Let the Battle Begin: Biden Set to Formally Propose More Than $2 Trillion in Tax Hikes

Jacquelyn Martin, Pool
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Joe Biden told lawmakers during his State of the Union address in February that his budget will lower the deficit and extend the solvency of the Medicare Trust Fund “by making the wealthy and big corporations begin to pay their fair share.” Lyin’ Biden added: “blah blah blah blah, blah blah blah blah blah blah.”


Think about it.

How many times over years have Democrats claimed that this monster spending bill or that monster spending bill would lower the deficit by making evil rich people and even more evil big corporations “pay their fair share”? I know; I can’t count that high, either. And how many times have those monster spending packages actually reduced the deficit? Fortunately, I can count that high: zero.

The “secret”? Democrats are awesome at raising taxes and increasing federal spending, and intentionally terrible at lowering taxes and cutting federal spending.

Let’s not forget that wealth redistribution has, for more than six decades, been the necessary cornerstone of Democrat fiscal policy. As Irish playwright (and socialist) George Benard Shaw correctly observed: A government that robs Peter to pay Paul can always depend on the support of Paul. And there it is.

Invariably, Democrat tax hikes cost all Americans more money, either via tax increases on lower-than-promised wage earners or by paying more for products and services. Moreover, that “fair share” nonsense? First, wealthy people already pay a disproportionate share of personal income taxes, and then there’s this: Who gets to decide “fair share” stuff? (The question is rhetorical.)

As The Hill reported, Biden is set to formally propose a multitude of tax increases on wealthy individuals and corporations in a budget plan that he claims will reduce the deficit by $2 trillion over the next decade (blah, blah, blah), setting up what promises to be a major battle with the Republican-majority House.


Here’s more, via The Hill:

The White House on Tuesday unveiled a proposal to raise the Medicare surtax on earned and unearned income above $400,000 from 3.8 percent to 5 percent.

Late last month, the president proposed a new tax on wealthy households that would require individuals and families worth more than $100 million to pay a 20 percent tax on income and the unrealized gains of liquid assets such as stocks.

The administration is also expected to propose a quadrupling of the stock buyback tax that was included in the Inflation Reduction Act that Democrats passed through the House and Senate on party-line votes last year. That legislation set a 1 percent surcharge on corporate stock buybacks.

Biden is expected to reintroduce two staples of his 2021 Build Back Better agenda, raising the top marginal income tax rate from 37 percent to 39.6 percent and raising the corporate tax rate from 21 percent to 28 percent.

Let’s stop there, for a minute.

While Biden’s budget will be DOA in Speaker McCarthy’s House, let’s “unpack” just two of the above items: taxing capital appreciation (unrealized gains), and increasing corporate taxes.

Taxing Unrealized Gains

One doesn’t have to be Warren Buffett to know that equity markets are variable. Hence the stock market indices rise — and fall. They always have; they always will. Long-term capital appreciation (and capital depreciation) takes that reality into account.


While we’ve not yet seen the details of Biden’s proposal, let’s presuppose an investor (under the proposal) pays income tax or even capital gains tax on capital appreciation (without selling an appreciated asset, mind you), what happens next year if that same investment depreciates in value?

A tax credit? Or a capital loss? Now, imagine the nightmare of putting up with that nonsense every year on a large stock portfolio. This is pure insanity — and the Democrats will push the hell out of it, precisely because they know that tens of millions of Americans don’t understand a lick about any of it. Even “better,” they don’t care. As a long-time investment manager, I could go on — but I won’t. (You’re welcome.)

Raising Corporate Taxes

This one’s easy. For-profit companies are in business for a primary reason. Ready? For profit. Who knew? So, whether you’re a cupcake baker with no employees or a mega-corporation, you pass expenses (including taxes) to the bottom line. Next “hard” question: Who ultimately pays those expenses? Yup, you got it: the end consumer. Always have, and always will.

Again, Democrats are fully aware that their “little guy just trying to make ends meet” vs. heartless evil corporations shtick goes over the heads of tens of millions of rank-and-file Democrat voters.


Senate Minority Leader Mitch McConnell told reporters, as transcribed by The Hill:

You know the president’s budget is replete with what they would do if they could — thank goodness the House is Republican — massive tax increases, more spending. The American people can thank the Republican House that Biden’s proposed tax increases will not see the light of day.”

You know what else the American people should thank goodness for, Mitch? That the Democrats don’t control the House and that you don’t control the Senate? Think about it, Mitch.


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