In his Address to Congress last week, Biden announced two new spending packages with multi-trillion-dollar price tags. The first is the American Families Plan, a $1.8 trillion spending bill primarily aimed at increasing “access” to education (while doing nothing to ensure the quality of said education). The second is an estimated $2.7 trillion package that’s being sold as an “infrastructure” bill, despite allocating less than half of the money towards infrastructure. Combined with the recently passed $1.9 trillion American Rescue Plan, Biden will have spent or introduced legislation to spend more than $6 trillion within his first 100 days. This is in addition to standard federal spending. But, fear not! Joe Biden has a plan!
Biden has proposed doubling the Capital Gains Tax to over 40% to foot the bill for this leftist spending bender. He’s also announced several other tax hikes that he assures us will only affect the top 1% of income earners. It’s a simple claim that Democrats have pedaled for decades. Massive spending programs will be paid for by people who have so much money that they won’t even notice Uncle Sam taking his cut. Yet, we’ve seen time and time again that these tax policies disproportionately hurt successful small business people and working Americans while the uber-rich skip out on the bill. That’s precisely what’s going to happen, should Biden have his way.
The Wharton School of the University of Pennsylvania, one of the nation’s premier business schools, has already projected that the “super-wealthy” whom Biden alleges will pay for his spending sprees will actually avoid paying 90% of it. So, if the super-wealthy elites aren’t footing the bill, who is?
The new generation of retail investors are perilously vulnerable to the many pitfalls of the I.R.S. and our horribly complex tax code. That’s because they don’t have the fancy tax lawyers, accountants, or lobbyists that the swamp dwellers regularly employ.
If Biden’s plans are approved, high priced tax experts will navigate with ease the festering wetlands of W-2’s, 1099’s, and deductions so that their wealthy clients pay next to nothing while the entrepreneur, innovator, and small businessman or businesswoman will get devoured by the Democratic party’s onslaught of new taxes. This is one of the many ways Main Street continues to be shaken down by the unholy union of Wall Street and Capitol Hill. So what’s the solution?
Progressives love to vilify conservatives as tax-cheating, corporate sycophants, but the accusation is false. The more complicated the tax code, the easier it is for the wealthy to avoid taxes and for everyday Americans to be hustled. That’s why, for years, conservatives have fought for the tax code to be simplified. Already, the average American takes 12 hours to file his or her taxes. Under the Trump Administration, Treasury Secretary Steven Mnuchin went so far as to introduce new tax forms that were simplified to the point of fitting on a postcard. At every turn, Democratic legislators opposed this and, by extension, opposed simplifying the tax code. As a result, if Biden has his way, we will be stuck with a new tax law that barely taxes the people it purports to target while aggressively taxing the people it claims to protect.
But taxes are not just a fiscal issue; they’re a moral issue. When Ronald Reagan brought down the highest tax rates from 70% to 37%, ending years of stagflation and dramatically growing the economy, it was about more than just a tax code. To Reagan, lowering taxes was about resetting the relationship between the individual and the government. The people did not exist to serve the government; the government existed to serve the people.
That approach created the economic revolutions of the Reagan and Trump eras. But, under Biden’s new plan, it would once again become the operating assumption in Washington, DC that the government takes whatever it wants while the people get to keep only what Joe Biden will allow. Most galling, the super-wealthy that Democrats continue to demonize will easily escape the worst of these tax hikes. The voters need to remind Joe Biden and the Democratic party that it is the natural right of every American to keep the fruits of his or her labor. At the same time, the government bears the burden of justifying why it needs a slice, not vice-versa.
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