Op-ed views and opinions expressed are solely those of the author.
Joe Biden has stepped into his tax elevator and hit the button for the top floor. His economic agenda, and the taxes he plans to jack up to pay for it, “is a threat to sustaining what otherwise should be a buoyant recovery”, says the Wall Street Journal.
Now that Democrats control the Senate and House, let’s take a gander, a fresh look, at how Biden is about to skewer those citizens who have been productive and successful in life, to confiscate the earnings of those who actually make this country great. Under Biden:
- The top federal income tax rate for individuals would increase to 39.6% from 37%;
- The tax rate for businesses would jump to 28% from 21%, and a 15% AMT tax would apply to companies with higher incomes;
- Capital gains and dividends would be taxed at a total federal rate of 43.4% for higher-income earners, and the “Biden proposal also would lift the effective tax rate on dividends to 60% from 40%”, after paying the double taxation at the personal and corporate level, says the Wall Street Journal;
- Biden would abolish tax deductions for your contributions to IRAs and 401(k)s and replace it with some sort of new tax credit gimmick that hurts upper-income families;
- The estate tax exemption for individuals would decrease by about 50%, and the stepped-up cost basis upon death for inherited assets would be repealed–this restores to pre-Trump levels the lower threshold for taxable estates;
- Individuals earning higher incomes would pay additional payroll taxes, and a higher Social Security tax;
- Self-employed individuals would pay 12.4% Social Security tax on their net profits, and they must pay both the employee and employer portion of the tax;
- Biden’s plan increases the global intangible tax (GILTI) on foreign profits from 10.5% to 21%;
- He also wants a 10% surtax on businesses that send jobs and manufacturing overseas; overseas manufacturing means that the cost of goods that are sold back to Americans is reduced;
- The major tax reductions passed in 2017 would be repealed;
- The 20% deduction for qualified business income for wealthier taxpayers will be phased out;
- Itemized deductions for certain taxpayers are to be capped;
- Student loan debt will be forgiven, reducing revenues to the government, which will cause taxes to rise to make up the difference;
- Biden would create a new financial fee for certain liabilities of major financial institutions, and eliminate certain tax breaks for fossil fuel production;
- His plan calls for another round of $1,400 checks to eligible persons, again causing taxes to rise to pay the tab;
- A new tax penalty will be placed on pharmaceutical companies that increase drug costs, with no thought to what it costs the companies to pay the R&D to develop the drugs—also the deduction for prescription drug advertising would be eliminated.
In addition, Biden is considering a repeal of the cap on state and local tax deductions, and repealing incentives for job creation in the U.S. He might also clamp down on the rules for stock repurchases and buybacks.
New York residents will especially be hit hard, as NY Gov. Cuomo is proposing to raise the top NY State income tax rate by 23%; along with other tax hits and Biden proposals, some NY residents might be paying a top marginal tax rate of nearly 70%.
A reminder: it’s possible that some of these changes outlined above might not become law, as Congress must deliberate. But the liberal left and their captured Congress is going to need scads more tax revenue to pay for their expanded, pervasive nanny state.
Biden’s plans might harm the wealthy more than the middle class, but even as wealth is being redistributed, nearly everyone will pay more. Some more than others. It appears that what the Washington, DC Swamp giveth in stimulus money might be taketh away in taxes.