Biden Nominates Left-Wing Extremist to head OCC

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Posted by Bryan Bashur on Monday, September 27th, 2021, 5:00 PM PERMALINK

Last week, President Biden nominated a Cornell University law professor who was educated in the Soviet Union to lead the Office of the Comptroller of the Currency (OCC). 

Saule Omarova, a graduate of Moscow State University and a recipient of the Lenin Personal Academic Scholarship, should raise eyebrows in the Senate.  

If Omarova is confirmed to the position, she will be able to serve a five-year term as comptroller of the currency. As comptroller, Omarova would head the bureau that “charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.”

On her resume, Omarova states that she was a senior fellow at the Berggruen Institute from 2020-2021. The think tank was founded by Nicholas Bergguren, a self-proclaimed Marxist, and has a history of promoting Chinese communist propaganda in the news. 

Omarova will also undoubtedly expand the size, scope, and authority of the OCC to the limit.

She would use her role to push “equity” policies that increase the federal government’s footprint in the market. Most notably, Omarova has advocated for the Federal Reserve to provide deposits and lending for individuals in the country—crowding out any private banking opportunities in the United States. Omarova has explicitly stated her support for replacing private bank deposits with the Federal Reserve in the name of “equity.” Omarova says that, “the ultimate ‘end-state’” in her writing is where “FedAccounts fully replace—rather than compete with—private bank deposits.” This would be a total overhaul of the banking system in the United States. Effectively eliminating all free market competition in the banking system.

Omarova has also expressed the need to continue to assert strong government authority when administering bank charters. In an article from 2015, she and her coauthor opined, “whether it might be time to bridge the gulf between banking and general corporate regulatory regimes – not by making access to bank charters ‘free and easy,’ but by making access to corporate privileges once again expressly conditional on the delivery of public benefits.” No doubt, Omarova has no intention of promoting free market ideologies when regulating federally chartered banks, but instead will likely implement policies to make it harder for banks to conduct business and thus restrict access to capital across the country. 

Omarova is not shy about expanding the size of the federal government to prop up every industry in the United States. For example, in an article she wrote in April of 2020, Omarova stated the need for a new permanent federal agency to bail out companies during crises. Omarova states that “Having a permanent institutional platform for coordinating the national crisis response, including bailouts of private companies, would help to ensure that these emergency measures are executed in an efficient, transparent, and democratically accountable, and socially just manner.” Omarova calls this agency the National Investment Authority. She envisions this new centralized investment juggernaut to “act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.” So, the federal government gets to decide where capital should be allocated, not private banks who actually have shareholders that hold them accountable. 

Finally, Omarova is critical of cryptocurrencies. In an article Omarova wrote for the Harvard Law School Forum on Corporate Governance, she claims that cryptocurrencies contribute to financial instability, fail to produce “activity in the real economy,” and “fuel financial speculation on an unprecedented scale.” In light of her opinions on cryptocurrencies, it is unlikely that Omarova would be supportive of potential proposals to engender greater collaboration or partnerships between fintechs and national banks.  

When Omarova appears before the Senate Banking Committee for her nomination hearing, senators should ask her hard questions. The Senate needs to avoid confirming someone to the helm of the OCC that will restructure the national banking system to reflect that of a totalitarian regime.

Photo Credit: "United States Capitol" by Phil Roeder is licensed under CC BY 2.0

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It’s Time for Biden to Close His Personal Tax Gap

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Posted by Isabelle Morales on Monday, September 27th, 2021, 4:30 PM PERMALINK

President Biden constantly accuses others of not “paying their fair share” of taxes and even claims tax increases are “patriotic.” But Biden himself could owe up to $500,000 in unpaid taxes, according to a new report by the Congressional Research Service, published in the New York Post.

It is time for Biden to close his personal tax gap. Even the progressive Tax Policy Center called Biden’s maneuvers “pretty aggressive.”

In 2017 and 2018 Biden utilized several “S corporations” to avoid paying Medicare tax on speaking fees and book sales. These two S-corporations, the CelticCapri Corporation and the Giacoppa Corporation, allowed Biden to shield $13 million in income and avoid the 3.8 percent Medicare Payroll Tax, and the 0.9 percent Obamacare "Additional Medicare Tax."

While Biden’s tax avoidance has been known for several years now, the CRS report analyzes cases in which the IRS won against taxpayers who used similar, aggressive tactics. As such, the report suggests that the IRS would also have a strong case that Biden owes $500,000 in taxes under current rules, as he improperly in 2017 and 2018. 

