Letter to the editor: Biden tax plan is fraught with long-ranging problems | SummitDaily.com

Letter to the editor: Biden tax plan is fraught with long-ranging problems

Henry Rissier

It sounds great, doesn’t it? Add a new, broad range of social programs and just tax the rich for them. This appears to be a good plan on the surface, but it’s fraught with long-ranging problems.

Fallacy No. 1: Raising the individual tax only on people making over $400,000 doesn’t just tax private citizens. It directly hits the majority of small businesses who are taxed at the individual rate. These are businesses that are already stressed, so their options are to either raise prices or perhaps declare bankruptcy.

Fallacy No. 2: The current corporate tax is finally at a competitive global rate, which is a major reason the economy has been booming. If raised back to the proposed rate of 29%, the $1.6 trillion that was repatriated to the U.S. will head offshore again along with the record-setting pre-COVID increase in jobs. The domestic corporations will simply pass along the higher taxes to consumers, accelerating inflation.

Fallacy No. 3: Raising the capital gains tax to above 40% does not only affect the rich. History has shown that a 28% capital gains tax is the sweet spot to keep money invested in the U.S. Above that rate, capital gains tax revenue actually drops. Reductions in stock market growth affect the average person’s 401(k), IRA and pension plans as well as providing corporations less capital to invest in growth, like new factories, research and development, or expanding domestic employment.

The question we all need to honestly ask ourselves is do we want spending and tax policies that stress the dignity of work and individual freedom over government dependence and a belief in the principle of equal opportunity for all to rise? If the answer is yes, our congressional representatives need to hear from you.




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