President Joe Biden is planning the first major federal tax hike in nearly thirty years to help pay for his massive $1.9 trillion stimulus package, but if you think the reform only targets the corporations and the wealthy, you’re wrong.
“Yes, anybody making more than $400,000 will see a small to a significant tax increase,” Biden told “Good Morning America’s” George Stephanopoulos Wednesday. “If you make less than $400,000, you won’t see one single penny in additional federal tax.”
Hours later, White House press secretary Jen Psaki issued a correction, the $400,000 threshold actually applies to families, not individuals. Which has the potential to surge household income tax rates to 39.6%
While higher capital-gains tax rates for million-dollar annual earners might seem arbitrary to the general public, repealing portions of former President Trump’s 2017 tax law to increase corporate tax rates is going to hit home for most Americans.
The proposal to raise corporate taxes to 28% would give the country the highest combined federal and state tax rate of all developed nations, which could reduce corporation’s desire to invest in the United States and harm the county’s competitiveness in the global market.
The plan’s reported “paring back tax preferences” on “pass-through businesses” will be a major attack on small-businesses, as an estimated 75% in the nation are “unincorporated pass-through entities.”
Fox Business anchor Larry Kudlow remarked that Biden doesn’t want to admit that the tax hikes will be “a killer” to small businesses and corporations. “Small businesses will get slammed, corporations will have to cut back on wages and jobs and investments and you repeal the Trump tax cuts, you’re going to repeal all those middle-income benefits.”
Which according to a tax analysis, would drive down U.S. gross domestic production by 0.8%, reduce worker wages by 0.7%, and eliminate 159,000 jobs in the country.
Though tax hikes are still looming, Americans are already beginning to feel the effects of Biden’s policies on their wallets. Nationwide gas prices have soared in the past few weeks, spiking the national average to $2.88 a gallon, a 64 cent jump from this time last year.
Florida Republican Senator Rick Scott blames Biden for the recent uptick. The president’s energy policies, which include suspending oil permits on federal lands and cancelling the Keystone XL oil pipeline, Scott says will lead to “unbelievable increase in costs for poor families,” as gas prices rise and utilities are expected to soar.
“It’s like they’re trying to hurt all Americans,” Scott remarked. Kudlow agrees that Biden’s policies will be harmful to the people. “If you want to grow the local economy you should be cutting taxes, not raising them.”