The Biden Administration’s recently announced federal budget plan is an inane continuation of the feckless string of fiscal proposed actions from both parties. From the Right we have tax reduction with no fiscal constraint and from the Left we have tax increases with no fiscal constraint. Tax reduction plans come with no real effort to reduce federal spending because the Right knows talk of reduced spending spells political suicide. Tax increase plans from the Left (a prime example is represented in the commentary piece included with this post) represent supposed incremental tax offsets to endless spending increases proposed and enacted by the Left that vastly exceed the new revenues and further ballooning the deficit.
When will taxpayers demand fiscally responsible behavior by the President(s) and Congress? The answer is never as long as most taxpayers, and non-taxpaying citizens/residents, continue to enjoy the bounty of out-of-control federal spending with absolutely no reduced services or pocketbook pain.
The top 1%, that Biden proposes we raid again, cannot rally enough political clout to either sway who is elected to Congress or the Presidency or to enlighten taxpayers to the catastrophic outcome for our country when tax burden and debt burden crush the economy’s ability to produce job creation and wealth creation. Where then, when the entirety of the top 1%’s wealth has been totally confiscated, will the Left turn to fund their woke agenda?
The Heritage Foundation’s Preston Brashers’ piece below both expertly and concisely explains.
Commentary: Biden’s budget calls for more plundering of the American taxpayer
PRESTON BRASHERS Mar 17, 2023
Farmers know a thing or two about stewardship. If they don’t take care of their land, eventually it will cost them their livelihoods. Unlike farmers, who work to steadily build a better future, Vikings would plunder villages, taking all they could carry away before moving on to their next target.
President Joe Biden’s budgets take the latter approach, going after more and more of the American people’s hard-earned treasure every year.
Last year, his budget sought an additional $2.5 trillion in taxes beyond the $55.8 trillion in revenue that was forecast to be collected over 10 years. His latest budget is even more rapacious. The president is calling for $65.2 trillion in taxes and other revenues – nearly $7 trillion more than his last mega-budget.
Yet even with all the extra spoils, Biden’s budget would somehow manage to spend $17 trillion more than it would collect. This would shackle the American people with an additional $120,000 in federal debt per household by the end of the decade.
While the left portrays America’s billionaires as a bottomless well of tax revenues, the government could confiscate every penny of wealth from all the billionaires on the Forbes 400 list, seizing their companies’ assets and bankrupting them overnight, and that would barely cover half of Biden’s newest round of proposed increase in taxes. It wouldn’t even cover 5% of Biden’s total 10-year budget.
Clearly, all of Biden’s tax hikes can’t be limited to the very rich. Inevitably, they will reach the doorstep of every working American.
The Biden budget document repeatedly boasts it is “fiscally responsible.” The truth is, it is unsustainable, and it would doom the middle class to massive future tax increases.
Biden’s budget would allow across-the-board tax hikes by permitting most of the Trump individual tax cuts to expire. However, the biggest taxpayer raids would directly target upper- and upper-middle-income taxpayers. The collateral damage would be devastating and widespread, reducing investment, stifling entrepreneurship and leaving fewer good jobs for all Americans.
Biden’s proposed tax hikes on the upper middle class are a foreboding sign for the middle class. In the days of the Vikings, if a richer nearby town was hit with repeated raids, surrounding villages had even more reason to fear they could be the next target.
Biden’s raid on taxpayers would hit in several waves.
Under Biden’s plan, federal taxes on wages for upper- and upper-middle-income Americans would rise from 37% to 44.6%. If they invested some of their after-tax wages in stocks, they would face a 28% tax on any profits at the corporate level (up from 21%) and up to 44.6% tax at the investor level (up from 23.8%).
President Joe Biden attends a press conference after a trilateral meeting with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak during the AUKUS summit in San Diego on Monday.
And that’s just the federal income taxes. Factoring in inflation and multiple layers of state and local taxes, many investors would be left with none or almost none of their investment gains after the government ransacking. It’s insulting that Biden refers to this as their “fair share.”
Small businesses – and those who rely on them – wouldn’t escape the wrath of Biden’s new taxes. Currently, small business active income is exempt from the net investment income tax, a surtax applied to investment income. Biden’s plan would extend this tax to directly hit most small business income and would raise the surtax from 3.8% to 5%.
Even death may not protect businessowners from Biden’s new taxes. The president’s proposal would nearly triple the number of taxpayers subject to the 40% death tax in 2026. If the deceased owned a business, the tax would apply to any increase in the value of a business since it was started or acquired. These changes would punish families for experiencing tragedy and force more owners of family businesses and farms to liquidate their assets to pay the steep taxes.
When businesses and farms are ruined, it’s not just the owners who suffer. Store clerks, janitors and laborers will struggle to put food on the table when their employers are forced out of business.
For too long the president and Congress have treated taxpayers as though they should be allowed to keep only what the government decides, as though taxpayers serve at the pleasure of the government. This is precisely backward.
The government exists – at the consent of the governed – to defend us against threats to life, liberty and property, not to take our liberty and property in a less violent way.
©2023 Tribune Content Agency, LLC.
Preston Brashers is a senior policy analyst in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget who focuses on tax policy. His research centers on tax and fiscal reforms to promote economic growth, simplify taxes, and reduce the role of the federal government in Americans’ everyday lives.