President Biden’s signature $3.5 trillion “Build Back Better” plan contains one of the largest tax increases in American history. It would also add more crushing regulatory burdens on businesses, supercharge inflation, and create more of an entitlement society - many of the same problems that plague our state. The White House and Congressional Democratic leadership are working overtime behind closed doors to pass the bill, but it deserves a spot in the shredder, not a spot on the President’s desk.
Many economists say that tax increases reduce economic growth and stifle job creation, especially during times of economic uncertainty. Experts at the Tax Foundation project that the Build Back Better plan would kill over 300,000 jobs, reduce wages, and shrink the economy. With the economy on shaky ground due to runaway inflation and a supply chain crisis, taxpayers should ask themselves, “is now really the right time to double down on harmful tax increases?”
In its current form, the bill tallies nearly 2,500 pages, with many tax provisions that hurt American job creators. It would raise the corporate income tax rate to 26.5 percent, which when combined with state and local taxes, would be the third highest rate among developed nations. Despite talking points that the tax is only borne by large corporations, Congress’ own scorekeeper estimates a sizable portion of the corporate rate hike increase will be shouldered by taxpayers who earn less than $100,000 annually. Energy producers could be hit with additional taxes and royalties fees, inevitably raising energy prices on everyday consumers. This means even higher sticker prices at the pump, at the grocery store, and on your utility bill for heating your home.
There isn’t much good news for small businesses either. Many small businesses could also face higher tax burdens as Biden would increase tax rates and place new restrictions on their ability to utilize the 20 percent tax deduction that was created in the Tax Cuts and Jobs Act. The higher tax rate and removal of the deduction could be a double whammy for many small businesses.
It doesn’t end there, unfortunately. Biden’s plan means families could face a higher estate tax burden, otherwise known as the “death tax.” This could cause the dissolution of farms and small businesses when heirs are hit with a significant tax bill that they might not be able to afford. There is even a provision to raise taxes on tobacco and vape users, which would take $96 billion out of the pockets of cigarette and e-cigarette users. These hikes would certainly break Biden’s pledge to not raise taxes on anyone making less than $400,000 a year.
So, with all this new money in the government coffers, you’d think the government would spend it wisely, right? Well, not so much. The proposal includes trillions of dollars to fund parts of the job-killing Green New Deal, “free” community college, new entitlement programs, and the creation of the Civilian Climate Corps. The bill also includes some very questionable spending provisions that would allocate hundreds of millions of dollars for salmon, butterflies, desert fish, and plants. Don’t worry, though, because the new DC talking point is that $3.5 trillion in new spending is “going to cost nothing!” Only using DC math does $3.5 trillion equal $0.
Thankfully, there is still an opportunity to defeat this tax-and-spend monstrosity, but it requires our elected officials to take a stand together. In August, Democratic Rep. Anthony Delgado supported a resolution to allow this bill to begin to move through Congress. He even supported many of the bill’s provisions during the committee markup process. Yet, there are still opportunities to do right by his constituents. Delgado represents a moderate, common-sense district that has a reputation for rejecting extremism out of Washington - and $3.5 trillion in tax-and-spend legislation is absolutely extreme.
With a slim Democratic majority in the House of Representatives, all it takes is a few reasonable voices to stand up and demand a better. Taxpayers and business owners in New York, and indeed nationwide, would thank them for doing so. Let’s hope Rep. Delgado is one of those members.
Thomas Aiello is the Federal Affairs Director with the National Taxpayers Union, a nonprofit dedicated to advocating for taxpayer interests at all levels of government.