ROOKE: Biden’s New Tax Plan Would Be Another Gut Punch For American Workers

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Mary Rooke Commentary and Analysis Writer
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President Joe Biden unveiled his new budget proposal with several Democrat wish-list items, including his 2021 campaign promise to increase the corporate tax rate to a whopping 28%. This increase would make American corporations pay one of the highest rates among other nations in direct economic competition and undoubtedly burden the American worker.

Biden’s 2021 promise to cancel the Trump-era tax cuts for corporations (set to expire in Dec. 2024) has been largely blocked by the GOP-held U.S. House of Representatives. However, Biden included them in the new budget proposal in hopes they’ll now be implemented.

While Biden claims the new tax rate is only to raise much-needed revenue and ensure corporations pay their fair share, economists have long predicted that an increased corporate tax would be paid through hardships on the American worker and consumer.

Alex Durante is an economist working on federal tax policy and model development at the independent tax policy nonprofit Tax Foundation. He studied the effects of raising corporations’ taxes globally. He surmised in 2021 that the Biden Administration should be doing just about anything else to increase revenues because this will only hurt financially vulnerable Americans.

“Low-income households were disproportionately impacted by the economic downturn due to the pandemic. As the economy continues to rebound, legislators should be wary of policies that could further harm this group,” Durante wrote. “Instead of increasing corporate taxes, they should consider other options to raise revenue and make the tax code more progressive.”

Durante’s summary for the Tax Foundation of a 20-year-long study on rising corporation rates in German municipalities found that “slightly more than half of the corporate tax burden falls on workers.” (ROOKE: Rich MSNBC Liberals Are Laughing Their Way To Their Worst Nightmare)

“Higher corporate taxes reduced wages the most for low-skilled, women, and young workers,” he wrote. “While many policymakers view corporate taxation as a form of progressive taxation, the authors show that accounting for these estimates of tax incidence would reduce the progressivity of the U.S. tax system between 25 and 40 percent.”

Durante believes Biden’s new tax plan breaks his promise not to raise taxes on couples earning more than $400,000 annually.

“The administration’s corporate tax proposals would likely violate that pledge, given that corporations are comprised of people who also might earn less than $400,000,” Durante said. “The economic evidence suggests that in the long run, workers and consumers, rather than shareholders, bear a sizable share of the corporate tax burden.”

The Heritage Foundation’s 2021 review of Biden’s plan also found that American workers will shoulder the burden of the increased tax rate. “Labor bears between 75 percent and 100 percent of the cost of the corporate tax. The corporate tax is a tax on American workers,” the organization stated.

This would not only affect worker’s wages but also decrease American corporations’ competitiveness internationally by making the tax rate for U.S. corporations the highest among its global competitors, according to Heritage.

“That increase would make the U.S. far less desirable as a destination for investment and job growth, threatening America’s global competitiveness and slowing down the crucial economic recovery. It would make U.S.-based corporations takeover targets and increase inversions to move headquarters out of the United States. All this means fewer jobs, lower wages, and less opportunity for American workers,” the organization warned. (ROOKE: The 2024 Election Is Set: Insult Comic Vs. Feeble Old Man)

Of course, Biden’s proposal to raise the corporate tax rate would affect workers more than major corporations. It doesn’t take an economist to understand this thought. Before former President Trump dropped the corporate tax rate from 35% to 21%, adults employed in the U.S. economy knew how it felt to have the proverbial corporate boot off their necks.

Under Trump, real wages went up, the economy was booming, and after decades of depression, families finally had breathing room to get ahead. Biden’s economy feels like a chokehold on the average American, and his new plan will only make this worse.