There have been many worries about Biden’s presidency.
Now those fears are coming true.
Now, Joe Biden’s new tax plan is destined to doom America.
In light of his controversial COVID-19 stimulus bill, President Biden has announced a new tax plan that will introduce the “first major federal tax hike” in three decades.
This news has many politicians, economists, and ordinary people concerned for our future.
While the words “federal tax hike” sound horrifying, it is important to truly understand exactly what President Biden is planning on doing in order to be adequately prepared for the backlash.
According to Bloomberg News, here are some of the new tax policies Biden plans on pushing for:
- Raising the corporate tax rate to 28% from 21%
- Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships
- Raising the income tax rate on individuals earning more than $400,000
- Expanding the estate tax’s reach
- A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)
“Unlike the $1.9 trillion Covid-19 stimulus act, the next initiative, which is expected to be even bigger, won’t rely just on government debt as a funding source. While it’s been increasingly clear that tax hikes will be a component — Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates — key advisers are now making preparations for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high earners.”
Sarah Bianchi, head of U.S. public policy at Evercore ISI and a former economic aide to Biden, told Bloomberg News:
“His whole outlook has always been that Americans believe tax policy needs to be fair, and he has viewed all of his policy options through that lens. That is why the focus is on addressing the unequal treatment between work and wealth.”
In response to this, economist Lawrence Summers addressed his concerns about these new tax initiatives:
“Given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply. Stimulus measures of the magnitude contemplated are steps into the unknown. For credibility, they need to be accompanied by clear statements that the consequences will be monitored closely and, if necessary, there will be the capacity and will to adjust policy quickly.”
Summers illustrates the importance of making sure the new tax policies are flexible enough to prevent serious damage to the economy.
We can only hope the President understands the ramifications of his new policies.
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