By William Haupt III | The Center Square contributor
President
Joe Biden speaks about the COVID-19 pandemic during a prime-time address from
the East Room of the White House, Thursday, March 11, 2021, in Washington. Andrew
Harnik | AP
“Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?”
– Thomas Sowell
America is the only nation that was formed on the backs
of a tax revolt; yet the one promise that resonates with voters is the
progressives’ pledge to “tax the rich.” Increasing taxes on the rich is the
first thing proposed during any liberal’s stump speech and the last thing
promised before the polls close on Election Eve. Liberals justify this as a
means to an end; to pay down deficit, and give them more money to spend on social
and welfare programs for the poor and the under-classes.
But the flaw in this logic is higher rates don’t result
in an increase in tax revenues since changes in rates alter behavior. Most all
businesses and taxpayers will do whatever it takes to minimize their tax
burden. Politicians view tax increases in real time, at the present rate of
production and spending, and with no regard for the future. They never factor
in the new “tax avoidance” strategies and “loopholes” taxpayers rediscover. And
all politicians overlook the real net revenue gain and revenue lost.
Today’s progressive socialists have engaged in a romance
with FDR’s New Deal. And they have taken a page out of his playbook to double
down on his efforts since they now control government.
President Joe Biden ran on a platform to “tax the rich
and put a chicken in every pot.” He pledged a “better deal” for America than
Roosevelt dealt us. Biden preached dark days ahead for America if Donald Trump
was reelected. The media anointed Biden the second coming of FDR with his
“Build Back America Better” bad deal.
“If you elect me, your taxes are gonna be raised, not
cut.”
– Joe Biden
It’s about time that Americans recall how Franklin
Roosevelt financed his political spending spree. While English economist John
Maynard Keynes was urging Roosevelt to embrace an aggressive program of
debt-financed spending, FDR needed immediate cash. And his “quick fix” was
through increased taxes.
All of FDR’s New Deal programs were financed by
increasing taxes. He tripled federal taxes from $1.6 billion from the time he
took office to $5.3 billion in 1940. He looked under every rock in D.C. for
revenue. He increased the inheritance tax, excise taxes, and personal and
corporate income taxes.
“When you come to the end of your rope, tie a knot and
hang on.”
– Franklin D. Roosevelt
The biggest source of revenue to finance FDR’s spending
came from those who could least afford it: average Americans. Excise taxes were
levied on alcohol, tobacco, candy, gum, margarine, fruit juice, soft drinks,
butter, telephone calls, bikes, matches, movie tickets, cards, electricity,
radios, cars and tires. Almost every everyday commodity Americans used was
subjected to excise taxes.
Henry Morgenthau, head of the Treasury Department, played
a major role in designing Roosevelt’s tax swindle. He convinced FDR to raise
the price of gold to inflate the currency so he could spend more. In one of
FDR’s “Fireside Chats,” he admitted the “less affluent” were hurt most by the
excise taxes. There is no question the New Deal was a bad deal for everyone,
especially the middle class.
Because of FDR’s New Deal taxes, the Depression lingered
on until the beginning of World War II. His taxes were a major job killer
during the 1930s.
And unemployment rates averaged 17%. With the new Social
Security tax on personal income and increased taxes on businesses, employers
had less money for growth and did not create new jobs. With each New Deal
program there was a new tax to pay for it and average Americans footed the
bill.
“It is common sense to take a method and try it. If it
fails, try another one.”
– Franklin D. Roosevelt
FDR’s New Deal tax rates took business capital away from
the investment market, which killed job growth. He robbed Peter to pay Paul for
dozens of new federal programs. When Paul ran out of money, he raised
everyone’s taxes. And each new program produced unintended consequences.
It is conventional wisdom that people adjust their
investment and spending in response to changes in tax rates, and the length of
the Great Depression proved this. We learned FDR’s policy of taking tax dollars
from one group and giving them to others politicizes a recovery. Yet today’s
socialist progressives are using FDR’s failed New Deal formula to win
elections, because people buy into it.
Everyone should run from Joe Biden‘s pledge not to
increase individual taxes on anyone making less than $400,000. When he
increases the top individual income rate from 37%, to 39.6%, among other
increases, this will be a net gain of over $4 trillion in revenue over the next
decade. And we must not forget the commitment he made to the socialist left to
reinvent America with this revenue.
A high priority for progressives and socialists is to
push the corporate rate up to 28% from 21%. The new left would jump for joy to
see higher taxes on large corporations; and it would be a repeat performance of
FDR’s botched economic policies. It would further entomb our weak economy and
it would reduce U.S. productivity and wages. And Biden promised to double the
minimum wage?
In 1994, under their Contract with America, Newt Gingrich
and his Republican Congress reduced taxes, cut spending and reformed the
welfare system. By 1997, unemployment dropped to 5.3% and Congress passed the
Taxpayer Relief Act. A reluctant Bill Clinton ultimately signed it into law.
“I believe that the most important social welfare program
in America is a job.”
– Newt Gingrich
When Trump took office in 2016, he implemented a program
of tax cuts, spending increases and pressured the Fed to cut interest rates.
His goal of 3% growth was derided as delusional by liberal media. Not only did
the unemployment rate fall, but the percent of Americans employed saw its first
sustained rise since the late 1980s. This inflection point changed the
character of the labor market.
Aristotle told us, “We are what we repeatedly do.
Excellence is a habit.” FDR’s wealth redistribution scheme is responsible for
this “everyone should pay their fair share” attitude of the left. Yet nobody
has determined what someone else’s fair share is? When you tax something, you
get less of it. Is that fair or stupid? FDR proved that tax increases reduce
buying power and hurt the labor market, which in turn ruins the economy.
Biden’s reincarnation of the New Deal is a “raw deal” for America.
