Democrats denounce fuel tax suspension
On the campaign trail in 2008, Obama said of the tax suspension, “We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something. Well, let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election.”
House Speaker Nancy Pelosi (D., Calif.) in April said gas tax holidays are “good PR,” but shared the concern that there is “no guarantee that the reduction in the federal tax would be passed on to the consumer.”
Rep. Peter DeFazio, (D., Ore.), the chairman of the House Transportation and Infrastructure Committee, agreed.
“Suspending the 18.4 cents per gallon federal gas tax is not going to give consumers significant relief—if any at all,” DeFazio said in February, adding that the move may have negative effects. “Suspending the tax will blow a $26 billion hole in the highway trust fund this year and cause further delay in rebuilding our decrepit infrastructure and the tens of thousands of jobs that investment would have provided.”
Sen. Joe Manchin (D., W.Va.) also foresees road blocks for infrastructure projects. He said the suspension “just doesn’t make sense,” adding, “People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away.”
The Free Beacon reported Monday that Biden is the least popular president in more than a century. Democrats are on the fence about his viability for a second term and bracing for a tumultuous midterm season.
The president's plan to forgive $10,000 in student debt per borrower has several negative consequences.
Last week, The Washington Post reported that the president’s plan, which sources say is nearing a formal announcement, will resemble his 2020 campaign promise to forgive $10,000 in federal student loans per borrower. The Committee for a Responsible Budget estimates this will cost taxpayers $230 billion.
While political firebrands such as Sen. Bernie Sanders have long supported substantially increasing federal higher education spending, including offering things like free college, President Biden’s proposal would represent a significant change in policy from previous presidential administrations, including Democrats.
President Barack Obama’s 2008 campaign promises were modest by comparison. President Obama sought to expand Pell Grant access to low-income students and eliminate government subsidies to private student lenders. Even Obama’s 2014 executive order that sought to forgive some federal student loans only did so after 20 years and required borrowers to make regular payments via the Pay As You Earn Initiative.
By comparison, the Biden administration’s plan is a major departure from Obama’s more modest and measured approach to student debt. While it would certainly be popular with many of the people who have $10,000 of their student debt forgiven, public opinion is quite divided over how to handle college student debt.
A CNBC national poll conducted in January of 2022 found that 34% of respondents supported loan forgiveness for all student loans. Only 27% of respondents opposed student loan forgiveness entirely. However, 35% of respondents supported a middling approach, preferring loan forgiveness only for those “in need.”
Supporters of student loan forgiveness for those in need may be pleased to hear that President Biden’s proposal is reportedly going to be means-tested, with individuals eligible for student loan forgiveness if they have an income of less than $150,000 ($300,000 for couples).
The Washington Post editorial board notes some of the problems with that cut-off:
These provisions, while welcome, would not stop the policy from becoming yet another taxpayer-funded subsidy for the upper middle class. The president’s means test would be almost useless, as some 97 percent of borrowers would still qualify for forgiveness. The Committee for a Responsible Federal Budget, a nonpartisan watchdog, estimates that such a plan would cost at least $230 billion, that 71 percent of the benefits would flow to those in the top half of the income scale — and that a quarter of the benefits would go to the top 20 percent. Even this does not express fully how regressive the policy would be, because many recent graduates from medical, law and business schools would qualify for forgiveness even though their lifetime income trajectories don’t justify it.
Similarly, The Wall Street Journal has reported that more than 40% of all student loan debt is held by individuals with advanced and lucrative degrees, such as doctors and lawyers.
Only one-third of Americans have bachelor’s degrees. These individuals are statistically likely to earn more than the two-thirds of Americans who don’t have those credentials.
This means that many taxpayers nationwide, 85% of whom do not have student loan debt, would now be paying off the student debt of their college-educated peers who, in many cases, enjoy greater affluence because of their college degrees.
Importantly, this loan forgiveness proposal does not actually address the major problem of rising college costs. Biden’s plan would likely only exacerbate what many have labeled the student debt crisis.
“Economically rational people will respond to that dynamic by choosing more expensive programs of study and borrowing more than they would have otherwise. The result: a pool of outstanding student debt growing even more quickly than before.”
This means that Biden’s proposal would incentivize future students to invest in riskier loans under the hope or assumption that their loans could later be forgiven. Such a plan is a disaster in the making that, over the long-term, could significantly expand Americans’ already ballooning student loan debt.
In fact, even if President Biden does reduce student loan debt by $10,000 per borrower, the Committee for a Responsible Budget reported that the total student loan debt would return to its current level in just three years, assuming no change in borrower behavior.
Instead of debt reduction, policymakers should consider reforms that have a lasting effect and address the rising cost of college. Extricating the federal government from the student loan business altogether or placing strict annual and lifetime caps on federal student loans could help encourage universities to stop hiking their costs.
At the end of the day, any sort of student loan forgiveness is a bad policy since it does not hold individuals accountable for their financial decisions. In fact, it would represent a massive betrayal of public trust. Many people worked to pay off their student loans. Others chose less expensive colleges to avoid student debt. Some people didn’t go to college at all because they decided they couldn’t afford it.
It may be well-intentioned, but President Biden’s student loan forgiveness plan is a recipe for disaster. It would potentially encourage bad borrowing behavior going forward. It would disadvantage those who made significant sacrifices to avoid or minimize their student debt. And, perhaps worst of all, it would force American taxpayers who didn’t go to college to pay for student debt they chose to not accrue and from which they will not benefit.
Republicans call new perks "disgusting" and "out of touch."
