Opinion: Are You Afraid of Biden's Tax Plan? You Should Be
WHY YOU SHOULD CARE
Because everyone stands to pay even more.
If you earn less than $400,000, President Joe Biden plans to raise your taxes.
Biden and Kamala Harris publicly pledged at least 56 times that “no one” who earns less than $400,000 a year would see “a single penny” of tax increases or any “new” taxes.
And Bill Clinton promised to never raise taxes on the middle class, on the bottom 98 percent of incomes.
Less than a month into his first term, Clinton announced he would break his pledge in a Feb. 16, 1993, Oval Office address.
So, the “I will only raise taxes on the few” is a well-developed strategy to convince most voters they are safe from higher taxes and should vote on other issues.
Biden is unique in simultaneously promising to never raise taxes on anyone who earns less than $400,000 in a year while also promising to impose taxes that would do just that. Repeatedly, Biden has said he would “eliminate” the entire Trump tax cut. His audience applauds, having been told over the years that that tax cut was only for “the rich and big corporations.”
But the median income ($73,000) family of four would face a $2,000 tax hike per year if the Republican tax cut was repealed. The median income single parent with one child would face a $1,300 annual tax hike.
Biden emphatically told CNN he would reimpose the Obamacare tax penalty, the tax on those who decline to purchase Obamacare. It hit 5 million American households per year, three-quarters of whom earned less than $50,000. The tax was between $695 and $2,085. Republicans took it to zero in the 2017 tax cut.
Biden, Harris and many members of the Cabinet have called for a tax on energy, or “carbon.” This is a gas tax on steroids, raising the cost of everything in your life including the cost of driving your car, and heating and cooling your home.
Biden wants to impose the highest capital gains tax rate since Jimmy Carter in 1977. Biden has called for doubling the capital gains tax from 20 percent to 40 percent. Remember to add on the 3.8 percent capital gains surtax imposed as part of Obamacare. Then add state capital gains taxes: Californians will face a combined rate of 56.7 percent. Twenty-five million Americans filed a capital gains tax form in 2018.
Biden will also impose an additional death tax and a severe financial and paperwork burden on households and small businesses by eliminating “step up in basis” for capital gains. When a loved one dies, this will automatically force the recipient of any asset to pay an immediate capital gains tax based on the original acquisition cost from decades prior. Later, if you sell the asset, you’ll pay capital gains taxes again. There’s a reason Biden is fattening up the IRS and hiring legions of auditors and agents.
Biden said in the campaign that he would return the corporate income tax from 21 percent to the Obama/Biden level of 35 percent, the highest in the world. His aides now say he might raise it to 28 percent, still higher than China, Canada or most European nations. Higher than all other nations when you add the average state corporate income tax of 4.8 percent for a total U.S. corporate rate of 32.8 percent to the low end of Biden’s expected corporate income tax hike.
The corporate income tax on public utilities is directly passed onto consumers. Americans will see their utility bills go up as a direct result of Biden’s corporate income tax increase. They saw them drop by billions due to the Republican tax cut in 2017.
Studies show that roughly 70 percent of any corporate income tax rate increase is passed onto workers in lower wages. When the GOP cut the corporate rate, we saw this in reverse with the median family income increasing by $4,440 in 2019 alone — a 6.8 percent increase, higher than Obama achieved in eight years.
Why? More after-tax income allows investment in making employees more productive, more valuable and higher-paid. That will now flow backward. Biden hopes you believe that corporations pay the corporate income tax.
And the percentage of the corporate tax that is paid by investors whacks a great number of Americans who will never earn $400,000 in a year. Biden grew up in a period in the 1960s where only 10 percent of Americans owned stock directly. But today thanks to Individual Retirement Accounts and 401(k)s, fully 53 percent of American households have their life savings in a 401(k) or IRA. That is 100 million households. Their life savings are the target of the corporate income tax.
And Biden has demanded an annual gun tax of $200 on Americans who own a rifle for any rifle NOT given up to the federal government in a “voluntary” buyback program. How many Americans paying this tax earn more than $400,000 a year?
And Biden’s cabinet members and leading Democrat congressional leaders are also urging a Value Added Tax (Senator Manchin), a financial transactions tax (AOC), a wealth tax (Senator Warren) — enacted by 14 European nations and repealed by 11 — and an exit tax for leaving the country, pioneered by the Weimar Republic in the 1930s. (Senator Warren again.)
There is not an American who will not see their taxes increase — income, energy, gas, cap gains, guns, IRA/401(k) and Obamacare penalty tax — when the Biden tax bill is enacted.
Grover Norquist is president of Americans for Tax Reform.
- Grover Norquist, OZY Author Contact Grover Norquist