The Past is Prologue: Record of Raising Taxes
When asked what he we would do differently the next two years, President Biden responded, “nothing.” It’s safe to say the President’s Budget will include more of the same tax policies that have increased the burden on working- and middle-class American families, added an army of new IRS agents, targeted small businesses, employers, and investment in the future for higher taxes, all while creating new giveaways for special interests.
Tax Increases on Working and Middle Class Americans
- In his State of the Union, President Biden repeated his promise that “nobody earning less than $400,000 will pay an additional penny in taxes. Nobody. Not one penny.” But Biden’s record doesn’t match his rhetoric.
- His budgets have proposed to end the 2017 tax cuts, which would increase tax rates for all taxpayers and slash the standard deduction. The Tax Cuts and Jobs Act reduced the tax burden for middle class families by $2,000 per year.
- The “Inflation Reduction Act” will increase taxes on millions of Americans earning less than $400,000. The non-partisan Joint Committee on Taxation analysis of the bill found that it would:
- Increase the tax burden on American taxpayers earning less than $200,000 by $10.6 billion this year.
- By 2031, those earning below $75,000 would have a net tax increase while those earning over $500,000 would have a tax cut of $3.1 billion.
- The IRS will use its $80 billion and 87,000 new agents to target lower- and middle-income earners. According to the non-partisan Joint Committee on Taxation, 78 percent to 90 percent of the money raised would come from taxpayers earning less than $200,000 per year.
- The American Rescue Plan Act lowered the third-party payment reporting threshold to $600. This would subject users of Venmo or Paypal who receive $600 or more a year – including for transactions as innocuous as selling a couch or babysitting – to greater scrutiny from the IRS.
Biden’s Inflation Tax
- Biden’s reckless spending spree fueled a surge in inflation, with the consumer price index hitting increases not seen in four decades. This inflation is a tax on American families.
- Inflation has grown faster than wages, with the average worker taking home $2,300 less in inflation adjusted earnings than they did in January 2021.
- Since Biden took office, the prices for household essentials have skyrocketed, with the cost of eggs up 229%, flour 32.9%, lunchmeat 21.1%, milk 19%, natural gas 57.2% and gasoline 48.4%.
Tax Increases on Small Businesses, Employers, and Investment
- The “Inflation Reduction Act” imposed a new 15% corporate minimum tax, increasing taxes on employers by $222 billion.
- 49.7 percent of the tax will be borne by the manufacturing industry, according to analysis by the non-partisan Joint Committee on Taxation.
- The Tax Foundation estimates this new tax will cost 20,000 jobs and slow investment and economic growth.
- Workers in Indiana, Wisconsin, Michigan, North Carolina, and Kentucky would endure the biggest economic hit from the new tax.
- Biden’s budgets have proposed ending the 2017 tax cuts, which would end vital policies that support investment and economic growth, such as immediate expensing for capital investment and research and development.
Special Interest Tax Giveaways
- At the same time President Biden’s policies have increased the tax burden on American families and job creators, he has signed into law numerous special interest tax breaks for well-connected special interests.
- The “Inflation Reduction Act” included more than $200 billion in tax subsidies for green energy, such as tax credits for electric vehicles and wind and solar.
- Biden says the new 15% corporate minimum tax created by the “Inflation Reduction Act” will force corporations to pay their fair share. But it includes numerous loopholes for special interests, including carving out union pensions, electric vehicle purchases, green energy subsidies, and profitable chipmakers.
- Companies can even write off bribes, penalties, and fines under the minimum tax.
Adding 87,000 New IRS Agents
- The IRS has a long history of abusing taxpayers, including targeting conservatives.
- The “Inflation Reduction Act” included an $80 billion slush fund for the IRS.
- The Biden administration’s proposal for this funding is to add nearly 87,000 new IRS agents.
- The new funding is equal to six times the normal annual IRS budget, which already supports about 35,000 enforcement agents.
- The new agents and new funding could be used to subject small businesses and middle-class taxpayers to more IRS scrutiny.
- Even a 3,000% increase in audit rates for taxpayers making more than $400,000 would fall short of raising the new revenues being claimed, according to Heritage Foundation analysis.
According to Gallup, only 37% of Americans have a favorable opinion of the IRS