House Speaker Nancy Pelosi belatedly jumped into America’s baby formula crisis on Friday, calling nationwide shortages “unconscionable” and setting an emergency vote next week. But while she tried to get Democrats caught up on a crisis that caught them by surprise, her administrative office was busy ramping up new perks for lawmakers.
House members were alerted to two new perks this week compliments of the chamber’s Democrat leadership: fully paid memberships to Peloton gyms as well as a brand new liquor and drinks outlet.
Republicans immediately seized on the optics, saying doling out additional benefits to lawmakers when everyday Americans are struggling to fill gas tanks, grocery carts or baby bottles was a bridge too far, even for Washington.
“Washington Dems couldn’t be more out of touch,” Rep. Drew Ferguson (R-Ga.) wrote as he tweeted out a new announcement by the House Chief Administrative Officer announcing a new “House Drinks storefront” in the Rayburn House Office Building where lawmakers and staff can buy beverages, wine and liquor.
“Whether you’re hosting a meeting or an office event or just want to stock up on your favorite drinks, House Drinks sells water, soda, juice, alcohol and spirits,” the announcement boasted. “Six, twelve and 24-packs are available depending on the drink.”
Ferguson, a member of the powerful purse-strings-controlling Ways and Means Committee, sent out his tweet with the hashtag “FirePelosi” and noted “your tax dollars can be used for purchases.”
“Americans can’t afford to buy groceries or put gas in their cars, and Nancy Pelosi decides now is a good time to open a congressional liquor store on Capitol Hill,” he added.
Meanwhile, multiple members of Congress confirmed to Just the News that the Chief Administrative Officer has also decided to provide all lawmakers, staff and Capitol Police officers with free VIP memberships to Peloton gyms.
An email obtained by Fox Business said the “premier employee benefit” will provide employees with both Peloton All-Access and a Peloton App membership at no monthly cost. The network said the deal involved a $10,000 upfront payment and $10 per month per staffer who used the perk.
Peloton confirmed to Fox Business that the “the US House of Representatives is extending Peloton Corporate Wellness to all House staff and Capitol police.”
The new perks follow other benefits Congress has received — and in some cases abused — over the years, like a post office, a bank, and fat pensions. And they come after Pelosi has faced murmurs about multiple instances of being out of touch, including when she boasted about her expensive freezer filled with ice cream during the pandemic, a move some progressives claimed hurt Democrat election chances.
The gym deal resonated all the way to the campaign trail, where Tennessee House candidate Robby Starbuck decried Washington’s tone deafness.
“Moms and Dads are going to 8 stores looking for baby formula while paying for gas they can barely afford but at least the Democrats are using our tax dollars to do Peloton,” Starbuck tweeted. “Disgusting.”
Billions of dollars in taxpayer funds intended to keep schools open during the COVID-19 pandemic will instead be used to push Critical Race Theory on children.
$122 billion from President Joe Biden’s “American Rescue Plan” is slated for the Elementary and Secondary School Emergency Relief Fund. Under the law, those funds are supposed “to help safely reopen and sustain the same operation of schools and address the impact of the coronavirus pandemic on the Nation’s students.”
Fox News reports schools in some states plan to instead spend those funds on “implicit bias” and “anti-racism” training, which teaches children that all white people are racist and global socialism is the only hope for racial reconciliation.
Fox News reports:
Applications were due on June 7, 2021, and at least $46.5 billion from the ARP ESSER fund has been allocated to 13 states, including California, New York and Illinois, that are planning to use the funds to implement CRT in their schools.
The California Department of Education was awarded $15.1 billion in ARP ESSER funding to implement its schools reopening plan, which included $1.5 billion for training resources for school staff regarding “high-need topics,” like “implicit bias training.”
The California DoE used funds to “increase educator training and resources” in subjects such as “anti-bias strategies,” “environmental literacy,” “ethnic studies,” and “LGBTQ+ cultural competency,” according to the plan.
[Secretary of Education] Cardona said in November 2021 that he was “excited” to approve California’s plan, and that it laid the “groundwork for the ways in which an unprecedented infusion of federal resources will be used to address the urgent needs of America’s children and build back better.”
The U.S. Department of Education claims the political re-education classes are necessary to “meet student and educators’ social, emotional, and mental health needs” and are part of a larger government-driven “culture shift” to ensure schools “reopen equitably for all students.”
One wonders what the Democrats in charge of the party’s economic program are thinking—if they indeed think at all. Their proposals are frighteningly similar year after year, decade after decade and now century after century.
The truth is that their objective is not fairness so much as it is to punish the successful. As it is, because honesty and other important virtues got tossed out the window long ago, the public continues in ignorance, counseled by fools and pretenders who explain their troubles away as being someone else’s fault.
Democrats’ worldview does not include certain proven realities, such as the fact that higher tax rates on income do not necessarily raise more revenue than lower ones. Each time the federal government has enacted major rate cuts, revenues increased because the corresponding increase in activity caused the economy to grow, as happened under Presidents Harding, Kennedy and Reagan.
It also happened under Trump. According to the Congressional Budget Office, the 21 percent corporate income tax generated revenues of $372 billion in 2021—nearly as much, the Wall Street Journal recently observed, as the CBO projected would come in at the previous rate of 35 percent.
Somehow, today’s Democratic Party leaders missed all that. When you recall that people used to refer to them as the party of “sound money,” the shift is comical. Consider Senate Majority Leader Chuck Schumer‘s latest gambit to reduce energy prices—which spiked after the Biden administration attacked the production of energy from domestic sources—by raising energy taxes.
