In his first press conference since inauguration, President Biden promoted policies that would make America less competitive, while downplaying how the GOP-led Tax Cuts and Jobs Act fostered American economic growth with higher wages, more jobs, and greater innovation.
MISLEADING BIDEN CLAIM #1:
President Biden misleadingly claimed that the Tax Cuts and Jobs Act of 2017 helped only the top 1 percent instead of putting “money in ordinary people’s pockets.”
President Biden and Democrats are fudging the numbers: FactCheck.org debunked this tired talking point more than three years ago, calling it misleading. The New York Times said, “Face It: You (Probably) Got a Tax Cut.” Not even the left-leaning Tax Policy Center supports President Biden’s numbers.
Ordinary people did enjoy significant benefits from tax reform:
- Republican tax reform reduced taxes across the board, raising incomes for Americans at every income level
- Republicans doubled the child tax credit, providing immediate benefits to families
- Our economic strength after tax reform brought major benefits to hardworking Americans, including the lowest unemployment in 50 years
- Unemployment among African American and Hispanic workers reached all-time lows
- After TCJA, America enjoyed the fastest wage growth in a decade.
- That wage growth was fastest for the lowest quartile of workers, averaging 4.5 percent during 2018-19. They beat out workers in the top earning 25 percent received wage increases of 3.0 percent in 2018 and 2019, significantly higher than the 3.0 percent wage growth for the top 25 percent
- Under-employment—including part-time workers who desire full-time work—dropped from 9.3 percent in January 2017 to 6.7 percent in 2019, which was the lowest rate on record.
Democrats have repeatedly refused to commit to extending tax reform’s strong support for the middle class. Their inaction would mean, on average, households making less than $155,000 in 2027 would lose the tax cuts Republicans gave them.
MISLEADING BIDEN CLAIM #2:
President Biden misleadingly claimed that American companies don’t pay their fair share by saying, “90 of the Fortune 500 companies making billions and not paying a cent in taxes.”
From sales taxes to property taxes to payroll taxes, Fortune 500 companies pay billions of dollars in taxes to local, state, and federal government.
Federal tax laws provide important bipartisan tax incentives to encourage specific economic activity—including investments in R&D, energy innovation, low-income housing, and distressed communities—which reduces taxable income without changing financial statement profits.
- Further, the think tank that President Biden cited, The Institute on Taxation and Economic Policy, made similar claims as far back as the Obama Administration, continually confusing the difference between taxable income and financial statement profits.
Tax reform further promoted investment in R&D and equipment, which contribute to economic growth and higher wages.
- Thanks to tax reform, companies like FedEx were able to spend more on equipment and wages, which would in turn spur greater economic growth and more revenue—but still drew criticism from Democrats. Do Democrats really believe taxing and spending is the only way to support R&D?
MISLEADING BIDEN CLAIM #3:
President Biden misleadingly suggested that R&D investments have taken a dive since the 1960s when he said: “Back in the 1960’s, America invested more than 2 percent of GDP in pure research and investment in science. Today it is 0.7 percent.”
Spending on R&D as a share of real GDP has never been higher and picked up after TCJA enactment.
- Before the pandemic, R&D as a percent of real GDP was more than 3 percent.
Republicans have repeatedly called for additional investment by providing greater incentives for R&D. Just last July, Republicans unveiled a pro-growth agenda that included:
- Doubling the R&D Tax Credit
- Bringing back American jobs by returning intellectual property to the U.S.
- Making it easier for entrepreneurs to start new innovative medical companies
- Making permanent TCJA’s full expensing provisions which helps promote investment
- Incentivizing long-term investments in technological breakthroughs by continuing to allow immediate deductions for R&D costs
MISLEADING BIDEN CLAIM #4:
President Biden said he plans to address China with “strong competition” and to “deal with China effectively” by “investing in American workers and American science” as well as “hold China accountable.” But his policy and inaction so far say otherwise.
Biden’s Tax Policies Would Make China Stronger, and America Less Competitive.
- China’s corporate income tax rate is 25 percent, despite being a Communist nation. President Biden has vowed to increase our federal rate to 28 percent, on top of state corporate taxes, exposing American firms to takeovers from competitors based in Communist China.
Biden Remains Unclear on Enforcement and Holding China Accountable Through Phase One Agreement.
- President Biden has so far not committed to any action to enforce the China Phase One Agreement achieved during the Trump Administration, which included very specific requirements that protect American workers.
Instead of misleading Americans about the benefits of tax reform while pushing a purely partisan tax-and-spend agenda, President Biden should lead bipartisan discussions on how we can return to our pre-pandemic economic strength. Republican tax policies put money in people’s pockets, and as long as Democrats cast aside their promise to repeal TCJA’s successes, those policies will continue to help working families.