President Biden has been meeting with lawmakers from both sides of the aisle to discuss the contents of a new “infrastructure” spending proposal. As part of this, Biden has proposed $3.5 trillion in tax hikes but has said he is open to alternative tax increases.
Now is the wrong time for tax increases and lawmakers should reject any effort to impose new taxes on families and businesses as the economy continues recovering from the pandemic.
The U.S. economy currently faces many challenges. These problems would be exacerbated by tax hikes:
- Coming out of the pandemic, millions of Americans are still out of work. The nation is seeing higher gas prices, with the threat of shortages growing. Inflation is spiking, with consumer prices increasing 4.2 percent overall. Because of the massive amount of federal dollars injected into the economy, investors are also growing concerned about a return of inflation.
- The April jobs report revealed that the U.S. economy added just 266,000 jobs and the unemployment rate rose to 6.1 percent, a far cry from Dow Jones estimates which predicted 1 million new jobs and an unemployment rate of 5.8 percent. March’s reported employment gains were also revised downward by nearly 150,000 jobs, from 960,000 to 770,000 jobs.
- Nearly 40 percent of jobs lost during the pandemic have not been recovered and 8.3 million Americans are still out of work.
- Millions of Americans are still underemployed. About 5.2 million workers are employed part-time for economic reasons, meaning they would prefer to work full-time, but cannot gain the hours needed to do so.
- The Consumer Price Index, which measures the average cost of a household’s basket of goods, rose by 4.2 percent, reports CNBC. Used car and truck prices rose by about 21 percent, with a whopping 10 percent increase in April alone. Further, lumber prices have increased by 124 percent in 2021.
With all these things in mind, now is not the right time to raise taxes.
Voters overwhelmingly oppose raising taxes coming out of the pandemic. According to a new poll conducted by HarrisX and commissioned by Americans for Tax Reform, 80 percent of voters say that now is not the right time to raise taxes because many businesses and individuals have not yet recovered. Only 20 percent of voters say now is the right time to raise taxes for new spending projects.
Lawmakers’ priority now should be to expand opportunities for growth, allow for businesses and individuals to flourish as economies open, and to prepare for alarming trends in prices and energy. Raising taxes now would significantly dim the light at the end of the tunnel.