“A wide array of Democrats, including Sens. Maria Cantwell (Wash.), Ron Wyden (Ore.), Elizabeth Warren (Mass.), and Tammy Baldwin (Wis.), are now finalizing measures that would impose steep fines for abuse, crack down on corporate consolidation or set up new taxes on oil and gas companies’ profit windfalls,” The Washington Post recently reported, without bothering to explain how making energy more expensive (which is what more taxes on energy will do) will bring the price down.
Up is up and down is down unless someone convinces you somehow that two plus two equals five.
The problem of economic mismanagement isn’t confined to Washington. Some politicians believe subsidies are forever. In Kentucky, Democratic governor Andy Beshear vetoed legislation bringing the COVID state of emergency to an end—not because the disease remained a threat, but because he wanted to preserve the flow of relief money to fight the sudden reappearance of inflation by distributing it to folks who are most severely affected. These same people are probably more likely to vote for him when he runs for reelection than those who can better manage the rise in the price of essentials occurring on Joe Biden‘s watch, but Beshear almost certainly never gave that a moment’s thought.
The latest gambit, also backed by Schumer, is the Biden plan to tax unrealized capital gains. As the Democrats see it, when the value of an asset—such as stock shares, real estate holdings or artwork—increases, the owner should have to pay a tax on its newly assessed value. Why that won’t work, at least in economic terms, is that the owner of an unsold asset realizes no actual “gain.” That makes the proposal a wealth tax, which is constitutionally dubious.
Those who understand economics, and believe the government should preserve value rather than loot the stores of the successful, have argued in response that real fairness would lead to the indexation of the value of capital assets to take inflation into account. Without indexation, as data from the Committee to Unleash Prosperity created by Dr. Arthur Laffer show, “the effect of high and persistent inflation in the 1970s pushed the tax rate on REAL gains to 100 percent or more. In other words, investors paid a tax on real capital losses.”
Inflation, which occurs most often because of government mismanaging the economy, destroys the real value of assets even if their price appears to go up. Taxing the apparent appreciation of those assets without considering whether their real value has gone down is confiscatory.
Therein, as Shakespeare wrote, lies the rub. Republicans see tax policy as a tool useful for producing economic growth—which is a good thing. Jobs are created, wages rise, gains in productivity are achieved and living standards improve. Unfortunately for us all, including the disadvantaged, that’s not how progressives see them.READ MORE
To progressives, taxes are a way to redistribute income and punish the successful. The concept of progressive taxation is based on the idea that equalization of outcomes is a good thing. Somehow though, year over year, decade over decade and century over century it never happens.
When the economy doesn’t grow, the rich generally manage to stay rich or get richer while the poor get poorer. Nevertheless, progressives continue to promote these policies as they have since before the creation of the income tax under Woodrow Wilson. That’s because, as historian Ryan Walters writes in his new book on President Warren G. Harding, “The idea of a national income tax had always excited those who wanted to expand the size and scope of government.”
Such proposals, Walters writes, bring inherent danger. “When men once get in the habit of helping themselves to the property of others, they are not easily cured of it,” The New York Times once wrote during the debate over the income tax amendment, according to Walters. The great grey lady of American journalism was, that time at least, absolutely right.
President Joe Biden’s plan to build America back better is much more costly than most everyone anticipated. The budget reconciliation bill currently stuck in the House is perhaps the most expensive single piece of legislation in history. Even a few members of his own party are uncomfortable voting for it.
According to some estimates, the new taxes, spending, and borrowing involved total out at about $10 trillion over 10 years. At one-half U.S. annual GDP pre-COVID, that’s not chump change. Biden says not to worry because it’s paid for, something only someone who’d spent 50 years in Washington could say with a straight face. He’s unfamiliar with how the private economy functions. The higher corporate taxes he touts, for example, are considered a cost of doing business that is mostly passed along to the consumer.
It’s not his fault he doesn’t get it. He’s spent almost his entire adult life in politics. Any wealth he’s amassed comes from belonging to “the aristocracy of pull,” not business acumen. The people around him, however, know better.
Raising taxes on personal incomes over $400,000 a year, raising the corporate tax rate, and establishing a global corporate minimum tax won’t raise the revenue needed to cover the cost of the plan Biden is trying to sell to the American people, not to mention holdouts in his own party like West Virginia’s Joe Manchin. The big spenders know other sources of revenue will need to be tapped, if not now then later. That makes anything not taxed currently fair game, which puts changes in the private individual retirement account system on the table.
Most IRAs are treated favorably in the tax code. Either the funds are taxed when they are invested and withdrawals are made tax-free or investments are tax-free and, after the accounts have increased in value over time because of the magic of compound interest, the funds are taxed when they’re drawn down. Changing that will have downstream impacts especially harmful to investors in the middle-class.
It won’t punish the rich. It will hit the new investor class, especially the millennials entering the workforce, hard. What’s on the table limits investment options while subjecting the income they set aside for retirement to retroactive taxation. “It’s like a fisherman’s net,” IRA expert Ed Slott said. “The net picks up a lot of small fish that are unintended targets.”
This proposal to eliminate Roth 401K Conversions for IRAs and employer-sponsored plans for single filers making $400,000 or more and joint filers making $450,000 or more is bad policy and bad politics. What the Bidenites are proposing would be devastating to retirement incomes and should be anathema to senators from states with large retirement populations like Mark Kelly and Kyrsten Sinema in Arizona and Nevada’s Catherine Cortez Masto. These ideas and the proposed ban on the conversion of after-tax contributions to Roth account regardless of income would likely wreck the retirement plans of millions of average Americans.
Moreover, the ideas are absurd from a revenue perspective. According to early estimates, the changes under consideration would only raise $4 billion over the next 10 years. That’s not even a drop in the bucket of what’s needed to pay for the Biden plan. Does that mean future changes that are even more radical? Probably. Once we’re down that road it will be hard to stop even if it hurts Baby Boomers and Millennials alike.
