Finance / Opinion / Politics

Every American Will Shoulder Burden of President Biden’s Recovery-Killing Tax Grab

taxAppearing during a Ways and Means Republican meeting on President Biden’s Recovery-Killing Tax Grab, American Action Forum’s Douglas Holtz-Eakin provided a breakdown of President Biden’s harmful tax policies. Here are quick takeaways from his remarks, which you can watch here.

Assuming the strongest possible economic growth for infrastructure, President Biden’s plan is STILL a recipe for stagnation and decline. If Democrats get their way:

  • The economy will shrink by 2 percent
  • Investment in the U.S. will shrink by about 5 percent
  • Capital will flow out of the United States
  • Real wages will go flat

This is based on a forthcoming study previewed by Holtz-Eakin using President Biden’s assumptions at face value, including raising $3.3 trillion in taxes, spending $3.3 trillion on infrastructure and R&D, and assuming the best, meaning the highest impacts, of R&D and infrastructure and productivity. The study was done based on the same model as how the Joint Committee on Taxation would analyze the macroeconomic impacts of a tax bill, with the infrastructure pieces taken directly from the Congressional Budget Office.

Democrats’ tax increases won’t be restricted to the rich. Biden tax proposals will:

  • Harm growth in wealth and investment
  • Harm innovation
  • Harm growth in productivity and real wages

Biden’s tax policy is the opposite of the tax reform begun in 2017. This is going to be damaging tax policy. 

  • An enormous tax hike: This is a tax increase taken at face value of $3.3 trillion dollars over the next 10 years, including:
    • Sharp increases in the corporate rate at 28 percent
    • A global minimum tax of 21 percent
    • A phase-out of the business deduction for small businesses and pass-through entities
    • Raises the tax rates on investment income to ordinary income for some high-income individuals
    • Creates a new Death Tax
    • Raises the top rate which would include older workers near retirement age, to 39.6 percent
    • Applies to Social Security tax to labor income above $400,000

The people who ultimately lose are working Americans who will find even working full time, they make less. 

  • This is the last thing that the United States should want to do, particularly coming out of the sharp recession that we just experienced.

There is no evidence for Democrats’ claims that tax hikes will pay for themselves.

  • There is no evidence in the productivity literature that infrastructure is so good that it will outweigh tax impacts.
  • It’s very hard to raise national productivity in a significant way with infrastructure.

Democrats’ have already lost credibility on being fiscally responsible given their recently passed $1.9 trillion bill.

  • The American Rescue Plan is an enormous debt increase with temporary provisions that Democrats seek to make permanent, resulting in $2-$3 trillion in structural deficits over the next 10 years.

To watch Mr. Holtz-Eakin’s remarks, click here.

Reprinted with Permission from US Committee on Ways and Means

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Edward
6 months ago

I see in the comments the usual idiotic, knee-jerk response to a speculative, inaccurate, overdone attack on a proposal that will be changed dozens of times before it gets on to the floor of Congress.

And so it goes…

Frankie Capps
6 months ago

If we don’t stop the anti American left-wing our country and our liberty are in deep peril. They must be stopped

Elena
6 months ago

Is there not and oversight committees to prevent Biden from pursuing these types of policies that will harm the country and it’s taxpayers? Why is he been given freedom to do whatever he or his advisors want.

PaulE
6 months ago
Reply to  Elena

All Congressional oversight committees are controlled by Democrats. Remember the results of last year’s election? Republicans now control nothing in D.C.

Kim
6 months ago

Cost of living increases have already shown up, with gasoline about $1.00 more per gallon than the cost a few months ago. That penalizes anyone who drives to work or drives for a living. So, the lower and middle income groups are already being taxed more. I was looking for a simple product that cost a buck or two a few years ago, and the same item now costs $6.00 (made in china–no, I didn’t buy it).

Blame it on the new Green Deal or the democrats in general, it doesn’t matter; they just want us parted from our money–all of us, and in any way they can pull it off.

Douglas Holtz-Eakin stated that the two best things the government can do to restore the economy is to not increase taxes and to get out of the way. There is much pent-up demand for “things” and vacations, visiting family and going to restaurants that the economy will come roaring back if…if Biden were not president. But that’s not how they roll. So much was lost last year, and Biden’s policies will do nothing to restore confidence in the American public. What will it take for most of us to realize how an economy prospers and what makes it fail? How many can actually make the connection between good policy and their own financial well-being?

In the “press conference” yesterday, Biden claimed that we’ll see a “6% growth in the GDP” (did he mean a 6% GDP?). Imagine what could have happened with a business-friendly president in the White House! We don’t have to imagine; we saw it happen when President Trump lived there. And that “press conference”–oh my, what a problem we have.

Last edited 6 months ago by Kim
PaulE
6 months ago
Reply to  Kim

Don’t worry. Democrat policies will kill our economy by burying it in massive tax hikes and over regulation.

Kim
6 months ago
Reply to  PaulE

One of my California relatives and spouse basked in the generous Trump tax cuts in years past. But now, with Biden aiming for an almost 40% tax rate for them, they might finally be forced to admit they were wrong voting for the dems. (Of course, they won’t admit their mistake; they’re globalists after all.)Wisely, they’re preparing to move out of the state.

Arthur McCorkle
6 months ago
Reply to  Kim

New T-shirt..DONT BLAME ME I VOTED FOR TRUMP….Soon those that voted for Biden will realize that they have made a tremendous mistake in judgment. For those that never realize it or wouldn’t admit it they did, well I fear that they are one of the major reasons America is in the turmoil that it suffers today. God help our wonderful country.

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