Even the least discerning among us did not need 100 days of the Harris/Biden administration to know that Joe Biden is executing the statists' long term plan to make people totally dependent on government - both financially through taxes & physically through yet another expansion of Medicaid & ObamaCare that is leading to universal healthcare.
On April 28, during Biden's address to the joint session of Congress on the eve of his 100th day in office he outlined the American Families Plan - a plan costing $1.8 trillion that includes upto $4,000 per month federal government paid family & medical leave, free universal preschool, & two years of free community college. These benefits become part of permanent universal new middle class entitlements, as opposed to being part of a temporary social safety net only for people in need, that are not linked to any work requirement such as other permanent middle class entitlement programs like Social Security & Medicare.
The families plan follows Biden's $1.9 trillion Covid-19's relief package that was passed into law in March entirely on borrowed money & his $2.3 trillion jobs plan introduced @ the end of March to upgrade the nation's infrastructure, fight climate change (i.e., the weather) & create jobs doing so.
The top income tax rate on wage & salary compensation under Biden's plan would be increased to 39.6% from 37% & the top capital gains tax rate would increase from 23.8% to 39.6% plus the 3.8% ObamaCare surcharge on investment income meaning the new top federal capital gains tax rate of 43.4% on financial asset income would be greater than the top rate on wage & salary income. Talk about a flip flop.
Not one of the world's ten largest economies taxes individual long term capital gains anywhere near ordinary income tax rates. Most pointedly, China, vying with America to become the world's leading economy - whether Biden realizes it or not - has a top capital gains tax rate of 20% for Chinese investors.
Biden proposes raising the corporate income tax rate from 21% to 28%. All told, if Biden has his way, the U.S. will have the highest overall federal tax burden on corporate income in the 37 nation OECD (Organization for Economic Cooperation & Development) @ 59.3% & if you add in the average state corporate income tax of 4.9% the combined federal & state tax burden on corporate income is 62.8%. You can derive these tax rates from the information contained above in this post.
Biden proposes increasing the IRS enforcement budget by $80 billion, supposing this will bring about the collection of more revenue. And, of course, Biden has the usual targets of increasing taxes on corporations & the wealthy. Naturally, if these steps don't raise enough money Biden figures the rest of us can chip in to make up the difference.
Biden's corporate tax rate increase masks the most basic of economic principles starting with corporations don't pay taxes - people do, whether they are consumers, employees, or shareholders. The general populace loves to bad mouth corporations (whose products they love) & from whom they receive a portion of their retirement income (pensions). Talk about not knowing what is going on.
But as insidious & deceptive as the corporate income tax is the capital gains tax plan designed by Biden is every bit as insidious & deceptive & even more destructive.
Biden's capital gains tax plan treats the death of an owner of stock or a family business as a sale if the assets bequeathed have gone up in value more than $1 million since the time they were bought. Heirs of such appreciated assets currently pay no capital gains tax until they decide to sell the assets because the appreciated value of the assets are stepped up in basis to the fair market valuation @ the time of the taxpayer's death - a part of the tax code since the Revenue Act of 1921. Biden compensates for eliminating the step up in basis by arbitrarily providing a $1 million exemption before the new higher 43.4% top rate is applied.
Biden needs to treat death as a taxable event since he knows many people would be incentivised by the new higher capital gains tax rate to hold assets longer than they otherwise would. In essence the new higher capital gains tax rate & taxation @ death work together in Biden's plan.
The higher 43.4% capital gains tax rate also applies to taxpayers with over $1 million of annual income, but these people would have discretion when they choose to sell their capital assets & bring about the tax meaning such people would sell their assets in years when they did not have a million dollars of income.
Already congressmen from Iowa are proposing exemptions to the proposed capital gains changes for family farms & if the rest of us want to keep eating we should support them.
Click here to hear Mike Huckabee provide a tutorial that addresses the fallacies of people thinking the government is giving them something for free & how taxes play into the equation - i.e., there is not enough money from people in the top income tax brackets to pay for all the programs so people in the middle class wind up paying for much, if not all, of the programs they think are free. In addition, government spends the money inefficiently & society would be better off if people kept their own earnings & spent the money as they saw fit.
Now unless something goes terribly wrong very soon the more immediate effect of Biden's $6 trillion spending plans will be to boost the economy thereby bringing America deeper into the tempting lure that socialism will work this time. Biden has promised that no one making less than $400,000 per year will have their taxes raised which by definition means that the 2% of households that make @ least $400,000 per year will pay for all the free stuff & benefits that the other 98% of Americans will enjoy.
Just look @ the graphic above to see that the top 1% of income earners already pay 40.4% of the total income taxes paid & the top 5% already pay 60.6% meaning that households making more than $400,000 per year, the top 2% of income earners, do not make enough money for them alone to foot the bill for Biden's entire additional $6 trillion spending spree.
But America is way down the road to socialism. In fact when Trump said @ the 2020 State of the Union address "America will never be a socialist country" - & Bernie Sanders just smiled in the audience - we had already been more than halfway socialist for decades.
The only way to snap out of this delusion is for people to understand that our prosperity, that has made America the envy of the world, is built on people contributing to society by working to create things of value that produce wealth.
Meanwhile, Republicans offer no solutions, but continue to whine, without presenting a scintilla of evidence, that the 2020 presidential election was stolen from them.
Your last point is most telling - that Republicans offer no solutions. This is true especially for championing free markets as proven road to wealth and prosperity. We need new leaders to replace current. Our new leaders must fully understand the dangers of Socialism and offer the citizenry a can-do vision of private entrepreneurship. The time for these new leaders must happen now or never!
ReplyDeleteThese new leaders must also explain that higher taxes result in slower economic growth. That decreases Treasury revenues and creates a non stop cycle of decreasing GDP and exploding Fed debt.