President Joe Biden insisted again and again he would only hike taxes on individuals earning over $400,000. He never meant it. He’s just hoping the middle class and the news media won’t notice the tax hikes if he hides them well enough.
Biden always had tax-hike plans for the middle class, just certain middle-class families. During the campaign, Biden supported a $200 registration tax on new firearms and a drastic overhaul of retirement accounts that would amount to a tax hike on folks earning over $80,250.
Biden could wiggle out of those, saying, “It depends on what the meaning of ‘tax hike’ is.” But he keeps adding new middle-class tax hikes to his agenda in order to pay for his boatloads of free money and a massive expansion of the federal government. Still, Biden is trying to hide them.
Hiking the corporate tax rate is a perfect example. Congress and President Donald Trump, with the Tax Cuts and Jobs Act, brought our corporate tax rate down to the globally competitive 21%, on par with the average of wealthy nations. Biden wants to increase it back to 28% and tack on a minimum 15% tax on the book income of large corporations, effectively disallowing many deductions.
Add in the state income taxes, and you’ll have most U.S. corporations facing the highest of any nation in the Organization for Economic Cooperation and Development and the G-7.
Of course, corporations don’t actually pay taxes. They collect taxes. Taxing a corporation is always taxing people, and those people are the customers, shareholders, and employees.
The Tax Foundation estimates that Biden’s corporate tax hike would slash 159,000 jobs and that an average 0.7% wage reduction would harm the bottom quintile of workers, who would see a 1.45% decrease in after-tax income. Prices would likely go up, and retirement accounts would be smaller than otherwise.
That’s a middle-class tax hike.
Then, there are the tax hikes Biden hasn’t admitted yet but that are implied by his spending plans. There simply isn’t enough wealth among the wealthy to finance their plans, and we know this from looking at the countries that already do what Biden and the Democrats want to do.
Biden wants to import Europe’s social safety net, and this will require him importing European-style taxation, which means taxing the middle class and the working class.
On top of onerous tax rates on income, most EU nations also have value-added taxes, or VATs. A VAT is something like a sneaky sales tax. The tax gets hidden in higher prices for everything. Higher prices for consumer goods disproportionately harm the middle class and the working class. Why would you raise tax revenue that way?
Firstly, because the middle class is where the money is. There are many more middle-class families, in Europe and in the U.S., than wealthy families. If Biden wants to pay for his plans or if he wants to curb the inflationary impact of his pumping trillions into the economy, he’ll need to tap into the middle class.
Perhaps he could win in a debate over whether his middle-class tax hikes present and future are a fair trade-off for his spending. But Biden doesn’t want that debate. He can’t admit that he’s taxing anyone but the rich. So, he continues in the falsehood that he’s only taxing the over-$400,000 crowd.
We know that’s not true. He knows that’s not true. It’s time Biden admitted he’s raising taxes on the middle class.