Thursday, April 01, 2021

Biden's tax plan is a bad new deal

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

President Joe Biden delivers a speech on infrastructure spending Wednesday, March 31, 2021, at Carpenters Pittsburgh Training Center in Pittsburgh. Evan Vucci / AP

(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 |

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!