Deficit Spending is simply a scheme for the ‘hidden’ confiscation of wealth. Alan Greenspan
The Tax Foundation estimates that Biden’s “Build Back Better” tax and spending legislation will reduce long-run economic output by 0.98%, and eliminate 303,000 full-time equivalent jobs. It would also reduce after-tax incomes for the top 80% of taxpayers by 0.68% over the long-run.
Like a lot of taxpayers, you are probably thinking that only the “super-rich” will have to pay. Didn’t Biden promise to raise taxes only on those making over $400,000? That is what they want you to believe. In reality, 64 cents out of every dollar workers earn will be needed to pay for the left’s $6.4 trillion spending spree.
While Biden is not directly raising taxes on those earning less than $400,000, some low to middle income families would see their tax bill rise indirectly due to the higher rates imposed on corporations.
Three-quarters of households earning between $75,000 and $100,000 a year would pay an additional $440 in taxes and about 69% of those earning between $100,000 and $200,000 would see their tax bill rise by $830 on average, while 83.7% of those earning between $200,000 and $500,000 would see an increase of $2,040 on average.
Keep in mind that before the government can spend this $6.4 trillion, they have to get their hands on it. While we earn our money the old fashion way – by working for it – governments get their money by taking yours through taxation or by crowding out job and wage growth through large deficits or by devaluing your savings and paychecks by printing new cash.
A quick sampling of the tax increases proposed by Biden and his congressional comrades demonstrates that their spending spree will come at the expense of the peasants.
Biden has promised a new death tax, a repeal of Step-Up in basis, which will force families to pay an enormous extra death tax when a family business or farm passes from one generation to the next. Most of these small businesses and farms will be lost.
As if the tax code weren’t complex enough, Biden wants to introduce a new corporate tax, side-by-side with the current one, where many businesses won’t know which tax they have to pay until Tax Day. This would force those businesses to keep track of two different tax structures with two different definitions of income in order to figure out their actual tax bill. Not only would this penalizing economic growth but force companies to pass along this additional cost to consumers.
Biden has also proposed to increase corporate taxes from 21% to as much as 28%, which is more than the average European tax rate and the world average tax rate. Almost all of this burden would fall on workers. The consensus is that at least 70% of this tax hike would come out of paychecks. In fact, the most likely outcome is that wages would fall more than the value of the tax.
As a side note, in addition to all the tax increases included in his Build Back Better agenda, Biden is also pushing for a higher global minimum tax on companies’ foreign earnings based on book income rather than taxable income. It will put American companies at a disadvantage encouraging their move overseas. This tax is an essential part of Biden’s plan to greatly expand the role of the federal government in America’s economy at a level not seen since World War II.
We are still in the first year of Biden’s presidency. This gigantic spending and tax spree may be only the beginning of what he and his congressional allies have planned.
Source: Biden Making a Veiled Bid for Your Paycheck by Richard Stern, the Heritage Foundation; Build Back Better Act: Details & Analysis of the $3.5 Trillion Budget Reconciliation Bill, Tax Foundation; Biden’s tax proposal means that 60% of Americans could pay more: Here’s How Much by Megan Hennery, Fox Business