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Economy

Dem’s $3 Trillion Tax Hike Hurts Working Families and Small Businesses

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Tax

The Democrats’ almost $3 trillion tax increase proposal would deeply impact small businesses and working families. “This is the largest tax increase since 1968 compared to the size of the economy and the largest tax increase ever in nominal dollars” reports the Americans for Tax Reform website.

“Raising taxes on working families by increasing the federal corporate income tax rate from 21 percent to 26.5 percent” will be passed along to working families in the form of “higher prices, fewer jobs, and lower wages.”

As a result, the U.S. will have a combined state-federal rate of 30.9 percent. That rate is “higher than our foreign competitors including China, which has a 25 percent corporate tax rate, and Europe which has an average rate of 21.7 percent. The developed world average (OECD) is 23.5%” reports the website.

The Tax Foundation’s Stephen Entin states a tremendous 70 percent of corporate income tax is a burden to “labor (or workers)” in the form of wages and employment. In a 2020 study, the National Bureau of Economic Research found that 31 percent of the burden falls on consumers.

“A corporate tax increase will threaten the life savings of families by reducing the value of publicly traded stocks in brokerage accounts or in 401(k)s” as well as “higher utility bills as the country tries to recover from the pandemic.”

Small businesses will be impacted because “raising the top income tax rate to 39.6 percent, limiting the 20 percent small business deduction, expanding the Obamacare net investment income tax, limiting the ability of passthroughs to deduct excess business losses, and raising the corporate tax rate.”

The painful plan also increases the capital gains tax rate to 28.8 percent, adds a 16.5 percent global minimum tax, and increases the death tax by cutting the exemption level in half. Not to mention, $80 billion in new IRS funding would allow for the hiring of 87,000 new agents. “This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice.”

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2 Comments

2 Comments

  1. BlueBoomerang

    September 16, 2021 at 9:46 am

    Biden wants to pay for his social engineering programs by taxing all wage earners in the form of higher prices, which we’re already seeing as well as higher income taxes. The country is embracing socialism and is being run by a demented, senile, mindless puppet controlled by the extreme left.

  2. John Poelstra

    September 17, 2021 at 10:10 am

    A Convention of States is the only solution big enough for this problem.

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Economy

Inflation Spiked 7% Past Year, Highest Since 1982

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With a 7% spike from last year, inflation has increased at its fastest pace in 40 years. On Wednesday, the labor department reported its measure of inflation “that excludes volatile food and gas prices jumped 5.5% in December, the fastest such increase since 1991. Inflation rose 0.5% overall from November, down from 0.8% the previous month” reports the Associated Press.

National Review reports “the consumer price index, a major inflation gauge, for all items surged 0.5 percent for the month and 7.0 percent for the last twelve months ending in December, representing the largest annual spike since June 1982, when inflation hit 7.1 percent.”

Housing prices and used cars and trucks contributed the most weight to the all items surge. But prices for cars, gas, food and furniture all rose sharply as part of a rapid recovery from the pandemic recession, “that was fueled by vast infusions of government aid and emergency intervention by the Fed, which slashed interest rates.”

Federal Reserve Chair Jerome Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs Tuesday, warning monetary policy is constrained in its power to curb inflation by the current “era of persistently low interest rates.” Ordinarily, the Fed can hike rates to slow down an overheating economy.

“Recovering from the pandemic, the economy has rebounded well but a bit too fast for many moving parts to catch up to, Powell noted, as supply chains still struggle to meet demand across consumer sectors, resulting in inventory shortages on store shelves and prolonged shipping delays” reports National Review.

“The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation. We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation,” said Powell.

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Economy

Federal Debt Equals Roughly $287,859 Per Income-Tax-Paying Household

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National Debt Clock
National Debt Clock

The Biden administration wants to increase any taxes they can get their grubby hands-on, and CNS News explains why: because they need it. In an analysis, CNS writes about how as Congress “worked in recent days to increase the legal limit on the federal debt, the Treasury kept that debt artificially frozen at approximately $28.9 trillion, where it stood at the beginning of this week.”

With the limit lifted, the federal debt will increase, “then keep steadily climbing, constantly increasing the burden on future taxpayers.” Here’s the analysis:

In 2018, according to the last complete annual report on individual income tax returns published by the Internal Revenue Service, there were 100,424,240 households in the United States that filed what the IRS calls a “taxable return.” “The taxable and nontaxable classification of a return for this report is determined by the presence of ‘total income tax,'” explained the IRS.

“‘Total income tax,'” it said, “was the sum of income tax after credits.”

In other words, the 100,424,240 households that filed a “taxable return” in 2018 actually paid income taxes to the federal government.

If you divide the $28,908,004,857,445 in debt that the federal government owed before the debt limit was liftedby the 100,424,240 American households that paid net income taxes in 2018, it works out to approximately $287,859 per income-tax-paying household.

In order to understand the magnitude of what this means, CNS compares numbers to 1989:

The year that President Ronald Reagan left office, there were 89,178,355 income-tax-paying households in the United States, according to the IRS. At the end of January that year, the federal debt was $2,697,957,000,000.

That means the federal debt then equaled approximately $30,253 per income-tax-paying household.

Even when the January 1989 federal debt of $30,253 per income-tax-paying household is adjusted into November 2021 dollars (using the Bureau of Labor Statistics inflation calculator), it equals only approximately $69,437.

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