Democrats’ Crippling $3 Trillion Tax Hike on Working Families and Small Biz Kills Jobs and Cures
Democrats are moving forward with their $3 trillion tax increase on working families and small businesses to fund the greatest expansion of the welfare state in most of our lifetimes. Worse, it even wastes tax dollars on subsidies to the wealthy and special interests. Here is a quick run-through of some of the worst parts of this bill.
Democrats Break Promises and Raise Taxes (and Utility Prices) on Middle Class
Democrats’ tax increase will hit working families hard, and will result in higher consumer prices, fewer jobs, and lower wages. This is despite President Biden’s pledge not to raise taxes on the middle class.
- The Joint Committee on Taxation says that more than 66.3 percent of the corporate tax burden would be borne by lower- and middle- income taxpayers, and 172 million taxpayers would bear the burden of the increased corporate tax rate. The left-leaning Tax Policy Center agrees.
- Customers will bear the cost of corporate income taxes in higher prices – paying more for everything from groceries to utilities.
- Workers bear 70 percent of the corporate income tax in the form of wages and employment. Similarly, a 2020 study by the National Bureau of Economic Research found that 31 percent of the corporate tax falls on consumers.
Democrats Target Main Street Businesses
American small businesses struggled throughout the pandemic, so the last thing they need are Democrats’ crippling tax hikes.
- Millions of Main Street job creators will be left shouldering the burden of Democrats’ small business tax hike.
- The majority of the more than 30 million small businesses in the U.S. are pass-through entities in which tax obligations are passed to the owners. Pass-through businesses also account for over half of all private sector workers. More than half of all pass-through income would be taxed at this new, higher rate.
- Democrats are expanding the death tax to hit more small businesses–and to take more from them. This trojan horse for a supercharged second death tax will force family-owned businesses to sell off assets in order to pay a massive tax bill to the IRS. These tax changes will cost 1 million jobs over the long term.
- The Biden Administration has claimed that the majority of small businesses will be exempt from his tax hikes – but the Tax Foundation has said that’s “misleading.” In fact, almost 900,000 small businesses could be hit with Democrats’ limitation of the passthrough deduction based on 2018 IRS data.
Democrats’ Economic Surrender Makes It Better to be a Foreign Company or Worker than an American One
Democrats’ global minimum tax makes it better to be a foreign worker or company than an American one–putting American companies at a disadvantage to foreign competitors.
- Democrats are seeking a corporate tax rate that is higher than Communist China’s, and a tax on American companies’ foreign earnings that’s higher than our competitors.
- According to the National Association of Manufacturers, the Biden Administration’s global minimum tax would destroy up to 1 million U.S. jobs.
- American companies would pay this higher global minimum tax for operating abroad while also paying Democrats’ higher corporate rate for operating at home—making America even less competitive and driving jobs, manufacturing, research, and investment overseas.
Democrats’ Obamacare Expansion Ignores the Rising Cost of Care, Harms Seniors, Neglects Telehealth
Democrats will kill up to 100 life-saving cures by importing socialist price controls from foreign countries to the American market, stifling innovation and future cures for patients, so they can instead spend hundreds of billions to prop up Obamacare. This new coverage could cost workers up to 10 times per person the amount of their coverage. This isn’t about expanding coverage, but instead artificially supporting their highly flawed law that hasn’t delivered on its promises.
- Democrats are chasing ever increasing costs with ever increasing spending, raised at the expense of fewer cures. To compound this waste, Democrats will spend $170 billion to permanently remove income restrictions on ACA subsidies, which means taxpayer dollars could flow to wealthy Americans.
- For example, a 64-year-old couple in Kay County, OK earning $500,000 per year, would qualify for a premium tax credit of almost $6,000.
- Government price controls and the threat of huge tax increases will dramatically hurt innovators’ ability to research and develop cures for Alzheimer’s, ALS, and cancer. The costliest cure is the one that never got developed.
- Fewer new medicines are available when governments set the cost. Today, Americans have access to all 270 global new medicines that have been discovered from 2011-2018. In Canada, hardly half of patients have access to these cures.
- Yet, Democrats, amongst $3.5 trillion in spending, couldn’t find a single dollar to ensure seniors will have continued access to telehealth when the COVID-19 public health emergency ends. Telehealth has been vital to improving access to care among seniors in rural and underserved areas.
Democrats Bring Special Tax Credit Circus Back from the Dead
Despite a historic end-of-year bipartisan agreement to end the special interest tax credit circus, Democrats are bringing back special tax credits for political priorities, including tax credits for which wealthy owners of electric vehicles qualify.
- A person making $800,000 a year would qualify for a 12,500 tax credit for an electric BMW or Mercedes. Cost: $16 billion.
- Those earning over $160,000 a year can get a rebate for e-bikes up to $1,200. Cost: $7.5 billion.
- Creating a special activist workforce to pursue environmental justice – Cost: $15 billion.
Democrats Ignore Rampant Fraud By Expanding Wasteful Tax Credits
Even though an astonishing amount of Americans’ hard-earned tax dollars are wasted in improper tax credit payments, Democrats are expanding problematic tax credits without any reforms.
- In 2015, the IRS made $15.6 billion (23.8% of all payments) in improper Earned Income Tax Credit (EITC) payments.
- In 2019, that number increased over time to $17.4 billion (25.3% of all payments) in improper EITC payments. A concerning pattern also exists for Additional Child Tax Credit (ACTC).
The Child and Dependent Care Tax Credit is being expanded at a cost of $98 billion through 2025, and the Earned Income Tax Credit’s expansion will be made permanent for $135 billion.