Americans WILL Pay More in Taxes Under Biden
Picking apart Joe's dubious denials that his tax plan won't cost Americans more.
Joe Biden has been selling the latest iteration of his tax plan by erroneously claiming it will only increase taxes on Americans earning $400,000 or more annually. Campaigning in Florida last week, Biden sounded like a used-car salesman, promising, “I’m not going to raise taxes on a single solitary American making less than $400,000 a year. You won’t pay a penny more. It’s a guarantee.”
And how does Biden plan to pay for his trillions of dollars in new government programs? Why, taxing the rich, of course. And by taxing, he means nearly bleeding them dry. According to a CNBC analysis, top-earning Americans living in high-tax states like California or New York would pay a combined state and federal tax rate of a whopping 62%.
Biden’s claim that he won’t raise taxes on lower- and middle-class Americans also fails the basic economics test. While Biden’s plan may not directly target those households for tax hikes, his tax increase on the wealthy and increasing the corporate tax rate would impact lower- and middle-income earners via lower wages and higher consumption costs. The Tax Foundation found that Biden’s plan would lead to a reduction in Americans’ income across the board, with the wealthiest 1% seeing a 6.5% reduction in after-tax income and the rest of wage earns seeing a 1.7% decline. That’s not a recipe for economic growth.
The American Enterprise Institute determined that “in 2021, Biden’s proposal would increase taxes, on average, for the top 5 percent of households and reduce taxes on households in the bottom 95 percent.” Yet by 2030, his plan “would increase taxes, on average, for households at every income level, but tax increases would primarily fall on the top 1 percent of income earners.” So, essentially, Biden can dubiously claim that he won’t raise taxes on 95% of Americans by putting off the tax hike until after he’s out of office. It’s a classic bait and switch, just like ObamaCare.
As National Review’s Kevin Williamson observes, “Most economists agree that at least some of the payroll taxes that are in theory paid by employers end up being paid by employees, whose wages are reduced in order to offset the expense of the tax. Inevitably, that kind of cost-shifting falls most heavily upon low-wage employees, who, by definition, have relatively little power in the market.”
But those tax increases are also passed along to consumers, the majority of whom are lower- and middle-income Americans who find themselves shelling out more of their hard-earned money for goods and services as prices increase in order to pay for the increased tax rates. The Washington Times notes that, according to a Hoover Institution report, “the Biden agenda would result in a 7% drop in real consumption per household and a $2.6 trillion drop in GDP, factoring in his plan to expand ObamaCare and aim for net-zero carbon emissions by 2050.”
Indeed, that’s the hidden taxation of regulatory growth. One of President Donald Trump’s most effective actions in stimulating the American economy has been slashing government red tape. Biden would reverse this cost-cutting practice with his plan to expand or add new government programs. “With all these spending programs come regulations to implement them,” observes American Action Forum President Douglas Holtz-Eakin. “Last time we saw Joe Biden in office, there was $100 billion in regulatory costs added every year for eight straight years. That’s nearly a trillion-dollar disguised tax increase that comes along with these spending programs.”
But sure, Scranton Joe cares about families around the kitchen table worried about making ends meet.