As the report explains, courts have routinely determined that shareholder-employees are subject to employment taxes: 

“Courts have agreed with the IRS that shareholder-employees are subject to employment taxes when shareholders take distributions, dividends, or other forms of compensation in lieu of reasonable compensation.”  

Even Left-leaning tax experts have previously called out Biden for his "pretty aggressive" tax maneuvers, as reported by Richard Rubin of the Wall Street Journal: 

“To the extent that the Bidens’ profits came directly from the couple’s consulting and public speaking, “to treat those as other than compensation is pretty aggressive,” said Steve Rosenthal, a senior fellow at the Tax Policy Center, a research group run by a former Obama administration official.” 

This is clear hypocrisy as Biden supports expanding Obamacare and routinely says “the rich” need to pay their fair share. The Obama administration considered it a top priority to close this loophole. Further, Democrats’ $3.5 trillion reconciliation would prohibit this specific tactic. 

Joe Biden has repeatedly railed against the “rich” using tax loopholes. For instance, during his speech at the 2020 Democrat National Committee he said loopholes should be repealed and the wealthy need to pay their fair share: 

"We can pay for these investments by ending loopholes, unnecessary loopholes... Because we don’t need a tax code that rewards wealth more than it rewards work. I’m not looking to punish anyone. Far from it. But it’s long past time the wealthiest people and the biggest corporations in this country paid their fair share.” 

President Biden has been championing the $3.5 trillion reconciliation bill, which includes the largest tax increase since 1968. These tax hikes will disproportionately hurt workers, retirees, consumers, and small businesses. However, they’ll be told that their involuntary sacrifice is “patriotic” and necessary. Meanwhile, politicians who impose these tax hikes, like Joe Biden, can and will use their infinite resources to avoid paying “their fair share.”  

Biden needs to immediately send the IRS a $500,000 check to close his personal tax gap. Otherwise he has no moral authority to lecture and accuse everybody else.

Photo Credit: "President Joe Biden Visit" by National Renewable Energy Lab is licensed under CC BY-NC-ND 2.0.

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ATR Supports Bill to Ensure Transparent, Open Debate For Senate Reconciliation Process

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Posted by Isabelle Morales on Monday, September 27th, 2021, 4:20 PM PERMALINK

Senator Mike Braun (R-Ind.) last week introduced legislation that ensures Senate Democrats allow a transparent and open process that includes committee hearings before voting on their $3.5 trillion budget reconciliation bill. This legislation, the No Hearing, No Vote Act of 2021, is supported by Senators Burr (R-N.C.), Inhofe (R-Okla.), Barrasso (R-Wyo.), Blackburn (R-Tenn.), Cramer (R-N.D.), Crapo (R-Idaho), Rick Scott (R-Fla.), Hoeven (R-N.D.), Ernst (R-Iowa), Lankford (R-Okla.), Capito (R-W.V.), Risch (R-Idaho), Rubio (R-Fla.), and Hagerty (R-Tenn.). 

This legislation mirrors legislation introduced by Senate Majority Leader Chuck Schumer (D-N.Y.) and 39 other Democrats in 2017, so this should not be a controversial bill. If lawmakers are serious about ensuring a transparent process for such consequential pieces of legislation, they should vote in favor of this bill.   

Congressional Democrats have not held any hearings on the policies they have proposed in the $3.5 trillion reconciliation bill. The Senate also plans to skip the markup process and take this bill straight to the Senate floor. intend to hold a markup during the consideration of this bill either. Clearly, the American people are being kept in the dark on what is actually in this legislation. 

The reconciliation bill Democrats have proposed contains the largest tax increase since 1968, a massive expansion of welfare, supersizing of the Internal Revenue Service, numerous green energy subsidies, and more.  

The reconciliation bill contains a corporate income tax hike to 26.5 percent, higher than Communist China. Under this plan, the average combined state and federal corporate tax would be 31 percent. Corporate taxes are primarily borne by workers and consumers. It would also increase the top marginal income tax rate to 39.6 percent, hitting millions of small businesses organized as pass-throughs. Further, the bill would double the capital gains rate, impose a 15 percent minimum tax on book income, and more. 

