“America’s Job Creators for a Strong Recovery,” a group of 28 business and employer trade groups, have joined forces to fight Joe Biden’s massive tax increases. Their main argument is that hiking taxes just as the U.S. is coming out of a devastating pandemic will damage the economic recovery.
The group believes it can make a difference in several key Senate races in 2022, including Arizona, where freshman Senator Mark Kelly looks extremely beatable.
But the group is going against the grain of politics. Tax increases on large corporations and the wealthy are particularly popular with voters. What the voters need to be informed of is that those tax increases will impact a lot of small and medium-sized businesses despite what Biden says about “taxing the rich.”
The coalition aims to turn the narrative away from a debate about taxing the rich and the biggest corporations to pay for roads and bridges. The organizers themselves acknowledge that that rhetorical battleground leans strongly in Democrats’ favor in public opinion polls.
But the organizers say President Joe Biden’s so-far popular infrastructure plan loses support when the focus shifts toward the high level of public spending it will demand, and the taxes on so-called job creators it proposes.
“The record tax hikes that Democrats are seeking to ram through could not come at a worse time for America’s job creators who are just beginning to recover from a crippling pandemic,” said Eric Hoplin, president and CEO of the National Association of Wholesaler-Distributors. Hoplin’s group is leading the new coalition.
“Employers support a smart infrastructure to ensure America’s 21st-century competitiveness, but it shouldn’t be used as a Trojan horse to enact record-high taxes on America’s individually- and family-owned businesses,” Hoplin said.
Some of Biden’s proposed tax increases would make it virtually impossible to pass on a business to a son or daughter following the death of the owner. Biden is proposing taxes as high as 61 percent on wealth.
First, the American Families Plan would tax unrealized capital gains at death for unrealized capital gains worth over $1 million. Currently, long-term capital gains of high earners are subject to a 20 percent tax rate and the 3.8 percent net investment income tax (NIIT) when the gains are realized (sold).
Second, Biden also wants to tax the capital gains of millionaires at ordinary income tax rates, which would be levied at his proposed top marginal rate of 39.6 percent. Added to the NIIT, it would mean a combined top tax rate on capital gains of 43.4 percent, compared to 23.8 percent today.
In addition to taxing unrealized capital gains at death at ordinary income tax rates, large estates would also be subject to the current estate tax of 40 percent above an exemption of $11.7 million per person.
Even a business that generates modest income may be worth millions of dollars. Biden’s proposals would destroy a lifetime of work in the name of “paying their fair share.”
Biden and the radical Democrats don’t understand business, they don’t understand wealth, and their ignorance will stifle job creation.