With High Inflation Sapping Americans’ Finances Every Day, Biden Wants To Raise Their Taxes Too

‘Inflation Is Still Way Too High And Remains A Top Threat To Households, Businesses And The Broader Economy’

“New data released Tuesday morning by the Bureau of Labor Statistics showed that prices rose 6 percent in February compared with the year before…. Prices rose 0.4 percent in February compared with the month before.” (The Washington Post, 3/14/2023)

“The new data underscores the reality is that inflation is still way too high and remains a top threat to households, businesses and the broader economy. Higher housing costs weighed heavily on the latest figures, contributing to more than 70 percent of the monthly increase. Food, recreation and household furnishings also rose in price …” (The Washington Post, 3/14/2023)

“[T]he beast of persistent and elevated US inflation is proving tough to tame. Underlying consumer-price growth accelerated in February, with Americans continuing to experience the sting of rising rents and sticky prices for services…. the report from the Bureau of Labor Statistics on Tuesday showed inflationary pressures continue to build outside of shelter, which accounts for about a third of the overall CPI. The costs of recreation, household furnishings and airfares also increased at concerning paces. ‘Overall the breadth is still concerning,’ said Sarah House, senior economist at Wells Fargo & Co.” (“Tenacious US Inflation Reaches Past Housing and Proves Hard to Tame,” Bloomberg News, 3/14/2023)

“[D]igging under the surface, inflation looks firmer. The price index climbed 0.5 percent from the previous month after stripping out food and fuel — both of which bounce around a lot — to get a sense of underlying price pressures. That was up from 0.4 percent in January and it was more than economists had forecast. In fact, the increase was the fastest monthly pickup in the so-called core index since September 2022 — not the kind of progress central bankers are hoping for a year into their fight against inflation, at a time when economists and investors were hoping for a steady inflation slowdown.” (“The Inflation Report’s Details Showed Price Increase Stubbornness.,” The New York Times, 3/14/2023)

Year-Over-Year Inflation Has Exceeded 5% For Nearly Two Full Years Of Joe Biden’s Presidency

February marked the TWENTY-SECOND consecutive month in which inflation rose at least 5 percent year-over-year. (Bureau of Labor Statistics, Accessed 3/14/2023)

Prior to 2021, year-over-year monthly inflation had not been as high as it was in February 2023 since 1982. (Bureau of Labor Statistics, Accessed 3/14/2023)

The Cumulative Effect Of Inflation Since President Biden Took Office Has Americans Paying Significantly Higher Prices For Food, Energy, Transportation, Housing, And More

Since President Biden took office, inflation has increased 15.0%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Grocery (food at home) prices have increased 20.0%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Food away from home prices have increased 15.8%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Energy prices have increased 37.2%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Prices for fuel oil have increased 72.3%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Gasoline (all types) prices have increased 44.5%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Natural gas prices have increased 42.5%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Electricity prices have increased 24.0%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Rental prices for a primary residence have increased 13.5%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Prices for used cars and trucks have increased 22.4%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Prices for new vehicles have increased 19.0%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Furniture prices have increased 19.8%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Apparel prices have increased 12.1%. (Bureau of Labor Statistics, Accessed 3/14/2023)

• Airline fares have increased 40.0%. (Bureau of Labor Statistics, Accessed 3/14/2023)

Meanwhile, Americans Continue Giving Up More Of Their Paychecks To Inflation, With Year-On-Year Real Average Weekly Earnings Decreasing 1.9%

“Real average hourly earnings decreased 1.3 percent, seasonally adjusted, from February 2022 to February 2023. The change in real average hourly earnings combined with a decrease of 0.6 percent in the average workweek resulted in a 1.9-percent decrease in real average weekly earnings over this period.” (Bureau of Labor Statistics, Press Release, Accessed 3/14/2023)