Attempting to limit the amount people can put into Roth IRAs will reduce the national savings rate, complicate retirement planning for millions of Americans, and constitute another broken promise by the politicians in Washington. Some folks have indeed used these accounts as a tax dodge, setting up as many as they need to reduce their annual tax burden, but you don’t use a howitzer to kill a housefly.
For most Americans, IRAs are a pathway to a comfortable, secure, perhaps even prosperous retirement. The proposals currently under consideration to eliminate the Mega Roth and other independent retirement account options are an attack on the middle class that Congress should reject.
If it doesn’t, the voters will remember.
The Republicans on the House Ways and Means Committee took another whack Thursday at a Biden Administration proposal to force banks to report to the IRS on their account holders’ private annual aggregate financial activity.
The administration has repeatedly pushed back against its critics who claim the initiative will lead to banks reporting individual transactions to the IRS. Opponents of the initiative say that no matter where the threshold for reporting is $600 as originally put forward or $10,000 as it is now, the reporting of aggregate data will still act as a trigger for more audits.
Experts in tax policy say that even at the $10,000 level, most Americans could still expect to have their private information turned over to the IRS. What the Biden Administration wants targets people who are not payroll wage earners, meaning tradesmen and women, independent contractors, farmers, and others who do not get paid a set wage every two weeks.
“Democrats’ IRS surveillance scheme is not about going after high earners and wealthy corporations, but instead is about going after working Americans and Main Street job creators — who Democrats assume are tax cheats,” the committee said in a release that also identified the top ten ways to get yourself surveilled by the IRS:
Despite the apparent levity of Thursday’s release, the issue remains serious. The government’s increasing desire to surveil private activity using the new technologies made available by Big Tech is worrisome. Privacy, as we have known it for most of our lives, may become outmoded yet there’s a practical side to this too.
The revenues needed to pay for Biden’s big government Socialist agenda aren’t there and the higher taxes included in the Bernie Biden budget resolution won’t generate them. under the current tax code. Remember, the latest analysis says the new spending and benefits included in their proposal is nearly twice as big as the $3.5 trillion over ten years is advertised as being. That’s a lot of money — and thinking you can find it by upping the number of audits is like saying it can be found between the couch cushions. The increased reporting to the IRS to trigger more audits exists primarily so the politicians who want to spend more money enlarging the welfare state can say it’s paid for. If instead, we fined politicians for telling lies, the budget would soon be balanced with plenty of money left over.
The Biden plan for building America back better has a pretty hefty price tag attached to it. It includes $3 trillion in new and higher taxes, more government regulation, and creates a framework through which Washington bureaucrats will be making essential decisions about which industries survive and which ones die as we move further into the new century.
All that’s bad, but that – as Senate Budget Committee Chairman Bernie Sanders has said about the $3.5 trillion in new programs and spending that will constitute the biggest growth in government since the Great Society under Lyndon Johnson – is only the beginning. The era of big government is back only this time it’s coming as big government socialism and, instead of embracing the free enterprise economy that made America great, Biden and company are taking their cues from the British Labour Party circa 1960.
Now, this is not the first time Biden has “borrowed” something from the Brits and it probably won’t be the last. What people fail to understand is how much more intrusive the government will have to be as we “build back better” to fund all these new programs and to make the American public go along whether they want to or not.
One proposal that stands out in this regard is the constant effort by the Biden Administration and congressional Democrats to secure more funding for the United States Internal Revenue Service. At one point, before it was stopped, a serious proposal was moving through Congress to add $80 billion to its budget so it could hire an additional 80,000 agents. This provision was scored as a revenue raiser, meaning those who were proposing it did so with the idea that more agents mean more audits and more audits mean more money because the IRS will catch more people cheating on their taxes.
For the moment the increase in funding for the IRS looks dead, so the Biden Administration is pushing to catch so-called tax cheats in other ways. Another idea still very much under consideration would require banks and other financial institutions to report business and personal transactions they conduct on your behalf to the IRS if they involved an amount greater than $600.
If that sounds like a gross, possibly unconstitutional invasion of privacy, you may be right – but you also may not be able to do anything about it. The government is routinely notified about transactions above $10,000 – a provision put in place during the so-called hot years of the war on drugs – setting a precedent that has been affirmed by the courts.
There’s something inherently sinister about the idea of your local banker being forced to report your account data to the IRS any time you write a check or send money by wire or over the Internet to bail a kid on spring break out of trouble or pay your mortgage or health insurance premium. Some things are none of the federal government’s business.
Under the initial Biden-backed proposal, the IRS would receive annual reports of account inflows and outflows of $600 or more, which may be less intrusive than a play-by-play, day-by-day account of how you spend your money but it’s no less disturbing. White House’s estimates have the policy when implemented generating about $463 billion in additional revenue over the next decade but, to some, that’s not the point of the exercise. Consider the letter sent to House Ways and Means Committee Chairman Richie Neal, D-Mass., by Treasury Secretary Janet Yellen and IRS Commissioner Chuck Rettig asking for support for the plan “to help the agency increase enforcement and recover more in uncollected taxes.” It’s language like that that signals there’s an increase in audits coming even if they don’t lead to an increase anything like the projected growth in federal revenue from them – as will likely be the case.
If it all sounds pernicious, it’s because it is. The policy is predicated on the presumption that most Americans – the working class and the small businessmen and women especially – are cheating on their taxes. That’s insulting, never mind that it ignores the presumption of innocence around which our judicial system (but not the federal tax courts) is organized. Making Tax Day an even bigger nightmare than it already is is not the way to, as the president puts it, “build back better.”
