Millions of small businesses, workers, and middle-class families will be hit by President Biden’s tax increases.
Over a million small businesses that file as “C Corps” would be hit by President Biden’s corporate tax increase, while millions more small businesses that file taxes as “pass throughs” (meaning, filing with individual returns) will be hit by what President Biden’s supposed tax on the “wealthy.” This means higher prices, lower wages, and fewer jobs.
Additionally, the liberal Tax Policy Center has found that President Biden’s tax increase will also hit the middle class.
As Bruce Thompson writes, the Biden tax increases will reverse historic gains made under Republican tax reform:
“…After the  tax cuts went into effect, the U.S. economy boomed, with increased capital investment, more jobs, and more income growth.
“Working people benefited tremendously after the tax cut with record-breaking wage increases, lower unemployment rates, and falling poverty levels.
“The corporate rate reductions worked to boost wages, create jobs, and lift people out of poverty, helping people who needed it the most.”
Republican Tax Reform Helped All Americans.
- After the Tax Cuts and Jobs Act (2017), real wages grew 4.9 percent, the fastest two-year growthin real wages in 20 years.
- Incomes for black, Hispanic, and Asian Americans saw record increases and unemployment fell to all-time lows under TCJA.
- More than 6 million people were lifted out of poverty, and the poverty rate fell to 10.5 percent, the lowest level in U.S. history.
- Biden corporate tax increases would reverse these gains, resulting in slower growth, fewer jobs, and lower wages.
Democrats’ Tax Hikes Will Destroy Jobs and Sabotage Our Economic Recovery.
- Every American will shoulder the burden of Democrats’ tax hikes, which will slash wages, raise prices, and ship U.S. jobs overseas.
- Already facing challenges from unemployment insurance benefits, tax hikes on Main Street businesses will make it harder to hire and limit opportunity.
The people who ultimately lose are working Americans who will find that even working full time, they make less.
Read the full op-ed here and below.
By: Bruce Thompson
July 12, 2021
In 2017, Congress reduced the corporate tax rate to 21%, lowering the highest rate in the industrialized world and putting American businesses on a more level playing field with their global competitors.
In the next two years, after the tax cuts went into effect, the U.S. economy boomed, with increased capital investment, more jobs, and more income growth. Working people benefited tremendously after the tax cut with record-breaking wage increases, lower unemployment rates, and falling poverty levels. The corporate rate reductions worked to boost wages, create jobs, and lift people out of poverty, helping people who needed it the most.
But now, President Joe Biden wants to raise the corporate tax rate, forcing companies to pay the highest tax rate in the industrialized world once again. Why would anyone want to repeal these tax cuts after all the good they did, especially when the economy is just beginning to recover from the pandemic?
Let’s review how the 2017 tax cuts benefited working people. In 2018-2019, real wages grew 4.9%, the fastest two-year growth rate in real wages in 20 years. Real median wages increased $4,400 in 2019, the largest one-year increase in U.S. history. Incomes for black (7.9%), Hispanic (7.1%), and Asian Americans (10.6%) saw record increases. Median household income reached $68,703 in 2019, an increase of 6.8% over 2018.
The unemployment rate fell to 3.5% by the end of 2019, the lowest level in 50 years. The unemployment rate for black Americans dropped to 5.4%, the lowest level on record. The unemployment rate for Hispanic Americans fell to 3.9%, also the lowest level on record.
From 2017 to 2019, 6.6 million people were lifted out of poverty. The poverty rate fell to 10.5% in 2019, the lowest level in U.S. history. Poverty rates for black, Hispanic, and Asian Americans fell to all-time low levels. Nearly 3 million children were lifted out of poverty between 2016 and 2019, reducing the child poverty rate to a 50-year low.
Income and wealth inequality also fell. The real wealth of the bottom 50% of households rose three times faster than that of the top 1%. Real wages for the bottom 10% grew nearly twice as fast as the top 10%. The corporate tax rate cut boosted the U.S. economy, delivering strong income, job, and wealth gains to all people at every income level. The tax cuts delivered record increases in median income, record low unemployment rates, and record low poverty levels for all Americans.
Biden’s corporate tax increases would reverse these historic gains, resulting in slower growth, fewer jobs, and lower wages. Why would Congress want to put these gains at risk just as the economy begins to recover?
Bruce Thompson was a U.S. Senate aide, assistant secretary of treasury for legislative affairs during the Reagan administration, and director of government relations for Merrill Lynch for 22 years.