“Workers’ pay didn’t keep up with prices in February. Average hourly earnings, adjusted for inflation, fell 0.1 percent in February. Over the past year, average hourly earnings are down 1.3 percent, adjusted for inflation.” (The New York Times, 3/14/2023)

Incredibly, With Families Struggling From Two Years Of High Inflation, Biden’s Budget Calls For Nearly $5 Trillion In Tax Increases On Americans

“The budget contains some $5 trillion in proposed tax increases …” (“Here’s What To Know About President Biden’s Budget Plan,” The New York Times, 3/09/2023)

• “As he has before, Mr. Biden proposed raising the top individual tax rate to 39.6% from 37%, raising the corporate tax rate to 28% from 21%, taxing top earners’ capital gains at higher rates and increasing taxes on U.S. companies’ foreign profits to 21% from 10.5%.... He would raise existing taxes on wages, self-employment income and investments to 5% from 3.8% above $400,000 in income and expand those taxes to cover active business income.” (“What’s in Biden’s 2024 Budget Request,” The Wall Street Journal, 3/09/2023)

• “President Biden went big in his $6.8 trillion annual budget proposal to Congress by calling for $5 trillion in tax increases over the next decade, more than what lawmakers expected … The $5 trillion in new tax revenues is more than what the president called for last year, when Democrats controlled the House and Senate.” (“Biden’s $5 Trillion Tax Gambit Catches Congress By Surprise,” The Hill, 3/12/2023)

“Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Finance Committee, called Biden’s ambitious tax plan ‘jaw-dropping.’ ‘This is exactly the wrong approach to solving our fiscal problems,’ he said of the $5 trillion aggregate total of proposed tax hikes. ‘I think this sets a new record, by far.’” (“Biden’s $5 Trillion Tax Gambit Catches Congress By Surprise,” The Hill, 3/12/2023)

HOUSE WAYS AND MEANS COMMITTEE CHAIRMAN JASON SMITH (R-MO): “The last thing this economy needs right now for working-class families is more spending and more increases in taxes. Right now, they lost … months of their salaries over the last two years just because of the cost of inflation. … That happened because of reckless government spending.” (“Tax Hikes In Biden’s Budget Would Be ‘Devastating’ For Americans, Says Top House Tax Writer,” Fox News, 3/10/2023)

Biden Is Seeking Tax Hikes On Income, Small Businesses, Investment, Energy, And More

SENATE FINANCE COMMITTEE REPUBLICANS:

“Main Street Job Creators Hit with $1.8 Trillion in New Taxes

• Expands the Small Business Surtax to hit owner-operated small businesses with a $650 billion tax hike.
• An additional $235 billion in taxes for non-corporate businesses through an increase in the top individual tax rate.
• Nearly one million small businesses organized as “C” corporations will face a tax rate that is 33 percent higher.

“The Highest Personal Income Tax Rate Since 1986

• When combined with surtaxes, the President’s budget calls for hiking the individual federal income tax rate up to its highest level since 1986, nearly 45 percent.
• In addition to raising the rate, the proposal also lowers tax brackets by hundreds of thousands of dollars, thereby pushing tax increases downward on even more hardworking Americans.

“An Expanded Death Tax Will Break Up Family-Owned Businesses

• Biden’s $77 billion in death tax increases will force family farms, ranches, and other generational businesses to sell off assets to pay an enormous tax bill to Washington.
• In addition, Biden has revived his plan for a second death tax by forcing heirs to pay an additional tax on their predecessors’ paper gains (including on the inflation that the President’s spending policies will likely stoke).

“A Business Tax Regime that Gives China the Upper Hand

• Despite negotiating a 15 percent global minimum tax rate for the rest of the world, the President’s budget calls for leapfrogging the global minimum tax rate for domestic businesses to 21 percent, giving our biggest foreign competitors—like China—the upper hand to undercut America’s ability to fairly compete.
• The budget also calls for hiking the domestic corporate tax rate to 28 percent. When combined with state and local taxes, many companies would face an income tax rate far higher than that. By comparison, China’s (25 percent) and Europe’s (average 21.7 percent) much lower corporate tax rates help insulate their businesses and force American businesses to compete on unfair terms.

