Study: Biden Budget Tax Increases Destroys Jobs, Cuts Wages, Reduces Economic Growth
WASHINGTON, D.C. – President Biden’s Fiscal Year 2024 (FY24) budget would cut jobs, slash wages, and reduce economic growth for families already struggling to get by, according to a new non-partisan study. In a recent analysis, the Tax Foundation found that President Biden’s $4.7 trillion tax hike on workers, families, farmers, and small businesses would:
- Destroy 335,000 jobs.
- Cut workers’ wages by 1 percent.
- Reduce growth in America’s economy by 1.3 percent.
House Ways and Means Committee Chairman Jason Smith (MO-08) said:
“Through his budget, President Biden demonstrates he doesn’t care about how his failed policies will affect the American people. As America’s economy continues to stumble, President Biden is threatening to increase taxes by nearly $5 trillion which, according to non-partisan analysis, will reduce economic growth by 1.3 percent. This will make life harder for working-class Americans struggling to put food on their tables, clothes on their backs, and gasoline in their cars. It is projected that families who are already feeling the sting of inflation will see their wages fall by a full percentage point under this budget – that’s on top of their wages declining 3.7 percent since Joe Biden became President. 335,000 jobs are projected to be eliminated from our economy as the Biden Administration continues its assault on workers by once again raising taxes on job-creators. What’s worse, the combined effect of fewer jobs and lower wages will push Social Security closer to insolvency and threaten the retirement of millions of seniors.
“It is clear from this budget that Democrats see lost jobs, shrunken paychecks, and a weak economy as just the price that must be paid to enact their far-left agenda. The Ways and Means Committee is holding hearings outside the beltway to hear from working Americans who are telling us that their communities, neighbors, and employees would benefit from tax relief, not a tax hike that makes the sting of inflation and the worker shortage worse.”
In their analysis, the Tax Foundation admits they may only be scratching the surface of the damage Biden’s budget will impose on working families and America’s economy:
“Our estimate likely understates the full economic harm from the budget…”
The Tax Foundation challenges President Biden’s claims that his budget is a fiscally responsible plan to reduce America’s deficit spending:
“The actual deficit reduction is highly uncertain, as at least $1 trillion of the estimated reduction comes from untested revenue sources (e.g., the billionaire minimum tax and UTPR). Further, if certain policies discussed in the budget were extended, it could wipe out all of the projected deficit reduction, while still harming long-run economic output.”
In other words, the Biden Budget imposes massive tax hikes that will destroy jobs, wages, and the economy while doing nothing to actually get America’s fiscal house in order.
Key Takeaways from Biden’s Budget:
- Raises Taxes on Small Businesses: Raises the $650 billion net investment income tax on small businesses under the false promise of making Medicare solvent. Democrats are double counting this tax hike, having already counted it for fake deficit reduction.
- Kills American Jobs: The Biden Budget tax hikes will kill 335,000 jobs, hurting workers’ ability to provide for their families and make ends meet.
- Squeeze Family Budgets: Wages will fall by 1.0 percent, which will hurt workers who have already lost $10,000 from Biden’s inflation crisis. Real wages have decreased 3.7 percent since Joe Biden became President.
- Gives China a Competitive Edge: Capital stock declines by 2.4 percent, making it harder to make the investments needed to bring key supply chains back to America and away from Communist China.
- Makes the Labor Shortage Worse: Biden’s budget revives the dismantled Child Tax Credit (CTC) scheme from the American Rescue Plan that stripped away work requirements. The result is an ongoing labor shortage with Americans pushed to the sidelines of the economy.
- In all of 2021, 1.6 million returned to the workforce. In the first two months of 2022, when work requirements in the CTC were restored, 1.7 million Americans returned to the labor force.
- Hurt American Energy Production: New taxes on the energy supply chain in America will make American energy less competitive on the world market, hurting workers.
- Cuts Social Security Benefits: Fewer jobs and lower wages will lower projected revenues into the trust fund, speeding up Social Security’s insolvency.
Read: Tax Foundation’s “Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal”
Read: President Biden’s $4.7 Trillion Tax Hike Proposal: Small Businesses Must Send a Bigger Check to Washington
Watch: Working Americans Testify They Need a Tax Cut, Not a Tax Hike