Biden’s ‘Soak the Rich’ Tax Hikes in Trouble on the Hill
Biden’s ‘Soak the Rich’ Tax Hikes in Trouble on the Hill BY RICK MORAN for PJ Media
Despite having a majority in both houses of Congress, Joe Biden’s plan to raise taxes on the rich will still have a rough go of it in the nation’s legislature.
For some Democrats, any tax bill won’t go far enough in stripping the rich of their wealth. For others, it will go too far. And with a solid phalanx of Republicans adamantly opposed to any tax hikes — which they rightly point out would be suicidal in a pandemic with the economy tipping into recession — Biden’s path to success is narrow and strewn with rocks.
Biden’s campaign tax proposals included rolling back President Trump’s 2017 tax-cut law for taxpayers with income above $400,000, taxing capital gains at the same rates as ordinary income for people with income above $1 million and raising the corporate tax rate from 21 percent to 28 percent.
Democrats broadly think that wealthy people and corporations are not paying enough in taxes. A debate over how best to raise taxes on the rich was front and center during the Democratic presidential primary, with some Democratic candidates, such as Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), taking more aggressive positions than Biden and calling for a wealth tax.
The Tax Foundation analyzed Biden’s tax proposals and their effect on the economy. It’s not a pretty picture.
According to the Tax Foundation General Equilibrium Model, Biden’s tax plan would reduce the economy’s size by 1.62 percent in the long run. The plan would shrink the capital stock by about 3.75 percent and reduce the overall wage rate by a little over 1 percent, leading to about 542,000 fewer full-time equivalent jobs.
The corporate tax hike would be devastating. Once again, the United States will have the highest corporate tax rate in the developed world — higher than the socialist countries in Europe.