President Joe Biden’s “tax the rich” budget proposal would undoubtedly drive wealth out of the United States as his “unsound fiscal policy” calls for the highest top tax rate in the developed world to average at 57.4 percent of personal income.
After Biden released his $5.8 trillion budget last week, the nonpartisan Tax Foundation dug into the figures and found no evidence to support Biden’s claims that his budget would benefit the nation. While they contend that Biden’s message on the need for “stronger economic growth” is sensible, his words do not match the legislative facts.
“Critically,” Biden claimed, “my budget would also keep our nation on a sound fiscal course. It fights inflation and helps families deal with rising costs by growing our economy, making more goods in America, and lowering the cost families face. Its bold ideas are fully paid for, with tax reforms that more than offset the cost of new investments.”
From @EconoWill & @alex_durante_: President Biden’s budget came out this week with a very sensible message about the need for stronger growth and sound fiscal policy, but the actual policies it lays out would reduce growth and create unsound fiscal policy. https://t.co/ehwyANAErj pic.twitter.com/tROqTm12YQ
— Erica York (@ericadyork) March 31, 2022
Aside from the fact that the budget is built on the premise that the Build Back Better Act will be passed, a proposal that has remained dead on arrival since Sen. Joe Manchin (D-WV) has refused to support it, there is no version of this plan that is deficit-neutral as the Congressional Budget Office has also indicated.
Worse than that, under current law the United States is already marginally above the 38-member Organization for Economic Co-operation and Developments (OECD) average top combined tax rate at 42.9 percent over 42.6 percent.
Biden’s plan would bring that rate to the highest among OECD members at 57.4 percent while also raising the corporate tax rate from 21 percent to 28 percent.
— Conservative News (@BIZPACReview) March 30, 2022
These altruistic goals of top earners who already contribute over 70 percent of federal income taxes still not “paying their fair share” is expected to shrink the economy and eliminate tens of thousands of jobs as Americans are already struggling with inflation.
In addition to the absurd 20 percent tax on unrealized gains, Fox Business reported that these figures don’t yet include the 2026 scheduled increase for the top marginal tax rate on regular income to go from 37 percent to 39.6 percent after the 2017 Republican tax law expires.
As previously stated, Manchin does not support the Build Back Better agenda as laid forth and Sen. Kyrsten Sinema (D-AZ) has said she opposes any corporate tax increases. Should a compromise be found, the United States will surpass the tied Japan and Denmark with highest top income tax set at 55.9 percent.
Third to fifth place are comprised of France, Austria and Greece at 55.4, 55, and 54 percent respectively.
The Tax Foundation concluded, “preliminary review of the FY 2023 budget indicates there is little reason to think it will boost economic growth or result in sound fiscal policy. At a time when the Federal Reserve is raising interest rates to combat the highest inflation this country has seen in 40 years, which will slow the economy by raising borrowing costs, we should expect a more serious budgetary effort that recognizes the very real economic challenges that lie ahead.”
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