Joe’s tricky tax trick
God bless entities like the Tax Foundation, a nonprofit dedicated to supporting informed tax policy at all levels. Its analysis of changes to our tax structure that the Democrats embedded in its Build Back Better bill brings splendid clarity to the tables where policy is and will be discussed, formulated, and enacted.
Not surprisingly, statements from this Administration and its supporters fail the truth test miserably. Their claim that a $3.5 trillion bill will never come due and not add a cent to our national deficit? Hard for anyone of even third-grade intelligence to concur.
The Tax Foundation has a different, more pragmatic, take: “Excluding tax revenue from increased tax compliance, the proposals would raise $862 billion over ten years.” That doesn’t quite stretch to cover the overall cost, including the unrealized tax revenue due to increased tax credits. The Tax Foundation’s analysis also yields this disturbing result:
We estimate that the Ways and Means tax proposals would reduce long-run economic output by 0.98 percent and eliminate 303,000 full-time equivalent jobs in the United States. It would also reduce after-tax incomes for the top 80 percent of taxpayers over the long-run.
So just about everyone who pays taxes, not only those with incomes exceeding $400,000, would take home less for their efforts under this bill. And so much of this bill is dedicated to consumable, rather than durable, results. Until very recently, durability was a defining hallmark of infrastructure. Bridges last for 100 years. Childcare, in contrast, lasts until the end of the day. Bridges must be designed to support predicted traffic and use. There are loads of requirements to provide childcare throughout the bill, but I haven’t found any provision requiring participants in the various childcare programs to earn that service by achieving a minimal level of success.
Anyway, it looks as though this bill will undergo major rewrites before it is voted on, if ever. So, we’ve got at least a temporary break from the built-in tax creep brought to us by the Creep-in-Chief.
For more than a year, Joe has been saying variously either that under his Administration those making less than $400,000 will have no new taxes assessed or that their current taxes will not go up. Well, prepare to be amazed!
Even without this new tax legislation, the poor already are suffering from increased taxes. Such a tricky tax trick, built into everything Joe has done since January 20. He’s obviously capable of comprehensive destruction, but not of building any reliable political or economic structure, nor of taking us back to happier times, nor of bettering We the People’s lives.
Inflation brought about by Joe’s evil dealings with so many sectors, as well as increased lefty pandemic mandates crushing initiative, education, and commerce, have been discussed elsewhere. All I can say is that the pig feed I buy at the feed store has increased in price nearly 18% since the spring. Thus, the sales taxes I pay for every 50 pounds of grain has increased 18% also. Joe increased my tax burden.
Inflation, stagnation, and economic disruption mean that those who routinely shop at the Dollar Store are facing a change that will see them shopping at the buck-and-a-half store. They are mostly the poor. Their taxes will go up as the prices go up. Joe built this.
Fortunately, most federal and state excise taxes (covering most sin taxes like those for alcohol and tobacco products) are based upon amount, not cost, of goods purchased. We should be glad that this rule of thumb applies to fuel taxes.
Clothing, holiday wrapping paper, household goods and, in a few states, food are taxed based on the purchase price. Those on limited budgets will be able to purchase less of this due to inflation’s impact on price, as well as the assessed taxes. Joe is building a more impoverished populace, a diminished and less robust commercial sector, and a disheartened electorate. Republicans must pound this message home and give this administration a daily beat-down from now until November 2022. It’s the very least Joe’s minions deserve.
Anony Mee is a retired public servant.
Image: A cartoon from 1862: “The home of the American citizen after the tax bill has passed: ‘Scroggs says he is ready and willing to pay any amount of tax, but he would like them to leave his wife's crinoline and other domestic trifles alone.’” Library of Congress.
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