America has an infrastructure problem. Too many roads are impassible, traffic congestion is clogging the suburban arteries, and bridges are falling apart. The legislation currently pending in Congress, which the latest polls say has the support of two-thirds of likely voters, won’t fix it.
It’s been sold as an infrastructure bill but in the bizarro world that is Joe Biden’s Washington, it does more to get people and goods off the roads than on them. It’s full of so many goodies that progressives want it might fairly be called a down payment of sorts on the Green New Deal we were all led to believe during the last campaign the current president didn’t support.
One of the problems with the bill is how few people have taken the time to look at what’s in it. Ironically, that’s why it’s so popular. It’s “bi-partisan,” as though that makes it worthy of passage. Never forget that Democrats and Republicans can come together on bad ideas every more easily than they can on good ones. It’s a big-spending monstrosity that will give the American people more of what they don’t want and, more importantly, don’t need.
Consider the provisions dealing with local water systems in places like Flint, Michigan. Sure, it’s a problem and sure, it needs a major overhaul. But why is that Washington’s concern? It’s not as though their pipes move water to Cedar Rapids, Iowa, or Tuscaloosa, Alabama. it’s a local problem that local leaders are responsible for fixing but didn’t. Even after people started getting sick – and then they did a better job trying to pass the buck than they did addressing the problem.
The money for major cities like Flint is there so one part of the Democratic Party, the part in Washington, can bail out local Democrats and their political machines. It’s cash to help keep them in power so they can deliver the vote when the next election rolls around. And the one after that.
Maybe we could live with the political aspect of these projects (which might just as easily be called payoffs) if it weren’t for other things in the bill intended to fuel the efforts to get cars off the road. Efforts like the per vehicle per miles driven tax that some in Congress have in mind as an add-on to the federal excise tax on gasoline. Revenues are off, largely because of the number of people who’ve shifted to hybrid and all-electric vehicles. Something has to happen to get it back and make it grow. The best idea so far, and the most intrusive, is for the feds to mandate the installation of a device in your car or truck, or SUV to track how many miles you drive so the U.S. Department of Transportation can send you a quarterly bill. Or something like that. The whole idea is still in the pilot project stage, but you get the idea.
The invaluable David Ditch over at The Heritage Foundation, who deconstructed the bill down to its rocker panels, says among the lurking dangers hidden in the bill are measures that would “make a variety of progressive causes part of federal policy, such as an obsession with “equity,” providing special treatment for “disadvantaged” groups, establishing a new bureaucracy to increase the number of female truck drivers, and the hyper-woke Digital Equity Act, which includes expanding internet access for prisoners.” What any of that has to do with road construction and bridge building, which is what the American people think they are getting any time they hear the word “infrastructure,” is beyond me.
The bill also proposes expenditures in the tens of billions to subsidize the installation of electric vehicle charging stations needed by the people buying electric cars. That sounds progressive, in every sense of the word but, as most will likely be put in gated communities, yacht clubs, the parking garages of high-end urban condo and apartment complexes, and other places only the people who can afford to spend $100,000 on a single car can go, it’s really welfare for the people who don’t need it.
Worst of all, the so-called bi-partisan infrastructure bill is anti-car. Credit again to Ditch for doing the research and raising the alarm about the federal funding of local projects the progressive call “traffic calming” but you and I know as putting in speed bumps, reducing the number of lanes on a heavily trafficked thoroughfare from four to two and other steps being taken by municipalities to making commutes tougher and longer.
If you ask why they’d do that, consider the incentive that creates for commuters to use mass transit, which gets a healthy injection of funds in the bill. The politicians and the community associations control what goes where and how often. Unlike your car, which takes the trips you want to take on your schedule.
The bill should be opposed because of what it does, not because of how much it costs. The right vote is “No” and the right move is to start again. Or to wait for a new administration to come on board to drive the infrastructure train where it needs to go.
he economic rebound that began as the pandemic-related lockdowns started to end in the states is producing strong results throughout the United States despite the considerable rise in inflation. While higher prices are wiping out the income gains workers made during the pre-COVID boom, the surging stock market helped the amount of money held in private retirement accounts reach some of the highest levels on record.
The number of 401(k) and IRA millionaires have hit all-time records, CNBC’s Jessica Dickler reported Thursday, suggesting good times may still be ahead even though the perception is growing that President Joe Biden and his economic team are mismanaging the economy. In the most recent IPSOS poll, 55 percent of those surveyed said they were “pessimistic” about the direction of the country, an increase of 20 points over late April when the question was last posed. Pessimism, the polling firm said, was rising across all age groups and income levels and was even down among Democrats.
The Biden economic plan includes higher taxes and increased spending despite the recurrence of notable inflation. If it passes, it would likely cause a contraction in an economy that has appeared to be growing again since people started going back to work after many of the nation’s governors – mostly from the so-called “Red States” – stopped the pandemic-induced unemployment emergency bonus payments that more than one prominent economist identified as a significant disincentive for people to get back on the job.
For retirees and investors, meanwhile, the surging stock market and the steady increase in retirement account balances is welcome news considering how badly these holdings fared during the government-imposed lockdowns, losing considerable value in many cases. According to data provided by Fidelity Investments, the nation’s largest manager of 401(k) savings plans, their overall average balance was up 24 percent from a year ago and hit $129,300 at June’s end. Individual retirement account balances were also higher, CNBC said, reaching $134,900, on average in the second quarter, up 21 percent from where they were a year ago.
American workers across the economy are participating in the wealth creation, not just the so-called “ultra-rich.” According to Fidelity, nearly 12 percent of workers increased the contributions they made to their plans over the period while a record 37 percent of employers also automatically enrolled new workers in their 401(k) plans.
