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Democrat Free Lunch Tab Charged to You and Your Children
Biden Democrats are cooking up a huge toxic brew of soup kitchen spending that will be charged our nation’s vastly overdrawn credit card.
According to the plan, this includes the previous $1.9 trillion COVID-19 relief package that was financed entirely by borrowed money, at least $2.3 trillion everything-including-kitchen-sink proposals for ”infrastructure,” and now another $1.8 trillion for family benefits — including free college — that don’t fit in that economic sink.
Altogether, this adds up to about $6 trillion in new debt — and rapidly counting — of not-so-free money paid for by raising taxes for you and your heirs, silent raids on Social Security and 401(k) pension accounts, deficit-delivering déjà vu Obama-Biden-era green energy boondoggles, and economy-crushing monetary and commodity cost inflation.
Oh … and you thought this was all going to be paid for by taxing those ”rich people and big corporations”?
Middle-Class Immunity Myth
The Biden administration plan would raise about $1 trillion on either individuals or households (it’s unclear which) making over $400,000 per year. He argues that those making less than this wouldn’t see a tax increase, but ultimately the cost of increased taxes on business and capital income are passed on to consumers.
Joe Biden has repeatedly promised that ”no one who earns less than $400,000 a year would see ”a single penny” of tax increase or any ”new taxes.” Recall that in 2008, Barack Obama and Biden made a similar pledge never to raise taxes of any sort on anyone earning less than $250,000, a vow broken with impunity.
How does this ”no-new-tax on those making less than $400,000” square with what Biden emphatically told CNN that he would reimpose the Obamacare tax penalty on those who decline to purchase Obamacare? That tax — between $605 and $2,085 — hit 5 million households per year, three-quarters of whom made less than $50,000.
And didn’t Biden say that, if elected, he would repeal the Trump administration’s tax cut, which would result in a $2,000 tax hike for a median $73,000 annual for a family of four, and $1,300 for a single parent with one child? Does trading a tax cut for a higher tax burden qualify as raising taxes for non-rich median-income families?
Taxing Us to Death and Beyond
Biden’s new proposal will also impose an additional death tax. When a loved one dies, this will automatically force the recipient of any asset to pay an immediate capital gains tax based on the original acquisition cost from decades prior. Later, if you sell the asset, you’ll pay capital gains again.
The Biden plan would end the tax exemption whereby heirs pay taxes on gains since the time of the prior asset owner’s death; a provision known as the ”tax-free-step-up” in basis has been part of the tax code since 1921. This would raise taxes at death significantly, not only for ”affluent” Americans but also for hard-working heirs of family-owned farms.
Under a new ”step-up” provision, untaxed gains on instruments at death, such as stock, land, or a home, would likely be treated as a sale and taxed at a top 39.6% above the exemption rate of $1 million per individual.
Biden would apply full Social Security wage income taxation for those making between $400,000 and $1 million annually. This would be in addition to the payroll tax paid on wage income up to the current income cap of $142,800. For small businesses, this would be a large tax increase that would make it more difficult to maintain a payroll, hire new employees, and invest in the business.
Biden’s Business Bloodshed
On business taxes, Biden would raise the corporate tax from 21% to 28% and create a 15% tax on ”book income.” Such taxes would be devastating to many American businesses, which already pay a 32.8% rate after state taxes, one of the highest rates in the developed world.
According to data compiled by the Organization for Economic Co-operation and Development (OECD), the seven-point U.S. rate increase would then be higher than such key competitors as the United Kingdom (19%), China (25%), Canada (26.5%), Ireland (12.5%), Germany (29.9%), and Japan (29.74%).
As pointed out by former Federal Reserve Gov. Lawrence Lindsey, those tax increases can cost the government money in the long run. This is because as tax rates rise, the activity being taxed declines. The loss to the private side of society then increases at a geometric rate (proportional to the square of the tax rate) as rates rise. Although the government collects more revenue, its gains slower as the taxed activity declines.
Do not forget that those corporate taxes get passed back to most Americans who don’t come close to making yearly $400,000 bonanzas. It also whacks huge numbers of investors, including 53% of American households — 100 million of them — that have lifetime savings held in individual 401(k) and IRA accounts … along with prices we all pay for their services and products we depend upon.
Green New Debt Spiral
On April 1, the Capitol Hill newspaper, The Hill, ran a banner headline: ”White House Moves to Reshape Role of U.S. Capitalism.”
The lead feature reported: ”The White House is pushing an infrastructure bill that effectively transforms the relationship between the government and the private sector, making radical changes to key sectors of the economy.”
That $2.3 trillion ”infrastructure” plan — a rebranded Green New Deal plus much more — will cost American households $1,400 each year. Something north of $180 billion of that money would be spent each year to end a so-called ”climate crisis.”
When asked in a 2020 American Energy Alliance poll how much respondents would be willing to pay each year to address climate change, ”the median answer (which had been trending towards 50 dollars for a number of years) was 20 dollars, with 32% of respondents answering ‘zero.”’
These projects will be paid for by all energy consumers, taxpayers, ratepayers — we ”ordinary people” — through rising prices and taxes, lower jobs and wages, and all-out destruction of fossil-fueled economic prosperity.
As a final drag on the economy, Joe wants to provide hundreds of billions of dollars in additional refundable tax credits for renewable energy (imagine the Obama-Biden administration’s Solyndra scam on steroids) while sharply increasing taxes on oil and gas producers that rely on fracking which has finally made America energy independent.
Remember this when your lights go out, your home freezes, and both your plug-in car and pocketbook run out of juice.
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