Biden’s Tax Promises are ‘Bunk’
President Joe Biden has proposed a corporate hike to fund a portion of his infrastructure/jobs bill. The thinking is rather simple, and we can see it in the talking points: big companies don’t pay their fair share, so a hike is entirely justified.
But there’s a bigger problem with Mr. Biden’s tax plans. He’s promised, and re-promised, that no one who makes less than $400,000 a year will have their taxes increased. According to economist Veronique de Rugy, that’s “bunk:”
…the sad truth is that with this president’s insane propensity for unconstrained government spending, he shouldn’t make such a promise in the first place. He has already added $1.9 trillion to the enormously inflated federal credit card and is planning on throwing another almost $4 trillion on it in what he deems infrastructure spending. If he sticks to his campaign promises, Biden plans to splurge $11 trillion in additional spending over a decade. Meanwhile, his proposed tax hikes are estimated to reap $2.1 to $2.8 trillion. In other words, for every $5 or $6 in new spending, $1 will be paid for in new taxes, and the rest goes on the nation’s credit card.
Biden is following in a long line of politicians who run up the nation’s credit card bill. But de Rugy notes Biden’s no tax hike for those earning less than $400,000 is particularly noxious:
…the burden of Biden’s corporate tax-rate hike will inevitably fall on corporations’ workers and shareholders (which includes almost everyone with a retirement plan), many of whom earn much less than $400,000 a year. Workers might not personally be sending more or bigger checks to the IRS, but they will still suffer higher taxation in the form of lower wages, as well as higher prices for consumer goods and services.
Economists aren’t sure how much of the hike will fall on workers. Estimates range from 66% to 100% of the tax falling on workers in the form of lower wages. The bottom line is that nobody can determine who truly bears the burden of a tax just by looking at where or on whom it is formally imposed, despite what the tax is called.
In other words, you will pay for all that spending…no matter how much, or how little, you make.
Image Credit: Gage Skidmore Flickr