This growth in the number of workers joining the investor class is a political problem for Biden and the progressive Democrats who control Congress. The tax, borrow, and spend plan they are trying to pass over an apparently unified Republican opposition includes, for the first time in decades, serious proposals to increase the tax on capital and returns on investment.
This step back towards the economic policies of the 1970s that produced high unemployment and high inflation – something the economic theories dominant in government and academia at the time said was an impossibility – would be a job killer. Yet, even above that, some Democrats are talking up the institution of a “wealth tax” assessed annually on total holdings rather than income as a “pay for” for policies progressives say they wish to enact like tuition-free community college, free pre-K childcare, and the transition of the U.S. to an economy based entirely on renewable energy. With Fidelity reporting the number of its plans “with a balance of $1 million or more” jumping to a record 412,000 in the second quarter of 2021 and the number of IRA millionaires also at an all-time high, the savings amassed in these accounts may prove an irresistible target for the wealth taxers if their proposals begin to gain momentum in Congress.
The bipartisan infrastructure agreement contains billions of dollars to remedy supposed racial injustice and combat climate change.
The Washington Free Beacon obtained a Messaging Document circulating among Senate offices to rally support. Much of the document, which is aimed at winning over skeptical GOP lawmakers, appears to be taken word-for-word from a Biden administration fact sheet posted on the White House website on Wednesday.
Much of the highlighted spending aims to remedy discriminatory policies of the past. Part of the $110 billion earmarked for rebuilding roads and bridges is dedicated to fixing allegedly racist projects that “divided” black communities.The proposal specifically names highways such as I-81 in Syracuse, New York, that would be rebuilt around black communities, rather than through them. Secretary of Transportation Pete Buttigieg previously said that “there is racism physically built into some of our highways.”
Thousands of public school buses, according to the document, would be replaced with “zero emission vehicles” as part of a $7.5 billion effort to “modernize” the country’s transportation. These new buses “will benefit communities of color since these households are twice as likely to take public transportation,” according to the document.
The proposal advanced in the Senate Tuesday night with a vote of 67-32. Every Democrat voted “yes,” as did 17 Republicans, including Minority Leader Mitch McConnell (R., Ky.). With two-thirds support, the deal is expected to pass the Senate without a GOP filibuster although it faces steep obstacles in the House.
While the bill has the support of McConnell, not all Republicans are on board. Former president Donald Trump lashed out against Republicans who supported the deal, calling Sen. Mitt Romney (R., Utah), who led negotiations between the two parties, a “SUPER RINO.”
“This will be a victory for the Biden administration and Democrats, and will be heavily used in the 2022 election,” said Trump. “It is a loser for the USA, a terrible deal, and makes the Republicans look weak, foolish, and dumb.”
House Democrats, who hold a slim majority, can only afford losing a few votes. Already, Democrats like Rep. Pramila Jayapal (D., Wash.) said “the votes of Congressional Progressive Caucus members are not guaranteed on any bipartisan package until we examine the details.”
The document boasts of the “largest investment in clean energy in history,” which includes building a new “clean, 21st century electric grid” and billions of dollars “for supply chains for clean energy technologies.” The Department of Energy would also be tasked with creating a “digital climate solutions report, including potential for use of artificial intelligence as a climate solution.”
Residents along Amtrak’s Acela corridor will enjoy $6 billion for track maintenance, as part of the “largest federal investment in public transit in history.” Another $60 billion will be given for general passenger and foreign rail funding.
The document also proposes a variety of other ambitious initiatives, including the replacement of “all of the nation’s lead pipes.”
“Currently, up to 10 million American households and 400,000 schools and child care centers lack safe drinking water,” the messaging document says. “The deal’s $55 billion investment represents the largest investment in clean drinking water in American history, including dedicated funding to replace lead service lines. … It will replace all of the nation’s lead pipes and service lines.”
A separate document obtained by the Free Beacon explains how the government will finance the new spending. Most of the sources of revenue appear to be from a variety of accounting tricks, such as the $2.9 billion “from extending available interest rate smooth options for defined benefit pension plans.” Those who support the plan expect another $28 billion to come from “applying information reporting requirements to cryptocurrency.”
The largest portion of funding comes from the “repurposing of certain unused COVID relief dollars,” totaling $205 billion. Another $53 billion comes from “certain states returning unused enhanced federal [unemployment insurance] supplement.”
A leading liberal think tank analysis shows the Biden overall tax plan would shred the president’s 2020 campaign pledge that taxes would not be increased “by one thin dime” for anyone making less than $400,000 a year.
According to the Tax Policy Center, if Biden’s combined tax initiatives became law this year, 75 percent of middle-class families would see the amount they pay in taxes increase in 2022, and that 95 percent of middle-class families would pay more in taxes by 2031. At the same time, Biden Treasury Secretary Janet Yellin is refusing to rule out the restoration of special interest tax breaks that would disproportionately benefit the ultra-wealthy.
Testifying recently before the House Committee on Ways & Means, Yellin refused to say whether the president and his advisers would move ahead on demands by Democratic governors like Andrew Cuomo (NY) and Phil Murphy (NJ) and members of Congress from the blue states that state and local tax payments be made fully deductible on federal returns once again. The provision known as SALT was capped from the tax code in the 2017 Tax Cuts and Jobs Acts as a “pay for” that made it possible for other rates to be reduced.
When asked whether Biden would support eliminating the cap if it was included in any compromise infrastructure package. Yellen said, “I’m not going to negotiate here on behalf of the president.”