Democrats would use these taxpayer funds to radically expand the welfare state through a refundable child tax credit, paid medical and family leave, free pre-K education, free community college, public health insurance plans, countless tax credits for green energy, and more. It also contains countless "woke," perplexing items like a tax handout for journalists, the Civilian Climate Corp (make-work program for jobless climate activists), and a $1,500 tax credit for e-bikes. 

If passed, this reconciliation bill will have real, enormous effects on the American people. At the very least, the American public and all lawmakers should be part of the conversation and process. 

Photo Credit: "US Capitol" by Reizigerin is licensed under CC BY-ND 2.0

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Democrats Tax Hike Proposal Will Overwhelmingly Be Paid By People Earning Under $100K - JCT

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Posted on Monday, September 27th, 2021, 2:02 PM PERMALINK

New data released today by Congress's  Joint Committee on Taxation (JCT) showed what we have known since the very beginning: The Congressional Democrats plan to hike the tobacco tax, and increase taxes on lifesaving reduced risk tobacco alternatives, will be overwhelmingly paid by some of the poorest in society, and is a blatant violation of President Biden's pledge to not raise taxes on Americans earning under $400,000.

According to the JCT, over a quarter of money raised will come from persons earning under $30,000,  77.5% of people who will be hit with these taxes make under $100,000/year, while 94.3% make under $200,000 a year.

Fortunately, some Democrats such as such as Rep. Steven Horsford (D-NV) have "raised concerns that it would hit those with lower incomes the hardest".  Hopefully this new data will help convince his colleagues to honor President Biden's pledge. 

 


West Virginians Will Face Higher Taxes Than Communist China if Dem Bill Passes

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Posted by John Kartch on Monday, September 27th, 2021, 1:19 PM PERMALINK

If Sen. Joe Manchin votes for the Democrats' reconciliation bill, he will stick West Virginia companies with a higher tax rate than communist China.

The Democrats' reconciliation bill would leave West Virginia with a combined federal-state corporate tax rate of 31.3% vs. communist China's 25%.

The Democrat bill will also put West Virginia companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Manchin must explain why he wants to stick West Virginians with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes. If passed, the combined federal-state capital gains tax rate for West Virginians would be 38.3% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Manchin would be wise to oppose any tax increase," said Norquist.


Montanans Will Face Higher Taxes Than Communist China if Dem Bill Passes

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Posted by John Kartch on Monday, September 27th, 2021, 1:12 PM PERMALINK

If Sen. Jon Tester votes for the Democrats' reconciliation bill, he will stick Montana companies with a higher tax rate than communist China.

The Democrats' reconciliation bill would leave Montana with a combined federal-state corporate tax rate of 31.5% vs. communist China's 25%.

The Democrat bill will also put Montana companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Tester must explain why he wants to stick Montanans with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes. If passed, the combined federal-state capital gains tax rate for Montanans would be 38.41% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Tester would be wise to oppose any tax increase," said Norquist.


New Hampshire Companies Will Face Higher Taxes Than Communist China if Dem Bill Passes

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Posted by John Kartch on Monday, September 27th, 2021, 1:06 PM PERMALINK

If Sen. Maggie Hassan votes for the Democrats' reconciliation bill, she will stick New Hampshire companies with a higher tax rate than communist China.

The Democrats' reconciliation bill would leave New Hampshire with a combined federal-state corporate tax rate of 32.2% vs. communist China's 25%.

The Democrat bill will also put New Hampshire companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Hassan must explain why she wants to stick New Hampshire companies with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes. If passed, the combined federal-state capital gains tax rate for New Hampshire companies would be 36.8% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Hassan would be wise to oppose any tax increase," said Norquist.


Georgians Will Face Higher Taxes Than Communist China if Dem Bill Passes

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Posted by John Kartch on Monday, September 27th, 2021, 11:46 AM PERMALINK

If Sens. Raphael Warnock and Jon Ossoff vote for the Democrats' reconciliation bill, they will stick Georgia companies with a higher tax rate than communist China.

The Democrats' reconciliation bill would leave Georgia with a combined federal-state corporate tax rate of 30.7% vs. communist China's 25%.

The Democrat bill will also put Georgia companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Warnock and Ossoff must explain why they want to stick Georgians with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968.  It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes. If passed, the combined federal-state capital gains tax rate for Georgians would be 37.55% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Warnock and Ossoff would be wise to oppose any tax increase," said Norquist.

