When Joe Biden unveiled his $3 trillion infrastructure bill, he told the American people that no one making less than $400,000 a year would have their taxes raised. He said, “No one making under $400,000 will see their federal taxes go up, period.”
In the immortal words of Independence Day Defense Secretary Albert Nimziki, “That’s not entirely accurate.”
On Friday, the president said that a two-partner family would be impacted if their combined income crosses $400,000. He also claimed that jacking up corporate and business taxes right at the beginning of the recovery from the pandemic “will not slow the economy at all.”
Does anyone else get the feeling that Biden and his advisors are just a bit delusional?
“It is a once-in-a-generation investment in our economic future, a chance to win the future — paid for by asking big corporations, many of which do not pay any taxes at all, just to begin to pay their fair share. And it won’t raise a penny of tax on a family making less than $400,000 a year, no federal tax, no addition,” he said.
The president’s description of the tax hike as applying to any “family” that makes more than $400,000 per year is a significant change from his earlier remarks, and could mean families on the cusp of affluence in areas with high costs of living are impacted.
In an interview last month with ABC News, Biden said, “If you make less than $400,000, you won’t see one single penny in additional federal tax.”
The number of families with two incomes exceeding $400,000 is a lot more than single taxpayers earning that amount. And if you have two children and a house and live in an expensive real estate market, even $400K doesn’t make one “wealthy.”
But it’s the rise in business taxes that should worry us all. Despite mountains of evidence to the contrary, Biden insists that raising taxes doesn’t slow the economy. “Raising taxes, the studies show, will not slow the economy at all,” he said.
When Biden starts talking about corporations and “the wealthy” paying their “fair share” in taxes, be afraid. Be very afraid.
Biden spoke after surprisingly strong job growth figures for March that indicated nearly 916,000 new jobs were created, lowering the unemployment rate to about 6 percent.
Biden’s plan would boost the corporate tax rate from 21 percent to 28 percent. It was lowered in 2017 by President Donald Trump’s tax reform law from 35 percent. The plan also would impose new taxes on overseas business profits and could include an increase on capital gains taxes on investments like stocks and real estate.
Republicans in Congress oppose tax increases, but Democrats who narrowly hold the House and Senate may attempt to ram through the bill under special budget reconciliation rules that avoid the usual 60 votes needed in the Senate.
Another problem with raising taxes is that it never generates the tax revenue promised by politicians. This has been proved over and over again in Europe when “wealth taxes” have been tried.
A growing economy would probably generate as much tax revenue as Biden’s grandiose tax-raising schemes. Maybe someday, politicians will figure that out.