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Today, the House voted to pass S. Con. Res. 14, the Democrat Fiscal Year 2022 budget resolution. The Senate has already passed this measure on a party-line vote. By voting for this budget, Democrats have fast tracked President Biden’s reckless $3.5 trillion ($3,500,000,000,000) tax and spending spree later this year.
The passing of this resolution has now teed off the following proposals:
Trillions in new tax increases on working families and small businesses. This budget resolution is the first step toward the Biden plan to raise taxes by $3 trillion over the next decade. Some of these tax increases include:
- Increasing the corporate tax rate from 21 percent to 28 percent, which will be passed along to working families in the form of higher prices, fewer jobs, and lower wages. This will give the U.S. a combined state-federal rate of 32 percent, higher than our foreign competitors including China, which has a 25 percent corporate tax rate.
- At least 2 million small businesses will get hit by Biden’s tax hikes. This includes over 1.4 million small businesses organized as c-corporations, family-owned farms impacted by the repeal of step-up in basis, and pass-through organizations which would be hit by the increase of the top marginal income tax to 39.6 percent.
- Raising the corporate income tax rate will hit Americans with higher utility bills as the country tries to recover from the pandemic. Customers directly bear the cost of corporate income taxes imposed on utility companies. Investor-owned electric, gas, and water companies must get their billing rates approved by the respective state utility commissions. Therefore, if Democrats raise the corporate tax rate, they will have voted to raise utility bills. [Americans for Tax Reform has compiled 300 examples of utilities passing tax savings along to customers.]
- Doubling the capital gains tax to 43.4 percent, a rate more than double China’s capital gains tax.
- Taking away step-up in basis and imposing a second death tax by taxing unrealized capital gains at death. This will disproportionately fall on family-owned businesses. Taking away step-up in basis has already been tried and failed. In 1976, Congress eliminated stepped-up basis, but it was so complicated and unworkable that it was restored in 1980.
- Imposing a 15 percent minimum tax on “book income” that will disallow the use of important deductions and credits that help promote job creation and economic growth.
- Increasing the top income tax rate to 39.6%, a tax increase that will fall on small businesses. As noted in a recent Senate Finance Committee report, "... in 2016, only 42 percent of net business income in the United States was earned by corporations, down from 78.3 percent in 1980."
- New taxes on American energy including a tax on manufacturers based on their methane production and a carbon border tax. These tax increases will be passed along to families and businesses in the form of higher prices.
- Creating a 21 percent global minimum tax, higher than the 15 percent global minimum tax the Biden admin is pushing other countries to enact. Because existing law denies foreign tax credits, this could see businesses pay a top rate of 26.25 percent.
- Repealing the deduction for foreign-derived intangible income, a tax cut that encourages businesses to house their intellectual property in the United States.
$80 billion in new IRS funding to hire 87,000 new agents. This would allow the IRS to audit and harass small businesses and American families for an additional $787 billion. It would hire enough new IRS agents to fill Nationals Park twice.
It would help implement the Biden plan to create a new comprehensive financial account information reporting regime which would force the disclosure of any business or personal account that exceeds $600.
Not only would this include the bank, loan, and investment accounts of virtually every individual and business, but it would also include third-party providers like Venmo, CashApp, and PayPal.
New IRS funding will also be a boon to the union that represents IRS employees. This union, the National Treasury Employees Union (NTEU), shovels 97 percent of their money into Democrat campaign coffers.
IRS employees also regularly perform union work on the taxpayer’s dime. In 2019, 1,421 IRS and other Treasury Department employees spent 353,820 hours of taxpayer-funded union time (TFUT), costing the federal government $17.27 million.
Socialist healthcare policies such as H.R. 3, the Pelosi plan to impose new taxes and government price controls on American medical innovation. This legislation creates a 95 percent excise tax on manufacturers and imposes an international reference pricing scheme that directly imports foreign price controls into the U.S.
This proposal will reduce access to new, lifesaving and life-preserving medicines. According to research by the Galen Institute, the U.S. had access to 90 percent of new cures launched between 2011 and 2018, a rate far greater than comparable foreign countries. For instance, The United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.
It will also threaten high-paying manufacturing jobs across the country at a time when we are just emerging from the economic wreckage from the pandemic. Pharmaceutical manufacturers invest $100 billion in the U.S. economy every year, directly supporting 800,000 jobs including jobs in every state.
Trillions in new welfare spending that will allow the federal government to promote woke policies. This includes:
- Hundreds of billions in funding for “free” pre-K and community college to “close the equity gap.” Part of this funding will ensure classroom environments that are “inclusive for all students.”
- $10 billion to create a Civilian Climate Corps. The program will help set the stage for the Green New Deal and give progressive activists free government housing, transportation, and salaries to “advance environmental justice.”
- New spending to make childcare “affordable,” and to promote “culturally and linguistically responsive environments.”
- New federal subsidies to improve “housing affordability and equity” and to encourage green and sustainable housing.
- Lowers the Medicare eligibility age and expands coverage to Dental, Vision, and Hearing.
This $3.5 trillion spending package is a reckless proposal that will lead to increased taxes on working families and small businesses and trillions in new spending on welfare programs and woke policies.