Biden policies, some lawmakers say, are forestalling the onset of a full-blown recovery caused by the pandemic-related lockdowns that plunged the U.S. closer to financial disaster than at any time since the so-called great recession of 2008.
“Through the first five months of this year, the Biden Administration added 500,000 fewer jobs than the last five months of 2020 – some of which were during the height of Covid cases and deaths. A half-million jobs short. And due to inflation, real wages have declined since President Biden took office,” Brady said in a statement.
The White House has repeatedly denied this is because the enhanced unemployment benefits authorized at the beginning of the lockdown period have been allowed to continue. A study recently published by the Committee to Unleash Prosperity’s Steve Moore, Casey Mulligan, and E.J. Antoni shows the relationship between the two to be direct and economically harmful, a view shared by Federal Reserve Chairman Jerome Powell who has made clear he believes these benefits have discouraged workers from returning to work and harmed recovery.
While Biden policies may be cooling job growth here at home, they’d incentivize job creation and fuel an expansion overseas – especially if the president’s agreed-upon among the G-7 plan for a global minimum corporate tax is eventually adopted.
The 15 percent GMT, which must be approved by Congress before becoming law, would make it better to be a foreign worker or company than an American one. If it’s imposed, it would incentivize U.S. companies to move U.S. jobs overseas and to “offshore” themselves which, before the 2017 Tax Cuts and Jobs Act’s creation of a global intangible low tax income provision was a common occurrence in the American market.
The proposal the Biden administration has endorsed holds out the prospect of a global tax code in which American companies operating overseas have to pay higher taxes than their foreign competitors. This would give foreign competitors an advantage to target American companies and jobs and erode the U.S. tax base. As Brady described it, The White House is “leading a global race to the bottom” for America’s competitiveness and our workers.
If President Joe Biden gets his way, the business of filing taxes in 2022 will be more complicated, more expensive, and more progressive than they’ve been in about 40 years.
Biden didn’t say much about taxes during the 2020 campaign besides his promise that those making less than $400,000 a year would not see their tax bill rise by “one thin dime.” The proposals he’s put forward as “payfors” for infrastructure, COVID relief, and other new spending programs are riddled with new taxes and hike existing levies to the point one can safely say the era of “tax and spend” has returned, in a punitive, almost vengeful way.
As the Committee to Unleash Prosperity observed Monday in its free daily Hotline, the top 5 percent of U.S. income earners pay half of all income taxes while the top 1 percent – the left’s favorite whipping post – pay more than 40 percent of the total tax intake. Meanwhile, as the chart below shows, the bottom half of income earners have an effective federal tax that’s close to zero – even when payroll and gasoline taxes are factored in. Quoting the Cato institute’s Chris Edward, “Joe Biden’s comments about the rich having low rates are clearly off base. The highest earners have tax rates twice the income of those in the middle and almost ten times the rates at the bottom.”
Biden’s plan to “soak the rich” is more about politics than economics. The numbers don’t add up and, if his tax cuts are enacted at the same time the United States is trying to emerge from a prolonged, lockdown induced recession, the results could be inflationary and job-killing rather than spark renewed growth in the economy as the 2017 Tax Cuts and Jobs Act did. Nonetheless, the Democrats are, as a party, committed to TCJA’s repeal in its entirety and, in the process, violate Biden’s campaign pledge.
Republicans on the House Ways and means Committee said Monday that if Biden gets his way on TCJA, it will do families “real harm” even at the median income level. A family of four with a household income of $73,000 could expect to see its federal taxes increased by $2,000. A single parent with one child should plan to pay $1,300 more.
Additionally, the committee said, the child tax credit would be cut in half as would the standard deduction, millions of middle-class households would again have to pay the Affordable Care Act individual mandate tax, and the American corporate tax rate would once again become the highest in the industrialized world.
The policies of tax and spend reached their apex in the 1970s under Jimmy Carter. America literally can’t afford to go back. The inflation alone would have a potentially ruinous impact on government discretionary spending. No Democrat who claims to be a moderate could go along with Biden’s plan to undo any part of tax-cutting, job-creating law Congress passed in 2017 – especially given what the president has planned for phase two. The prudent force forward is to keep the rates where they are, reduce overall federal spending, and let the U.S. economy boom. There will be plenty of money later to do the things we’ve already put off doing over the last four years, economists say, once the country is flush again.
As slogans go, “build back better – which Joe Biden used to define his 2020 bid for the presidency – lags well behind “Happy Days Are Here Again,” “Make American Great Again,” and “I Like Ike” in clarity and vision. It’s not even close to “It’s the economy, stupid,” the unofficial campaign mantra of Bill Clinton’s successful run in 1992.
What Biden’s been doing during his first one hundred suggests even he didn’t understand what he meant. If he planned to create millions of new jobs – good jobs at good wages with good benefits as the Democrats used to say – the April jobs report indicates he’s failing.
What’s gone unreported is that jobs that are coming back – and there are some – are coming back as lockdowns are ending. The economic downturn that appears now to be ending was not the product of an expected downturn in economic activity but the direct result of state-by-state lockdowns that forced businesses to curtail operations or close as part of an ill-conceived effort to slow the spread of the coronavirus.
To supplement lost income, the Pelosi-led Congress joined first with Donald Trump and then with Biden to put the nation on relief. It’s no wonder, therefore, that business leaders are complaining they can’t find people to fill the jobs they have available once the Washington politicians incentivized joblessness instead of work by extending and enhancing unemployment benefits. It should be obvious that when you pay people not to work, they won’t work but somehow the experts in D.C. missed this.
