This week, a National Review editorial described the twisted priorities of House Speaker Nancy Pelosi’s latest tax proposal. The plan would simultaneously crush the fragile American economy and fail to raise revenue that could even begin to pay for the multiple trillions of dollars that Joe Biden and Democrats in Congress intend to spend on new “infrastructure” programs along with every current pork-barrel expenditure.
Raising revenue seems to be lost in the haze of the tax proposal, which piles additional complexity on a system already full of compliance pitfalls.
Under the proposal, personal income taxes, corporate taxes, and capital gains investment taxes would all go up. Estate taxes would be strengthened and increased. “Pass-through” partnership personal income would also be targeted. Congress’s Joint Committee on Taxation estimates that the increases will amount to roughly $2.1 trillion in new taxation. Less than half of the new taxes would come directly from high-income earners. The “incidence” of the new taxes that they fall upon will hit every consumer in the country as increased costs are added to the price of every product on the market. As usual, the lowest-income and fixed-income Americans will be the hardest hit.
The trend of high-income earners who live in the “bluest” American cities to be more progressive politically may be driving the direct taxation impact of the new proposal more toward “wealth” than “income.” The editorial cites recent reporting by the New York Times that laments how the proposal does not go far enough to tap the “vast fortunes of tycoons like Jeff Bezos and Elon Musk.”
The editorial argues that the House proposal, as bad as it is, is likely “better” than the expected tax proposal that Senate Democrats have in mind. While Sen. Joe Manchin (D-WV) has been unsteady in supporting Democratic spending plans, there is no reason to believe that he will hesitate to support whatever tax plan the Democratic Party comes up with.
The costs associated with losing the two Georgia Senate seats in 2020 appear to be going up all the time.