The one thing consistent with the Biden administration is that it succeeds in missing the nuances while bringing policy plans one after the other. The policy plans are more about virtue signalling than any real intent to bring changes on the ground. In his first speech to a joint session of Congress, Joe Biden conveyed that he has broken ranks with all his predecessors and rocketed the USA’s fall into socialism. Joe Biden is willing to punish the exact demography which creates jobs, sustains the economy and keeps America what it is.
However, in his haste to do all of this and embrace the socialist fringe in the Democratic Party, Joe Biden is putting a tax plan which is not even capable of doing what it intends to do. Wealthy Americans will avoid paying 90% of the estimated $1 trillion increase in investment taxes that President Joe Biden is proposing this week, according to a new study from the University of Pennsylvania’s Wharton Business School. And as it will only bring a facade that things are changing, Biden’s tax plan to fulfill his Infrastructure push will make the US poor and debt-ridden.
The Wharton researchers concluded that tax avoidance, much of it legal, would cut nearly $900 billion of what the proposed increase on capital gains taxes could raise for the government. “We don’t think that the proposal has a lot of teeth,” said John Ricco, director of policy analysis at the Penn Wharton Budget Model, a non-partisan fiscal policy research group at the business school. “There are a lot of games you can play to avoid paying this tax.”
In addition to this, 75% of CEOs said an increased tax burden on the US, 71% of CEOs said it would negatively affect their ability to hire and nearly two-thirds said it would result in slower wage growth for US workers. Biden’s massive investment plan, after being rejected by the Republicans, is now facing pushback from American corporates, who have made their disappointment and displeasure known to the White House. And now, even they are expressing that the go-ahead to the tax hike will lead to lower-income and lesser jobs for the Americans.
A central component of funding such federal programmes: a near-doubling of the tax on capital gains when selling stocks and other investments. For most Americans, this money, known as “capital gains,” is usually taxed at a rate of 20%. That’s less than the amount most Americans pay on their earnings from jobs and much less than the 37% rate top-earners pay on their earnings.
“It’s time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share,” Biden said in his address on Wednesday night, “We’re going to get rid of the loopholes that allow Americans who make more than a million dollars a year and pay a lower tax rate on their capital gains than Americans who receive a paycheck.”
However, in his pursuit of clickbait and topical declarations, Joe Biden has lost the art of policymaking that can really make a difference. His policy for taxing the rich is just a hoax which in reality will hurt the Americans in the long run.