- - Thursday, March 25, 2021

President Biden may have promised middle-class Americans that he wouldn’t raise their taxes, but he didn’t say he wouldn’t boost their costs. In an interconnected society, higher taxes on the wealthy and corporate America radiate outward like ripples on a pond, eventually reaching every wallet. With four years to work its productivity-punishing mischief, Taxageddon is approaching.

No Americans earning less than $400,000 a year would pay “one single penny in additional federal tax,” Mr. Biden told ABC’s George Stephanopoulos last week. The White House subsequently issued a caveat: The president was referring to families, not individuals. A family in which two earners making $200,000 each would be on the hook for a tax increase from the current 37% to the top rate of 39.6%. All else being equal, their tax bill add up to thousands more.

Mr. Biden intends to raise the tax rate on corporations as well, from the 21% that predecessor Donald Trump orchestrated up to 28%. Such a move would come with serious consequences for working Americans. As corporate taxes rise, employment and wages fall, according to the Tax Foundation.

It’s common sense that higher taxes force corporations to try to save money by reducing their workforce costs. Americans employed during the Great Recession that the Obama administration mismanaged with stiff corporate rates can recall the grinding challenge of heavier workloads as colleagues were pink-slipped.

Onerous taxes send corporate income fleeing overseas as companies establish headquarters in nations with less-onerous rates. The Obama-era phenomenon largely ended during the Trump administration, but it could rekindle under Obama 2.0 — aka Team Biden.



Perhaps most maddening, Mr. Biden‘s Democratic congressional allies secreted a tax provision into their American Rescue Plan that reaches down to the state level. It prohibits states receiving shares of $350 billion in federal relief from cutting taxes for four years. The measure, according to Americans for Tax Reform, is meant to prevent low-tax states from expanding their economic advantage over high-tax, mostly Democrat-run states in the aftermath of the coronavirus pandemic.

In response, 21 Republican state attorneys general threatened legal action, contending in a letter to Treasury Secretary Janet Yellen last week that attaching conditions to the use of the federal money would override state tax authority and “amount to an unprecedented and unconstitutional intrusion on the separate sovereignty of the states.” Ohio followed through immediately and sued Mr. Biden.

Like a hound hunting a fox, the president’s Democratic allies are chasing a $15 minimum wage. Though it was stripped from the $1.9 trillion coronavirus relief package, Rep. Ro Khanna of California is attempting to force the measure through Congress by attaching it to critically important defense authorization or government funding bills. No matter that it would kill an estimated 1.4 million jobs, according to the Congressional Budget Office.

Only the hopelessly naive could be surprised that Taxageddon has arrived. It’s what Democrats do.

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