Conservative economists blasting Democrat front-runner Joe Biden’s tax hike proposals warn his ideas would “crush” the record-setting U.S. economic recovery.
An analysis by the Tax Policy Center last week indicated Biden’s proposals to hike corporate taxes, increase the capital gains taxes on the top 1%, and toss out the Trump tax cuts would collect $4 trillion over the next decade.
“Biden is a fake moderate,” economist Stephen Moore tells Newsmax. “His voting record in Congress was always one of the most liberal, and one year he had an American Conservative Union rating of zero.”
Among the Biden tax proposals that have alarmed conservatives:
- Biden wants to increase the corporate tax rate from 21% to 28%. This 33% increase would raise $1.3 trillion over a decade. One problem with this approach is companies tend to pass along this added cost by reducing employees’ wages, meaning lower income workers would take a hit. Trump’s tax reforms dropped the rate from the highest in the developed world, at 35%, to 21%.
- Higher corporate taxes incentivizes corporations to staff their cash overseas, instead of bringing it back to fuel the domestic economy as has been happening under President Donald Trump. Biden proposes a new tax to eliminate that incentive, to capture as much corporate tax as possible. Businesses would face an alternative minimum tax of 15% on their total worldwide revenues, minus a credit for taxes paid to other countries.
- He proposes hiking the top capital gains tax rate from the current 23.8% to 39.6%. Economists worry that would make investments less profitable, and could reduce the amount of capital available to fund new business endeavors.
- Biden wants to increase the top income tax bracket from 37% to 39.6%, but that top rate wouldn’t kick in on income over $510,000.
- He would restore the individual mandate in the Affordable Care Act, which the Supreme Court has ruled was a de facto tax. The tax is imposed if a citizens declines to obtain health insurance, as a way to strong-arm them into doing so.
Overall, the Tax Policy Analysis found that the top 1% would underwrite 74% of that $4 trillion over 10 years. But because businesses have to shift their burdens to shareholders and workers, those at the lower end of the economic spectrum would not be left unscathed.
Tax hawk Grover Norquist of Americans for Tax Reform (ATR) tells Newsmax that while Biden’s proposals may not be as radical as those of Sen. Bernie Sanders of Vermont, they’re still unprecedented.
“Joe Biden’s threat/promise to increase America’s tax bill by $4 trillion over a decade is four times higher than Hillary Clinton’s tax hike of ‘only’ $1 trillion way back in 2016,” he stated.
“And Hillary Clinton refused to consider the energy tax or carbon tax, because it was too radical. Biden adds the energy/gas tax onto all his other tax hikes.”
Biden aims to essentially redistribute the $4 trillion his tax hikes would collect. He proposes spending it on health care, an increase in the child tax credit, incentives to reduce carbon emissions, reducing the cost of higher education, and infrastructure investments.
Moore warned Biden’s plan to draw $4 trillion more out of the economy “would crush the market and cause as much as $1 trillion dollars of investment capital to leave the US and flee to foreign nations.”
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