Biden's Tax Hike - Let the Economy Be Damned

Biden's Attack on Business - BEWARE

   Maria Bartiromo details the disaster Biden is unleashing....

Biden's Tax Hike - Let the Economy Be Damned

 We're just going to rip off the Band-Aid: President Biden is aiming to raise taxes sooner rather than later, according to a new Bloomberg report. 

What can you expect? For individuals...

• Bumping the income tax to 39.6% for those earning $400,000+  
• Taxing capital gains like normal income if you earn $1+ million
• Increasing estate taxes to 45% for assets worth $1+ million

So, if you still clip coupons, don't expect any changes. These increases largely follow Biden's campaign proposals to only tax high-earners.

What about businesses?

The headline proposal is raising the corporate rate to 28%. Biden may also get rid of preferential tax treatment for "pass-through businesses" like LLCs and increase incentives to avoid offshoring. 

When Trump slashed the corporate rate to 21% in 2017, he wasn't the first to bat for business interests. From 2000–2018, 76 countries reduced their corporate rates to attract investment; now, the average rate is ~24%. Treasury Sec. Janet Yellen wants to stop that "race to the bottom," which some economists say has only benefited large companies, so she's working with allies on establishing a global minimum tax for multinationals. 

• UC Berkeley economists estimate 40% of profits earned by multinational firms (or $700+ billion) were located in tax havens in 2017. 

Critics argue this plan puts companies at risk for double taxation. And the Tax Foundation estimates that some of the proposed changes to corporate taxes would reduce US GDP by 0.8% and wages by 0.7% in the long run. 

So why do they want to do this? 

Given that the last major tax hike happened in 1993, it's not an easy play for hearts and votes. And groups with lots of money at stake are sure to lobby against the plan.

But after funding his ambitious $1.9 trillion Covid package largely with government debt, Biden needs something more sustainable for the even more ambitious infrastructure package he's eyeing, which could run anywhere from $2–$4 trillion.