House Democrats will consider nearly $3 trillion in tax hikes over the next decade in an attempt to pay for their $3.5 trillion budget that includes most of President Joe Biden’s domestic agenda and would overhaul the nation’s social safety net.
The hikes are predominantly focused on wealthy Americans and large corporations. Among the increases is a top income tax bracket of 39.6%, up from 37%, which Democrats say would raise $170 billion in revenue over the next decade.
A summary of the proposals leaked Sunday, and was first reported by The Washington Post.
A new Democratic proposal to increase the capital gains tax could cost 745,000 jobs, a study published by the Regional Economic Models Inc. (REMI) projects.
The Sensible Taxation and Equity Promotion (STEP) Act, which would tax unrealized capital gains when heirs inherit assets, among other things, would have a “significantly negative impact” on the economy, including average job losses of 745,000 over 10 years, the report found.
The analysis, conducted for the Committee to Unleash Prosperity, found that sustained annual job losses from eliminating a tax benefit on appreciated assets known as the step-up in basis could eliminate between 537,000 to 949,000 jobs, with models predicting a base of 745,000 lost jobs through 2030.
If there were trillions of dollars socked away in convenient vehicles to avoid taxes and benefit the ultra-elite should we not tax them? Are they not fair game in a just system of taxation, where the little guy and the middle class have to pay up—or else?
The largest endowments, mainly universities indoctrinating students in social justice, wokeism, and class warfare, pay absolutely no taxes.
The big foundations, promoting radical left-wing activism, likewise pay no taxes.
There will always be munis. Income from municipal bonds typically enjoys tax-free status at the federal level and in the issuing state. Conversely, when investors put wealth to work in a startup, private corporation, or public company, they face a capital gains tax penalty if their investment bears fruit. If a home run, that penalty becomes enormous.
Imagine that. Investors who subsidize the growth of government largely avoid taxation. But if they back an innovative corporation, or rush a distant future into the present through an intrepid investment with a visionary entrepreneur, a major IRS bill awaits.
Worse, the cost of prescient investing may soon increase. Seemingly in a bid to placate his ravenous left flank, President Biden has announced a proposal to nearly double the federal penalties on savings and investment to 43.8%.
Just over three months into his presidency, Joe Biden has been nothing if not active. Fresh off proposing two bills that could end up costing taxpayers $5 trillion over the next decade, the President is now proposing yet another $1.5 trillion spending package. This plan, intended to fund expanded childcare and education initiatives, would include huge tax hikes that would act as yet another sucker punch to a still-rebounding economy.
About the only tax increases the President hasn’t supported thus far arewealth taxes and financial transaction taxes. But just because the tax hikes in this package are less exotic doesn’t mean they wouldn’t prove to be harmful.
In keeping with Biden’s ongoing efforts to undo the 2017 tax reform law, the first tax increase proposed is the restoration of the top tax bracket to 39.6 percent, the level it was at before the Tax Cuts and Jobs Act (TCJA) lowered the rate to 37 percent. The top individual rate isn’t the most influential piece of the tax code on economic growth — as the Tax Foundation estimated prior to the passage of the TCJA — but it’s also far from the only tax hike that Biden is proposing.
Understandably lost in the wake of Wednesday’s shocking events was the fact that, with two election wins in Georgia, Democrats took control of the Senate to go with control over the House and presidency. Though tax policy may have taken a backseat in these Georgia elections, the results raised the chances of significant tax hikes, and the undoing of progress made in the 2017 Tax Cuts and Jobs Act (TCJA), substantially.