Biden’s “Build Back Better” New Taxes A Potential Attack Against Consumers

WASHINGTON (October 25, 2021) — “If corporate tax rates are increased on the federal level, the nation risks pushing corporations to relocate overseas,  potentially causing economic damage and lower wages,” wrote Forbes last spring.

Pivotal Democratic Senator Joe Machine (D-WVA) is not fully  on board with the White House proposals for new taxes on billionaires and certain corporations  to help pay for President Joe Biden’s scaled-back social services and climate change package.

Biden said Monday he felt “very positive” about reaching agreement on his big domestic policy bill, aiming for votes in Congress as soon as this week — though that is far from certain.

“That’s my hope,” the president said before leaving his home state of Delaware for a trip to New Jersey to highlight the child care proposals in the package and his infrastructure measure.

Democrats are working intensely to try again to wrap up talks, scaling back what had been what had been a sweeping $3.5 trillion plan so the president can spotlight his administration’s achievements to world leaders at two overseas summits on the economy and climate change that get underway later this week.

Biden huddled with the conservative West Virginia Democrat Manchin and Senate Majority Leader Chuck Schumer at the president’s Delaware home on Sunday as they work on resolving the disputes between centrists and progressives that have stalled the Democrats’ wide-ranging bill. A person who insisted on anonymity to discuss Manchin’s position told The Associated Press the senator is agreeable to the White House’s new approach on the tax proposals.

It’s now being eyed as at least a $1.75 trillion package. That’s within a range that could still climb considerably higher, according to a second person who insisted on anonymity to discuss the private talks.

House Speaker Nancy Pelosi said that even at “half” the original $3.5 trillion proposed, Biden’s signature domestic initiative would be larger than any other legislative package with big investments in health care, child care and strategies to tackle climate change.

“It is less than what was projected to begin with, but it’s still bigger than anything we have ever done in terms of addressing the needs of America’s working families,” Pelosi said Sunday on CNN’s “State of the Union.”

Biden met with Manchin and Schumer, D-N.Y., at the president’s home in Wilmington after Democrats missed last week’s deadline to resolve disputes. Biden has said he’d like to see a $2 trillion package and they are trying again this upcoming week to reach agreement.

Manchin and another Democrat, Sen. Kyrsten Sinema (D-Arizona), have almost on their own halted Biden’s proposal from advancing. With Republican opposition and an evenly split 50-50 Senate, Biden has no votes to spare, and the two Democratic senators have insisted on reducing the size of the enormous package and pressed for other changes.

One key debate has been over the revenues to pay for the package, after Sinema rejected an earlier plan to reverse the Republican-led 2017 tax cuts and raise rates on corporations earning more than $5 million a year and wealthy Americans earning more than $400,000, or $450,000 for couples.

Instead, the White House is considering a tax on the investment incomes of billionaires — fewer than 1,000 of the wealthiest Americans with at least $1 billion in assets. It also has floated a 15% corporate minimum tax that is designed to ensure all companies pay what Biden calls their “fair share” — ending the practice of some big-name firms paying no taxes.

It’s unclear what level of the new taxes Manchin would support, but he generally backs the White House proposals, according to the person who insisted on anonymity to discuss Manchin’s position. Neither person insisting on anonymity was authorized to discuss the negotiations by name.

The White House said the breakfast meeting was a “productive discussion” about the president’s agenda. The talks appeared to last for hours, but no decisions were announced. The Democrats “continued to make progress,” the White House said in its post-meeting statement.

Democrats initially planned that Biden’s package would contain $3.5 trillion worth of spending and tax initiatives over 10 years. But demands by moderates led by Manchin and Sinema to contain costs mean its final price tag could well be less than $2 trillion.

Disputes remain over far-reaching investments, including plans to expand Medicare coverage with dental, vision and hearing aid benefits for seniors; child care assistance; and free pre-kindergarten.

Pelosi, D-Calif., said on CNN that Democrats were still working to keep in provisions for four weeks of paid family leave but acknowledged that other proposals such as expanding Medicare to include dental coverage could prove harder to save because of cost.

Biden’s Billionaires New Taxes Hurts The Consumer

According to the Tax Foundation, based on adjusted gross income, the top 1% of taxpayers account for almost 21% of the nation’s income. This means that the 40% share of total income taxes that they pay is almost twice their share of income. When you break down relevant tax data from recent years as it pertains to various tax brackets, it puts into perspective what the 1% tax bracket really looks like, and those numbers are more significant than most realize.

What those in favor of increasing that tax burden often fail to observe is the consequences that such increases historically have on people in all income brackets. Traditionally, left-leaning politicians campaign on messages like “tax the rich” to “decrease the burden on the middle class.” President Biden echoed such messages throughout his campaign, and it appears he is trying to make good on those promises. However, one potentially problematic plan (for all income brackets) is the current corporate tax proposal.

Senate Democrats are seeking a 25% corporate tax rate compared to the current rate of 21%, while President Biden wants to increase it to 28%. Many agree it is problematic when massive corporations use loopholes to get away with paying meager corporate taxes, but on the flip side, increasing corporate tax or taking measures that make the U.S. a less ideal corporate climate has historically led to economic disadvantages down the road. Already, corporations have been relocating to more business-friendly tax climates in states such as Florida and Nevada, wrote Forbes.

 

Source: AP News and Forbes wrote the original article.

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