Get ready, America. If your business survived the COVID-19 outbreak, you might find yourself now staring down the barrel of President Joe Biden’s tax hike.
According to Bloomberg, the guy the media hailed as a “moderate” is planning to drop the first major tax hike America has seen in 30 years so that he can pay for upcoming long-term pandemic relief bill:
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.
Who will likely be the ones burdened with these taxes? It’s all the usual suspects:
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)
In other words, Americans making over a certain amount (usually business owners) are going to be forced to pay more money to the government so that the government can give that money to people who would be better off just having a job, while Democrats pat their own backs giving other chunks of these funds to their pet projects.
It’s taxing Americans that managed to navigate their way through the pandemic with their businesses mostly intact, only to realize that the light at the end of the tunnel was Biden’s tax-happy freight train. Anyone looking to get a job will now likely have to wait longer since the extra taxes means less money to hire and expand with.
The Democrats shouldn’t get their hopes up, as the GOP is already signaling they’re ready to ruin the Democrat’s plans, and Democrats need at least 10 Republicans to sign off on the tax hike.
“There seems to a be a real drive to tax investment of capital gains at marginal income rates,” and called that a “terrible economic mistake,” said Kevin Brady, the top Republican on the House Ways and Means Committee.
Senate Minority Leader Mitch McConnell also said that they will be having a “robust discussion about the appropriateness of a big tax increase.”
It’s not just Republicans either. West Virginia Senator Joe Manchin may be an obstacle as, according to The Hill, he’s already called the repealing of Trump’s tax cuts “ridiculous.” He has, however, signaled that everything is open to discussion.
The Democrats will have to fight very hard to convince some Republicans that a tax hike of this magnitude is a good idea, but it’s not likely that Republican constituents will see it that way. It’s going to be an uphill battle for the Democrats, and a must-win fight for the GOP.