CHICAGO, IL – NOVEMBER 01: Joe Biden spoke to the Chicago Council on Global Affairs on November 1, 2017 in Chicago, Illinois. (Photo by Scott Olson/Getty Images)
UPDATED 1:48 PM PT – Friday, April 23, 2021
The Biden administration is continuing to wage war on American prosperity, and is considering yet another costly legislative package funded by tax increases.
On Thursday, the White House revealed it is preparing to announce a proposal that would nearly double the capital gains tax rate in order to pay for his soon to be unveiled American Families Plan.
This new legislative package, the latest in a growing list of massive spending proposals advanced by the Biden administration, is projected to cost upwards of $1.5 trillion. It would go towards socialized childcare, universal pre-kindergarten education, 12 weeks of paid family leave and tuition-free community college.
White House press secretary Jen Psaki, in what is becoming a common Democrat tactic when pushing for an expansion of the welfare state, described these measures as “infrastructure” improvements, while confirming they would be paid for by tax hikes on the private sector.
White House press secretary Jen Psaki spoke during a press briefing at the White House, Friday, April 23, 2021, in Washington. (AP Photo/Evan Vucci)
“The president’s calculation is that there’s a need to modernize our infrastructure, there’s a need to invest in childcare, there’s a need to invest in early childhood education, and making our kids and the workers of the next generation more competitive,” Psaki stated. “He should propose a way to pay for it. His view is that that should be on the backs, that can be on the backs, of the wealthiest Americans who can afford it and corporations and businesses who can afford it.”
The messaging surrounding this is consistent with the general position of the Biden White House, which has, on repeated occasions, made the claim large-scale expansions in government spending and its accompanying rise in overall taxation will somehow not have a direct effect on the average American.
This has extended even to proposals economists widely agree will lead to economic slowdown, such as Biden’s purported infrastructure plan, which conservatives have dubbed “the Green New Deal in disguise.” This plan is projected to lead to job losses and industrial contraction in the energy sector, as well as higher energy costs for the average consumer.
“The message that we hope leaps out from today’s panels is that no one is being asked for a sacrifice,” Special Presidential Envoy for Climate John Kerry said. “This is an opportunity for better health, for great jobs. With extraordinary opportunities of the future, to grow our economies and to provide for much greater security for our nations.”
Special Presidential Envoy for Climate John Kerry listened as Joe Biden spoke to the virtual Leaders Summit on Climate, from the East Room of the White House, Thursday, April 22, 2021, in Washington. (AP Photo/Evan Vucci)
Yet economists pointed out the burden of higher tax rates on productive enterprises in the private sector are ultimately passed on to the consumer. Nonpartisan think tank the Tax Foundation pointed out the combined burden of Biden’s proposed increases in the rates of corporate and capital gains taxes would create a 47.5 percent tax burden on corporate income, the highest of any country in the OECD.
The organization also pointed out while this means high earners would end up paying up to 59 percent of their income when accounting for state and local taxes, the hikes would also affect lower earners. Wage earners bear at least 20 percent of the corporate income tax burden.
Moreover, it has been pointed out the tax cuts enacted by the Trump administration led to a significant increase in wages across the board, and Biden’s proposals threaten to do just the opposite, making Americans as a whole poorer.
“The median income in the United States went up by 6.8 percent,” Grover Norquist, president of the Americans for Tax Reform stated. “Not the average, if you line up everybody in the country, everybody got $4,004 more per year. It moved, tens of millions of people had higher incomes. If you undo that, they are going to take that away.”