 

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Schumer Readies Carbon Tax that Doubles Gas Tax, Violates Biden’s $400K Tax Pledge

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Posted by Mike Palicz on Friday, September 24th, 2021, 1:30 PM PERMALINK

Senate Finance Committee Chairman Ron Wyden (D-Oregon) confirmed today that the Senate majority leader asked him to craft carbon tax legislation to be included in Democrats' $3.5 trillion tax and spend blowout.

Upon the request of Majority Leader Chuck Schumer (D-New York), Wyden is drafting legislation that could create a carbon tax starting as high as $18 per ton and set to increase over time, according to reporting from the New York Times. For context, the Congressional Budget Office has previously estimated that a $20 per ton carbon tax would increase taxes by $1.2 trillion over a decade while the center-left Tax Policy Center found a $20 per ton carbon tax reduces the pre-tax income of households in the lowest income quintile by nearly one percent. 

A Clear Violation of Biden’s Tax Pledge

This tax increase would violate President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year. A carbon tax would increase the price of gasoline, household energy bills and everyday consumer goods.

Last week, a leaked document from the Senate Finance Committee outlined plans for a similarly described carbon tax that would be paired with a carbon “border adjustment” – a proposal which the Whitehouse has already stated would “raise prices on a host of consumer goods, from cars to appliances, and conflict with Biden’s pledge not to tax any American earning less than $400,000 per year.” 

Gas Tax Hike on Steroids, Would Double the Gas Tax in Year One

A carbon tax of $18/ton would roughly translate to a gas tax increase of 18 cents per gallon in year one. A recent study from the Congressional Research Service found that every $1 per ton increase in a carbon tax roughly translates to a 1 cent per gallon increase in the price of gasoline. The current federal gas tax is 18.3 cents per gallon, meaning Wyden’s carbon tax would effectively double the gas tax in year one.

Biden’s own Secretary of Transportation, Pete Buttiegieg, has previously acknowledged that increasing the federal gas tax would violate Biden’s pledge.

“The President’s made a commitment that this administration will not raise taxes on people making less than $400,000 a year,” Buttigieg told Bloomberg Radio’s “Sound On” show in February. “And so that rules out approaches like the old fashioned gas tax.”

Sen. Joe Manchin ruled out a carbon in February

In February, Senator Joe Manchin (D-West Virginia) categorically ruled out a carbon tax while on video during a webinar:

"They want to talk about this as a penalty? Forget it. As long as I'm here and there's 50 votes and it takes 51 to pass it,” Manchin stated.

Democrats passing a carbon tax in the Senate would require a historical flip-flop from Sen. Manchin.

Photo Credit: WikiMedia Commons

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Arizonans Will Face Higher Taxes Than Communist China if Dem Bill Passes

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Posted by John Kartch on Friday, September 24th, 2021, 12:30 PM PERMALINK

If Sens. Kyrsten Sinema and Mark Kelly votes for the Democrats' reconciliation bill, they will stick Arizona companies with a higher tax rate than communist China.

The Democrats' reconciliation bill would leave Arizona with a combined federal-state corporate tax rate of 30.1% vs. communist China's 25%.

The Democrat bill will also put Arizona companies at a competitive disadvantage vs. Europe: The European average corporate tax rate is 19%.

"As the country tries to recover from a once-in-a-century pandemic, Sinema and Kelly would have to explain why they want to stick Arizonans with higher taxes than China and Europe," said Grover Norquist, president of Americans for Tax Reform.

The Democrats' $3.5 trillion bill will impose the largest tax increase since 1968. It will raise individual income taxes, small business taxes, corporate taxes, and capital gains taxes. If passed, the combined federal-state capital gains tax rate for Arizonans would be 35.17% vs. China's 20%.

The burden of the corporate tax rate hike will be borne by Arizona workers in the form of lower wages, and by households in the form of higher prices. Higher corporate tax rates will also raise utility bills.

The non-partisan Joint Committee on Taxation recently affirmed in congressional testimony that the corporate tax rate hike will fall on "labor, laborers."

Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

WATCH:

Economists across the political spectrum agree that workers bear the brunt of corporate tax increases. And 25% is on the very low end.

According to the Stephen Entin of the Tax Foundation, labor (or workers) bear an estimated 70 percent of the corporate income tax:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study by Alison Felix estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. She concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker and will see a decline in real wages:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

Even the left-of-center Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

"Sinema would be wise to oppose any tax increase," said Norquist.

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