Fox News’ Bill Hemmer pushed back against White House economic adviser Jared Bernstein, who said Thursday that raising taxes is a “good idea.”
Bernstein said imposing a 15% minimum tax on large corporations, which has been included in a last-minute tax deal between Senate Majority Leader Chuck Schumer and Democratic West Virginia Sen. Joe Manchin, is necessary to help the economy.
“It’s my professional opinion that the highly progressive tax proposal in this bill are very much needed,” the economic adviser said. “One of the things that didn’t come out in the conversation I heard earlier here as I was standing here roasting in the sun, was the fact that the minimum tax that is in this bill on corporations — a 15% book minimum tax — only hits corporations above a billion dollars in profits. And 15% is well below the corporate tax rate of 21%. That is a fairness issue, it is an issue that helps us with this problem.”
“But you know any company that is trying to protect their market cap and they’re trying to protect every quarter they report to stockholders, they’re going to either cut jobs or pass that tax onto consumers that they are doing business with,” Hemmer said. “That’s the reality in American economics.” (RELATED: Economist Dismantles Biden Admin’s Attempt To Redefine Recession With One Chart)
The adviser said the taxes do not hit anyone making under $400,000 a year and will help ease inflation by cutting the budget deficit.
“I’m not talking about the government, I’m talking about it being passed on by the companies,” Hemmer said.
“Let me finish. If you look at the record of how tax increases like this play out, not only do they not hurt jobs or investment when you’re targeting the very top of the income scale, but they will do something that’s very important to President Biden and to Senator Manchin as well,” Bernstein said. “They will further reduce the budget deficit, that is disinflationary in this environment. So yes, we think this is a very good idea.”
The tax proposal includes only two out of the 40 tax proposals considered by Democrats, which include the 15% minimum corporate tax, Politico reported. It also seeks to close the “carried interest loophole,” through which hedge funds and private equity firms can treat some of their earnings as capital gains rather than paying a high rate in income taxes, according to the outlet.
Hemmer said a report found spending trends among lower-income Americans are on a “downward slide” due to inflation. Bernstein said while this is a challenge, the job market is providing opportunities for lower-paid workers.
“They’re actually beating inflation,” Bernstein said. “They’ve been growing at double digit rates and that’s helpful to low paid workers. We have to do more to help them with these inflationary pressures. Now when you’re talking about a gas price that’s down about 74-5 cents a gallon, that’s obviously more important as a share of income to those lower income consumers. But they are very much in the minds of our policymaking when we’re trying to really help them save costs.”
The Bureau of Economic Analysis reported Thursday morning that the U.S. economy shrank for the second consecutive quarter, with the country’s real gross domestic product (GDP) decreasing at an annual rate of 0.9% in the second quarter of 2022. By some standards, that back-to-back GDP shrinkage signals the economy is entering a recession, though President Joe Biden’s administration has pushed back on the claims that the nation is in a recession.