“A Supersized IRS to Help Collect

• The budget requests an astounding $43.2 billion more for the IRS, in addition to the $80 billion the IRS already received from the Inflation Reduction Act.  Of the $43.2 billion:
• $14.1 billion comes from the annual budget request for FY2024.
• An additional $29.1 billion comes in the form of supplemental funding for enforcement and operations.
• Congress’s nonpartisan scorekeepers have already confirmed the IRS cannot collect estimated revenues without auditing those making less than $400,000 per year.  Legislative proposals to prevent those individuals from increased audit rates have been rejected by Democrats.

“A Continued War on American Energy

• American energy producers (and consumers) are struck with a new $37 billion tax hike, which will cut jobs, raise prices at the pump, and increase our reliance on foreign oil….

“A Tax on Savings and Investment

• Quadrupling the brand-new stock buyback excise tax, needlessly harming Americans who save, invest, or participate in retirement plans.
• Taxing stock buybacks artificially hampers business decisions about how best to use funds.  It ends up harming Americans who have their life savings invested in 401(k)s, IRAs and the stock market.
• Even Warren Buffet has pushed back on those attacking stock buybacks, saying they are ‘either an economic illiterate or a silver-tongued demagogue.’” (U.S. Senate Finance Committee Ranking Member, Press Release, 3/14/2023)

Tax Experts Know That These New Taxes Would Inevitably Hit Working-Class Americans, While Harming Their Economic Opportunities And American Competitiveness

SENATE BUDGET COMMITTEE REPUBLICANS: “The budget request focuses on tax hikes that will hit millions of hardworking Americans making under $400,000 and hurt the economy…. By the end of the budget window, taxes as a share of the economy reach levels only previously seen during World War II.” (U.S. Senate Budget Committee Ranking Member, Press Release, 3/09/2023)

TAX FOUNDATION: “The Biden budget proposal would move top tax rates in the U.S. beyond international norms. The higher marginal tax rates on work, saving, and investment would reduce competitiveness and economic growth.” (“Biden’s FY 2024 Budget Would Result in More Than $4.5 Trillion in Gross Tax Increases,” Tax Foundation, 3/09/2023)

• “The proposed Biden budget tax increases would put upward pressure on combined top tax rates at the state and local levels. For example, Biden’s FY 2024 Budget would yield combined top marginal rates in excess of 50 percent in five states and D.C.: New York (54.4 percent), Oregon (53.5 percent), California (52.9 percent), New Jersey (51.4 percent), Hawaii (50.6 percent), and D.C. (50.4 percent). Marginal rates would also exceed 50 percent in New York City (54.4 percent).” (“Biden’s FY 2024 Budget Would Result in More Than $4.5 Trillion in Gross Tax Increases,” Tax Foundation, 3/09/2023)

NATIONAL TAXPAYERS UNION FOUNDATION: “Tax increases on U.S. corporations may increase progressivity in the tax code, but a portion of the increase will be borne by middle- and even low-income workers and shareholders.” (“The Highlights of President Biden’s 2024 Tax Proposals,” National Taxpayers Union Foundation Blog, 3/09/2023)

“[Americans For Tax Reform President Grover] Norquist … warned that if enacted, raising the corporate tax rate would reverberate throughout the economy. ‘The corporate income tax, 70 percent of that is paid by workers and lower wages,’ he said. He said raising the top marginal tax rate and capital gains tax rate would hit small businesses that file under subchapter S of the tax code. ‘When you raise the top individual rate, you’re raising taxes on millions of smaller businesses in the United States,’ he said. ‘Their employees end up paying that because that’s money they don’t have in the business anymore.’” (“Biden’s $5 Trillion Tax Gambit Catches Congress By Surprise,” The Hill, 3/12/2023)