Biden and the Democrats are nevertheless still all in. They said their $1.9 trillion “American Rescue Plan” would save the economy. Instead, it looks like it’s dragging it back down while inflation, a monster the U.S. Federal Reserve was thought to have tamed, is once again rearing its ugly head. The price of goods and services on which the American people rely are increasing, suddenly and sharply, as the impact of trillions in new spending during the pandemic comes home to roost.
Now, according to the Washington Post and other outlets, the Democrats are having trouble building support for their latest $4 trillion tax and spend program. Moreover, Democratic Congressional Campaign Committee Chairman Sean Patrick Maloney, D-N.Y., is now warning the White House its planned tax hike “could hurt vulnerable House Democrats up for re-election in 2022.”
It’s an important message for Biden – who’s apparently sending it back marked “Return to Sender.” The president, it seems, remains intent on raising taxes on as many people, goods, and services as he can convince Congress to accept.
Biden’s initial proposal to take the corporate tax rate from 21 percent to 28 percent landed with such a resounding “thud” he was forced to offer up 25 percent as a compromise. Even so, that would still move the United States back into an uncompetitive position with the world’s other industrialized economies. What is being omitted thus far from the discussion is that, when state-corporate levies are added in, the average U.S. combined national and subnational tax rises to 25.77 percent.
At 25 percent, what Biden has now put on the table, the combined rate would be 29.5 percent, higher than what is levied by China and higher than the average rate for countries in the OECD.
Moreover, says Americans for Tax Reform, a non-partisan group opposed to tax increases, “Workers, consumers, and shareholders will bear the burden of an increased corporate tax rate. Such a hike will cause businesses to invest less in the United States and more overseas, resulting in fewer job opportunities and lower wages for American workers:”
According to ATR:
–A Treasury Department study estimated that “a country with a 1 percentage point lower tax rate than its competitors attracts 3 percent more capital.” This is because raising the corporate rate makes the United States a less attractive place to invest profits.
–A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages.
–A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003.
–Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor.
Biden’s insistence the corporate tax be raised, the cornerstone of his economic plan, will not create jobs, reduce debt, or bring increased revenues into the U.S. Treasury. It will however be a boon to almost every one of America’s competitors in the global marketplace.
Throughout the 2020 presidential campaign season, then-candidate Biden continually promised that he would not raise taxes on households making less than $400,000 per year. It was a promise echoed again by the White House just over a month ago, but the so-called American Jobs infrastructure plan rolled out by the administration pulls a bait-and-switch on the American people, particularly the working poor and ethnically diverse communities.
A key component of the Biden plan is the push for a nationwide transition to electric vehicles, which takes up some $174 billion in subsidies from the package, but one of the largest problems with the proposal is its disregard for the negative downwind effects it would have on those at the lower rungs of the economic ladder. As of 2019, the average cost of an electric vehicle was $55,600, far greater than the cost of other vehicles more affordable for lower income families. In fact, another recent study showed that the average income of electric car owners is at least $100,000 per year, well over even the middle-income line. While the Biden plan throws truckloads of money at other angles of the electric vehicle issue, it does nothing to address the fact that lower income households simply cannot afford electric vehicles. To make matters worse, electric vehicles only account for 2 percent of vehicle sales in the U.S., even though they have been an option for vehicle purchasers for a significant period of time. The Biden plan is catering to a niche segment of an industry, in a show of political nepotism for a pet campaign promise while slapping the American worker in the face in the process.
An aggressive plan like Biden’s calls for significant bumps in energy and electric grids. Even currently, with a transportation budget of $1.5 billion, electric companies have almost $1 billion more in requests for expansion, and this is the case notwithstanding the drastic increase in energy grids that the Biden plan would implement. More electric grids cost the utilities more to operate, meaning large spikes in utility costs.
California provides an example of this type of policy gone wrong, as it invests the most of any state into electric vehicle infrastructure yet has increasing issues with blackouts, high utility costs, and general cost-of-living increases. For instance, as of 2010, SDG&E, the major energy provider in the San Diego and southern California region, has seen consistent rate increases. Conversely, utility disconnections due to overdue bills and payments has also steadily climbed within this time period, suggesting that ratepayers are finding it more difficult to keep up with rising costs. Even more specifically, those burdened with these rate hikes are disproportionately minority groups in disadvantaged communities, who shoulder these costs for the benefit of disproportionately affluent areas that can afford EV’s.
Additionally, American seniors are keenly affected by these rate hikes. Per an AARP testimony in 2019 in Arizona, “twenty percent of Arizonans 65 and older rely on Social Security as their sole income source. Fifty percent get a substantial portion of their income from Social Security…[which] is about $17,500/year…Older Arizonans have much higher medical costs so many already [are forced] to choose today between, food, rent, medical care and very limited transportation…they cannot afford higher electric utility rates much less for electric vehicles.” Yet again, ratepayers are being conscripted to subsidize a service that they do not use, at the cost of their own well-being.
These specific examples are simply the tip of the iceberg. If the Biden E.V. plan is implemented, the consequences would be far more drastic than even the current rate hikes. If less fortunate groups are not benefiting from electric vehicles, why should they be forced to pay for them? Spiked electric utilities affect the poor and vulnerable more negatively than any other economic demographic. Utilities are a difficult commodity to live without, particularly within a family, and they should not be burdened with rate hikes for services they do not use. Simply put, lower income households are not driving electric vehicles, and the Biden plan not only gives them no incentive or ability to do so but punishes them for costs incurred by wealthier households, all while claiming victory because rate hikes caused by government action aren’t technically a tax. Tax or not, the cost to the American people is the same. The ploy is a cruel bait-and-switch tactic that misleads the American people and should raise red flags about the Biden administration’s friendliness to the American worker.