Biden's Bloated Budget and Massive Tax Grab

• Biden's fiscal 2024 budget will increase deficits and hike the national debt
• His tax proposals for business will result in offshoring of operations
• The president's plan targets energy production which will drive up prices
• The tax scheme includes a dubious effort to tax phantom income 

The most shameless political gimmick is to shriek: "Tax the rich!" Pandering politicians know few Americans will argue with the logic. Taxpayers dream soaking the wealthy will lower their own taxes. It never does. Still bashing billionaires is a sure-fire re-election gambit.

President Biden recently unveiled his massive $4.7 trillion tax plan with an eye toward his 2024 campaign. His complex proposals are designed to roll back President Donald Trump's tax cuts while daring Republicans to oppose a tax blood-letting of big businesses and billionaires

The president's strategists are counting on Americans tax illiteracy. The top one percent of America's wealthiest earners paid 42.3% of all federal income taxes, according to the most recent data.  The top 50% paid 97.7% of federal individual income taxes.  The bottom half paid 2.3%. Facts matter. 

Despite Biden's rhetoric, America's most prosperous are paying their fair share.  It is disingenuous and not factual to claim otherwise.  If the president was honest with Americans, he would simply admit his   massive tax hikes are needed to fund his deficit-busting $6.5 trillion federal budget for fiscal year 2024. 

Biden's claims his budget will cut deficits is a sham. The non-partisan Congressional Budget Office projects deficits will average $2 trillion per year from 2024 to 2033. Since his first budget, Biden's spending will increase the nation's public debt to $50.7 trillion by 2033, nearly 106.3% of GDP.

Under the Biden tax plan, American businesses and high-earners would pay among the highest taxes in the developed world.  Although the president tosses word salads about going after those filthy rich billionaires, his tax increases are aimed at Americans earning $400,000 and up.   

The non-profit, independent Tax Foundation weighed the impact of the proposals against tax rates of member countries in the Organization for Economic Co-operation and Development. The comparisons underscore the titanic nature of Biden's tax regime. 

America's corporate marginal rate on corporate income would increase from 25.7% to 32.2%. The OECD average, excluding the U.S. is 22.8%.  The combined integrated rate on corporate income would climb from 47.3% to 66.9%, compared to the OECD average of 41.%.

This means U.S. firms will be at a competitive disadvantage with companies in other countries.  As past history shows, American corporations will be incentivized to move operations offshore where taxes are lower.  The result will be job losses in the U.S. at a time when companies are already cutting payrolls.

The plan raises the current top marginal rate on individual income to 45.4%, compared to the OECD average of 42.6%.  Many households earning $400,000 and over will face top tax rates of 50% when the federal rate is combined with state income taxes. 

The marginal tax rate is the amount of additional tax paid for every additional dollar of income. As an example, a 10% marginal rate means that 10 cents of every additional dollar earned is confiscated by the government.  An average tax rate is the total tax paid divided by the total income earned.  

The Biden tax scheme includes nearly doubling the tax on capital gains income from 29.1% to 49.8%.    Americans who sells stocks, bonds, real estate or other investments will have to give Uncle Sam almost one-half of any gains.  That will discourage individual investments in stocks. 

Perhaps, the most odious part of the Biden blueprint is a tax on phantom income.  This contrivance calls for taxing unrealized capital gains with a 25% minimum tax.  What this means is that if you hold investments that have increased in value, that amount will be taxed even though you haven't sold any.

Biden's daft plan also punishes the oil, gas and coal production sectors with $100 billion in tax increases. For example, his deal with the tax Devil includes repeal of expensing tangible drilling costs for labor, equipment, surveys and other items.

Those are just the highlights.  There are a myriad of other taxes aimed at businesses, the economic engine of the American economy.  Higher taxes on business are always paid by the corporation's customers through higher prices on products and services. 

The gross (pardon the pun) total of all those tax increases is $4.7 trillion.  That is the largest tax hike in history in terms of dollars.  Media fact-checkers are trying their best to cover up for Biden by claiming it is not the largest if you compare the new taxes as a percentage of GDP.  

However, even if you accept the fact-checkers skewed logic, the only plan that ranks higher as a percentage of GDP is the Revenue Act of 1942.  Those taxes were needed to pay for the military buildup after the U.S. declared war on Japan and Germany.  That makes the comparison unreasonable.

If President Biden is serious about tax fairness, he should offer a plan to simplify taxes. His reform does the opposite. Even worse, the tax hikes on businesses will cripple economic growth, encourage U.S firms to ship jobs overseas, raise energy prices and burden consumers with even higher prices.

The president's political budget and tax stunt deserve an ignominious burial in the halls of Congress.  Then serious work can begin on a bipartisan fiscal budget that maintains tax equity, reduces deficits and supports a prosperous economy for all Americans.