Goldman Sachs: Biden Tax Hikes May Pose Greater Economic Threat Than Coronavirus

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Posted by John Kartch on Thursday, June 11th, 2020, 12:30 PM PERMALINK

A Goldman Sachs client note said Joe Biden's tax hikes may pose a greater economic threat than the coronavirus.

As reported by Fox Business:

“Although the coronavirus has caused the sharpest decline in economic activity on record, in some ways tax policy represents a larger risk to earnings and consequently to equity prices,” wrote David Kostin, chief U.S. equity strategist at Goldman Sachs.

As reported by CNN:

Goldman Sachs warns that Biden's tax plan, combined with an expected drag on GDP, would lower next year's S&P 500 per-share earnings by $20 to $150.

Biden wants to impose a series of steep tax increases on the American people. He wants to raise the corporate tax rate to 28 percent, from the current rate of 21 percent. This would give the U.S. a higher corporate rate than Communist China.

Biden also wants to impose a 40 percent capital gains tax on "every single solitary person." Biden wants to further raise the capital gains burden by eliminating step-up in basis.

Biden is on record many times calling for the elimination of the Tax Cuts and Jobs Act.

If Biden repeals the TCJA, as he has said countless times, Americans will be stuck paying significantly higher taxes:

  • A family of four earning the median income of $73,000 would see a $2,000 tax increase each year.
  • A single parent (with one child) making $41,000 would see a $1,300 tax increase each year.
  • Under Biden the USA would have the highest corporate income tax rate in the developed world, higher than China (25 percent), the United Kingdom (19 percent), Canada (26.8 percent), and Ireland (12.5 percent). 
  • Millions of low and middle-income households would be stuck paying the Obamacare individual mandate tax.
  • Small employers will face tax increases due to the increase in marginal income tax rates and the repeal of the TCJA 20% deduction for small business income.
  • Taxes would rise in every state and every congressional district.
  • The Death Tax would ensnare more families and businesses.
  • Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.  
  • The AMT would snap back to hit millions of households.
  • Every household claiming the child tax credit will see their child tax credit cut in half, resulting in an income tax increase.
  • Every household that claims the standard deduction will see it cut in half, resulting in an income tax increase. This will also impose tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.
     

Even left-leaning media outlets have acknowledged the fact that the Trump tax cuts have helped middle income households:


On tax policy, Biden has a history of lying to the American people. He lied when he ran for Vice President in 2008 when he repeatedly said he would not support any form of any tax that imposed even “one single penny” of tax increase on anyone making less than $250,000. Biden shattered that promise upon taking office.

To stay up-to-date on Biden's tax hikes, visit ATR.Org/HighTaxJoe

Photo Credit: Gage Skidmore/Flickr

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