Biden ignores the successes of the Trump economy before
the pandemic. The socialists might not like it, but if Biden is smart, he will
continue Trump’s growth policies and trade initiatives. And it is crucial that
he does not believe his own campaign rhetoric. Trump proved an aggressive
growth strategy improves the fortunes of everyone in America. We do not need
another “Bad Deal.”
“The first lesson of economics is scarcity: There is
never enough of anything to satisfy all those who want it. The first lesson of
politics is to disregard the first lesson.”
– Thomas Sowell
Biden pushes $2T infrastructure spending plan
By Ted O'Neil | The Center Square contributor
(The Center Square) – President Joe Biden unveiled
Wednesday a $2 trillion infrastructure spending proposal he called the
“Build Back Better” plan at an event in Pittsburgh.
Appearing at a union training center for carpenters,
Biden said, “People will look back in 15 years and say this is the moment that
America won the future.”
Analysts have projected the spending will create 18 million
new jobs over four years, Biden said.
“This will create the strongest, most resilient and
innovative economy in the world,” the president said.
Biden called for spending $620 billion on transportation
infrastructure, including 20,000 miles of roads and thousands of bridges, $650
billion to expand broadband access and $580 billion on research and
development.
Some of the more specific items include $174 billion to,
as Biden put it, “win” the electric vehicle market and $16 billion to plug orphaned oil and gas wells. He
also wants to build 500,000 charging stations for electric vehicles and offer
tax incentives and rebates for those who buy them.
Another $213 billion would go toward building 2 million
clean energy homes, and $110 billion would be used to replace lead pipes in
some 10 million homes and 400,000 schools.
Biden said critics have questioned the benefits of such
massive spending, but he said doubters had the same attitude toward the space
program.
“More than 2,000 products have been invented as a result
of the space program that we all benefit from today,” Biden said. “Things like
GPS and computer chips."
Harkening back to President Franklin D. Roosevelt's
New Deal, Biden also wants to spend $10 billion to create what he has called a
Civilian Climate Corps. FDR’s Civilian Conservation Corps was active during the
Great Depression, employing hundreds of thousands of young men who worked on projects
in America’s national parks and forests.
Biden said his initiative could “harness the energy” of a
younger generation to mitigate wildlife risks, protect watershed health and
increase access to recreation areas. The president also believes it could be
used as an apprenticeship program to prepare people for long-term careers in
the clean energy sector.
Administration officials said the spending would be
covered by increasing the corporate tax rate from 21% to 28%. The rate had been
at 35% before President Donald Trump pushed for a reduction in 2017.
Biden’s plan, however, is not without detractors from
both sides of the aisle.
“Our nation could use a serious, targeted infrastructure
plan,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement.
“There would be bipartisan support for a smart proposal. Unfortunately, the
latest liberal wish-list the White House has decided to label 'infrastructure'
is a major missed opportunity by this Administration.
"The plan is not about rebuilding America's
backbone. Less than 6% of this massive proposal goes to roads and bridges. It
would spend more money just on electric cars than on America's roads, bridges,
ports, airports and waterways combined," McConnell said.
Congresswoman Alexandria Ocasio-Cortez, a Democrat from
New York, criticized the plan for spending too little.
“This is not nearly enough,” she tweeted Tuesday. “The
important context here is that it’s $2.25T spread out over 10 years. For
context, the COVID package was $1.9T for this year alone, with some provisions
lasting [two] years.
"Needs to be way bigger."
Trump Slams Biden's Tax Hike as the 'Largest Self Inflicted Economic Wound'
By Katie Pavlich | Townhall.com
Source: (AP Photo/John Raoux)
Here is former President Donald Trump’s full s blistering
statement blasting President Joe Biden’s massive tax and “infrastructure” plan:
Joe Biden’s radical plan to implement the
largest tax hike in American history is a massive giveaway to China, and many
other countries, that will send thousands of factories, millions of jobs, and
trillions of dollars to these competitive Nations. The Biden plan will crush American
workers and decimate U.S. manufacturing, while giving special tax privileges to
outsourcers, foreign and giant multinational corporations.
Biden promised to “build back better”—but the
country he is building up, in particular, is China and other large segments of
the world. Under the Biden Administration, America is once again losing the
economic war with China—and Biden’s ludicrous multi-trillion dollar tax hike is
a strategy for total economic surrender. Sacrificing good paying American jobs
is the last thing our citizens need as our country recovers from the effects of
the Global Pandemic.
Biden’s policy would break the back of the
American Worker with among the highest business tax rates in the developed
world. Under Biden’s plan, if you create jobs in America, and hire American
workers, you will pay MORE in taxes—but if you close down your factories in
Ohio and Michigan, fire U.S. workers, and move all your production to Beijing
and Shanghai, you will pay LESS. It is the exact OPPOSITE of putting America
First—it is putting America LAST!
Companies that send American jobs to China
should not be rewarded by Joe Biden’s Tax Bill, they should be punished so that
they keep those jobs right here in America, where they belong.
This legislation would be among the largest
self-inflicted economic wounds in history. If this monstrosity is allowed to
pass, the result will be more Americans out of work, more families shattered,
more factories abandoned, more industries wrecked, and more Main Streets
boarded up and closed down—just like it was before I took over the presidency 4
years ago. I then set record low unemployment, with 160 million people
working.
This tax hike is a classic globalist betrayal
by Joe Biden and his friends: the lobbyists will win, the special interests
will win, China will win, the Washington politicians and government bureaucrats
will win—but hardworking American families will lose.
Joe Biden’s cruel and heartless attack on the
American Dream must never be allowed to become Federal law. Just like our
southern border went from best to worst, and is now in shambles, our economy
will be destroyed!
