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“House Democrats unveiled a sweeping proposal Monday for tax hikes on big corporations and the wealthy… The proposed top tax rate would revert to 39.6% on individuals earning more than $400,000, or $450,000 for couples, and there would be a 3% tax on wealthier Americans with adjusted income beyond $5 million a year. For big businesses, the proposal would lift the corporate tax rate from 21% to 26.5% on incomes beyond $5 million, slightly less than the 28% rate the president had sought.” AP News
The right opposes the proposed tax increases, arguing that many of them would eventually be passed on to the middle class.
“Combined state and federal corporate tax rates already put the average U.S. tax burden on businesses in the middle among OECD nations, at 25.75 percent. The House Democratic tax hike would raise that to more than 30 percent. That combined rate would give the United States the third-highest combined corporate rate in the OECD, behind only Portugal and Colombia…
“Californians earning more than $5 million would face a 58.25 percent marginal rate, while New York City residents earning more than $25 million would pay about 60 percent. Only Slovenia, Belgium and Finland levy higher or comparable rates…
“These tax hikes would also likely lead to tax increases for average Americans in coming years. The administration plans to use this money for new spending, not to help close the $1 trillion annual deficits that stretch as far as the eye can see. The Social Security and Medicare trust funds will also need shoring up in the next decade. If the rich and big business are already the most heavily taxed in the world, they probably can’t be taxed more to save our entitlements or reduce the deficit. That means the money will come from where the rest of the world already gets it: the pockets of average taxpayers.”
Henry Olsen, Washington Post
“Though the changes are all meant to target high-income taxpayers — who already pay a share of federal income tax that is far in excess of their share of income — according to the [Joint Committee on Taxation], less than half of the new taxes collected would come from high-income individuals. The rest would come mainly from businesses, which invariably pass those costs on to their employees, customers, and business partners as far as they are able…
“Democrats here are pulling their usual stunt of assuring lower-income people that higher taxes won’t fall on them, but only on their employers, their landlords, and their grocers, as though their finances were unconnected.”
The Editors, National Review
“The political myth behind all this is that no one making less than $400,000 a year will pay more. But the economic literature is clear that corporations don’t pay taxes. They are merely the collection vessels for levies that are passed along to some combination of employees, consumers and shareholders. Much of the $900 billion will be paid in smaller wage gains for workers who are already paying a Biden tax from higher inflation. And who do Democrats think will pay the $96 billion they expect to raise from higher taxes on tobacco and nicotine—the folks who summer on Martha’s Vineyard?”
Editorial Board, Wall Street Journal
“Polls rarely ask these people what a ‘fair share’ looks like. Is a quarter of someone’s earnings enough? A third? Because the rich have been shouldering an increasingly larger share of the cost of government… Despite perceptions, the highest-income strata of taxpayers are the only ones who pay a larger share of taxes than their share of income. In 2018, the top 1 percent of income earners made nearly 21 percent of all income but paid 40 percent of all federal income taxes. The top 10 percent earned 48 percent and paid 71 percent of all federal income taxes…
“On the other hand, in 2021, Americans making less than $75,000 are projected to have, on average, no tax liability after deductions and credits. The average income-tax rate for those making between $75,000 and $100,000 is expected to be 1.8 percent. More than 61 percent of Americans — around 107 million households — owed zero federal income taxes for the year 2020… the idea that the rich don’t pay their ‘fair share’ is absurd.”
David Harsanyi, National Review
The left generally supports the proposed tax increases and argues that additional tax reforms are necessary to fund needed spending.
The left generally supports the proposed tax increases and argues that additional tax reforms are necessary to fund needed spending.
“The country thrives when there’s a transparent and equitable social contract between capital and labor. Capital provides the money needed to start and grow companies, and labor provides the sweat and talent necessary to turn ideas into thriving businesses. If they succeed, capital and labor share the spoils in a way that allows both to prosper. In theory, everybody wins…
“Around the late 1970s, however, that social contract began to break down. While corporate America has enjoyed booming profit growth and soaring stock prices, inflation-adjusted wages for workers have barely budged. The disparity is now starker than ever: Companies are minting record profits while millions of full-time workers struggle to get by… The private sector has had decades to tackle this problem. It didn’t. Now it’s government’s turn.”
Nir Kaissar and Timothy L. O'Brien, Bloomberg
“The proposal, while substantial in scope, stopped well short of changes needed to dent the vast fortunes of tycoons like Jeff Bezos and Elon Musk, or to thoroughly close the most egregious loopholes exploited by high-flying captains of finance. It aimed to go after the merely rich more than the fabulously rich…
“Former President Barack Obama, Mr. Trump and Mr. Biden have all vowed to close the so-called carried interest loophole, in which private equity managers pay low capital gains taxes on the fees they charge clients, asserting that the money is not income because it is drawn from their clients’ investment gains. Senate Democrats have proposed closing the loophole completely, saving Treasury $63 billion over 10 years. The House proposal would merely limit the practice… Another item missing from the House plan: a measure to tax inheritances more aggressively.”
Jonathan Weisman and Jim Tankersley, New York Times
“Even if [Democrats] passed Mr. Neal’s proposal intact and held the line on loopholes, they would still struggle to pay for their bill without embracing accounting gimmicks. Mr. Neal’s plan would raise $2.9 trillion, but Democrats seek to spend $3.5 trillion — and experts say the real cost of the programs they desire would be far higher than that estimate. Democrats argue that the economic growth their bill spurs would fill the gap. This is wishful thinking…
“If anything, Democrats should be reexamining some obvious pay-fors that Mr. Neal failed to propose, such as closing the carried interest loophole, which allows hedge fund managers to avoid income taxes. A carbon tax would help fight climate change, and it would not impact most taxpayers if a chunk of its revenue were recycled back to the public.”
Editorial Board, Washington Post
“[In an online survey of over 3,000 Americans] individuals in the group informed that past cuts in the top federal income tax rate did not result in higher economic growth were the most likely to support higher taxes on the rich; this information increased support by more than eight percentage points, compared with the control group…
“When Republicans learned that 122 American billionaires who inherited their wealth are wealthier than the bottom 50 percent of the population, their support for raising the top federal income tax rate increased by 13 percentage points. Learning how that the top income tax rate had been cut in half raised support even more dramatically, by about 17 percentage points… Our study suggests that the administration might wish to build more bipartisan support by better informing the electorate about who’s rich and how much their taxes have already been cut.”
David Hope, Julian Limberg and Nina Weber, Washington Post
Westie tops 1st surf dog surf-a-thon at Del Mar since pandemic.
Times of San Diego
