The Democrats' Tax-Hike Proposal Would Shatter Biden's $400K No-New-Taxes Pledge
By: Brad Polumbo (MSN)
Say it ain't so Joe.
S E E D E D C O N T E N T
As Congress debates the Democrats' multitrillion-dollar spending proposals and attendant tax hikes, President Biden is falling back on his old campaign talking points.
© Kevin Lamarque/Reuters President Joe Biden delivers remarks on the August jobs report at the White House in Washington, D.C., September 3, 2021.
"Our Build Back Better Agenda will cut taxes for the middle class, lower costs for working families, create more jobs, and sustain economic growth for years to come," the president tweeted Sunday. "And the most important part? No one making under $400,000 will pay a penny more in taxes." (Emphasis mine).
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He is renewing a familiar promise, having campaigned extensively on the fact that working and middle-class Americans would not see any tax increases under the Biden administration. Yet, if it's signed into law, the slate of tax increases recently unveiled by House Democrats would shatter the president's pledge in at least two major ways.
For one, the Democrats are proposing a tax increase on nicotine products, raising the cigarette tax and adding a new tax on e-cigarettes and other products. They claim these increases would raise $96 billion in revenue — meaning that smokers of all kinds will have to pay $96 billion more in taxes. This would fall largely on Americans who earn less than $400,000.
Indeed, today's smokers tend to be lower on the economic ladder. 2017 research from the University of Colorado found that "most remaining smokers have low income, no college education, no health insurance or a disability." These are the people who would immediately face higher taxes under the Democrats' proposal in direct violation of Biden's pledge.
Howard Gleckman of the left-leaning Tax Policy Center told the Washington Post that the proposed nicotine tax hikes "absolutely, no question" violate Biden's pledge. (Although Gleckman argues in favor of the increases on other grounds.)
Yet the nicotine tax hikes aren't the only part of the Democrats' proposal that would run afoul of Biden's promises if signed into law. House Democrats also want to raise the corporate tax rate from 21 percent to 26.5 percent — and Biden has previously endorsed similar increases. While an increase in taxes levied on corporations may not, on the surface, violate Biden's pledge, its practical impact most certainly would harm the voters the president promised to spare.
While economists quibble over the exact percentages, there's a near-unanimous consensus that a significant portion of the economic burden of corporate taxation is borne by workers via reduced wages and consumers via higher prices and lowered investment value.
As Tax Foundation senior policy analyst Garrett Watson explained to me, "The corporate tax increases would reduce after-tax incomes for households of all income levels through two ways. The value of corporate equities in retirement accounts or taxable investment accounts would be reduced after taxes increase, and workers would bear some portion of the tax through lower wages."
Even the most favorable analyses, such as one from the Tax Policy Center, a project by the left-leaning Urban Institute and Brookings Institution, find that "the bottom 80% of households pay more than one-quarter of corporate taxes." This means that whatever they pay to the IRS, millions of Americans earning far less than $400,000 will still suffer a de facto tax increase under the Democrats' proposed schemes.
Biden's pledge relies on technicalities over reality.
"It's generally been understood that the pledge only applies to direct tax hikes, but that is really a distinction without a difference when thinking about the impact of the taxi hikes on households' financial well-being," Watson added. "A reduction in after-tax incomes from a direct tax hike or from a lower wage due to the corporate tax has the same impact on the bottom line of families' budgets."
Indeed it does. Democrats may not want to admit it, but their tax-hike proposal would both directly and indirectly raise taxes on countless Americans well under Biden's $400,000 threshold. If the president nonetheless grants it his signature, he will officially have shattered his pledge beyond repair.
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Yes and his $5T crap will cost zero...........LMAO
Wait till people who don't get a plan to fix their power/gas rates see their bills this winter. Expect a 50-150% increase for Natural gas from last year unless Biden acts on it now.
That increase will be 100% on no drill, turn the spigot off Biden
Remember! ....A green new deal!
Lol .... which is just a new green joke ..... a progressive designed ClusterF waiting to happen
And it finally happened. The shit has hit the fan. Reality has struck.
The progressives are going to kill it all if Nancy brings the Infrastucture bill to a vote. It's ten past 1 PM. Where the hell is this vote?
I bet it's a lot of bluster by the AOCites.
My guess is enough Dems will vote for the trillion dollar plan so it passes.
Progressives are destroying this country and they know it.
We'll find out if Pelosi would finally bring this to a vote today.
Progressives are destroying this country and they know it.
That's what many of them were taught to do!
The democrats are on the defensive since they can’t agree among themselves. Sinema and Manchin should switch to the GOP.