee. estimated the text owed not collected could be as much as $1 trillion per year. we believe that the agency ought to have the resources to go after sophisticated, lawbreaking check -- tax cheats at the top. host: your reaction to what he had to say on the senate floor? guest: there was a good point. when we look at the tax cap, which is the term for basically the difference between taxes imposed and owed. the amount they actually pay. most is not from the average wage earner. a lot of them do their taxes and figure out what is going on there for the most part. based on the differences between

taxes paid and taxes owed comes from the top when you are looking at partnerships, investment income, because reported to the irs and taxpayers subtract. it gets trickier to deal with but i think there is a point there. i want to add there are very real tax concerns particularly for those who end up planning the earned income tax credit there are complications that in most of these folks are not trying to evade taxes or do anything incorrectly. it is just very complicated. that can make it challenging for them to plan the credits correctly and what we need their support from the irs as well as the implication of the credits so the don't end up in an audit or investigation that is unwarranted. but that is an important part of the story as well. it is paired well with enforcement. as i mentioned earlier someone

said it doesn't make sense. it's a real effort to modernize the irs, customer service of irs, everybody is focused on the time on hold to get a hold of someone. it's the same questions taxpayers may have before they ran into tax problems. i think that is very complement three. it could be bipartisan depending on how moving forward after this bill. host: james in florida, democratic color. good morning to you, go ahead. caller: good morning. do you hear me? host: we can. go ahead. caller: my question is, there was a center -- senator who mentioned the irs hired 87,000. let me finish what i'm going to say, 87,000 agents who go after

the cheaters. and i'm thinking, wait a minute. there is only 83,000 agents that work for the irs right now. is it going to be 87,000 additional employees? or is it going to be 4000 new agents? can you clarify that, please? guest: that's a good question. the projection is the irs would hire up to 87,000 full-time employees though not all of them will be auditors. a lot of them would go to customer service as i mentioned. a portion of them, some of them would be going to auditing. various other parts of the agency that work with taxpayers and so that is sort of the all in number. but it is important to plan a very real increase to the irs it will increase overall funding

given the next 10 years. the other thing to watch for is you're going to see this uptick in resources and faculty irs but the funding is a one-time thing. 10, 15 years from now what is that going to mean for all those additional agents hired, for taxpayers who have additional resourcing is there going to be for the conversation about what should be the stable long-term funding? advocates of this change say this is just getting it back to a baseline we had a decade or two prior. host: james now we got back to you. after you heard the answer, what is your reaction? caller: is it still, 50% increase in use at a different.

my understanding that right? guest: the funding will be higher, 50% higher for the next 50 years not all of them will be auditors. weatherford maine, independent. caller: good morning, thank you for taking my call. i just got to ask you the republicans tax credit that was a middle-class text credit during the trump administration, what happens to that? we were supposed to have tax returns period i have been sitting my tax return. i'm in a lot of trouble for the last three years. what happened to that? what happened to that? you come up with all these facts. let me ask [indiscernible]

what are you smiling out? host: we will get an answer. garrett watson, go ahead. guest: we work on nonpartisan policies to encourage americans. i think that is really the focus of our work. thinking about the impact of the 2017 text on every american what we found was most americans would see a text that because of a combination of the lower tax rate, the higher standard duction while other changes that happened in the tax law. two things to point out here one is text law doesn't expire in 2025 so folks will be in -- seeing differences in their taxes. we will have to see what to do about that when we get there.

things are still very complicated. people are not at a point where they can fill out a postcard despite that being a goal there is not a lot of art -- there is still a lot of work that needs to be done. particularly in the economy or working it makes their tech situation pretty complicated. there is a lot of work to be done there. a lot of ideas floating around. that leads to pressure leading up to 2025. host: here is a text from a viewer. do you believe removing the carried interest money made by people who invest other people's money was the right thing to do? guest: that's a good question i think it is a subject for debate not just politically but also amongst text all. the big discussion here is to boil it down, what kind of income is this? is this more like investment

income or return from investment? as opposed to a lot of people know. you get along -- lower tax rate. or it is more similar to working your everyday job. it is a form of laboring some. the argument on both sides about that, i can see both arguments. it seems like policymakers strived to force middle path. they say you have to hold onto that carried interest for a longer. of time. right now, it's a few years spending it up to five years and potentially the inflation -- i think that's going to be topic. it should be a change in the holding. or maybe the provisions have it right. the last i mentioned is is going

to be debate on how it might affect the private equity and financial industry. i can look not as a it's a big incentive to invest and in american start up. that's important when we are trying to teach china and other figure powers. people are very responsive to all types of it. overall, part of this legislation replaces the text hike elsewhere and offsets that. overall it didn't make a big dent out of the revenue. host: in other text from joe in d.c. what tax proposals did not make it into the final bill? mike, go ahead. guest: there were many proposals on both sides.

most of them didn't make it. everything from higher corporate tax rate which is a strong part of the proposal. it's pretty complicated and white reaching to propose capital gains are treated in this country. i heard the big thing that will remain the corporate rate there is still a pretty large debate about where the rate should be. first we argue that we should keep that rate where it is or lower but others argue may be issued go up to 25 or 20%. that was part of this debate for a long time. there are also discussions about where it should stand. the top rate is 37%. democrats opposed to is that up. continues to be a conversation particularly the reese's change at the end and the last thing i want to mention is the session

as well, the status of the $10,000 cap on the deduction for home and state local taxes. democrats have been passionate and argued there needs to be a more generous tax there because it is hiring some folks. that is something we will have to watch and see if that comes back up. i think all of those are going to be an opportunity for discussion depending on where the hall hits over the next few years. host: minnesota, republican. guest:, anybody that thinks fit being taxed. if there is a loophole, they are following the law they are not cheating. if it's not possible, it's not

possible. if anyone is foolish to think that if you do, if it increases their taxes is going to not be tied to their consumers. secondly the idea that this 87,000 new agents plus the still bait irs just ordered 450,000 guns in -- and a 5 million rounds of me addition that doesn't select they are about to get into the service industry and why does the irs need these weapons? then the fbi and justice department rating and ex-president's home and have no criminal charges under the guise of some kind of documents. host: we are going to return to that subject later on. garrett watson for focus on the text questions that you raised. guest: on the corporate tech site, i think the caller has a point. there needs to be a difference.

take advantage of what already exists and within the tax code many of which are tax incentives and text credits. incentivize certain behavior, that's really important to plan out. a lot of this stuff is dr. girl -- about an agreed on. both were individuals and corporations. we need to know the difference between that and the evasion which is where and actually a lot harder to deal with because you are dealing with those who have not been a part of the situation. it's trying to circumvent a lot of the preferences in the code. i think that would be continued to talk about that.

the irs agent site, i have to say it needs to be emphasized that in addition to auditors and to the penalty approach or folks trying to evade taxes it's not an important part of it and during hey, if i have beaten -- if i speed in this intersection i'm going to get pulled over. if they are evading their taxes and not fulfilling responsibilities under the law, they are going to be scrutinized. that encourages voluntary compliance. we need to have an agency that states they are not going to be subject to disproportionate investigation or subject to penalties and that they are helped with that agency. the enforcement with customer service and with education think -- those are important parts of the conversation we can just be focused on the corporate side.

host: let's hear from dan in massachusetts. caller: hello, thank you for having me on. i have a question so your guest supports west complicated tax systems, is that correct? guest: correct. caller: and i guess he also supports on, let's see. more simple tax code and do you support this bill? guest: as it is true, there are trade-offs, right. higher incomes for certain people in the long run but