Sen. Joe Manchin said he is ready to impose a corporate income tax hike and a European-style Value Added Tax (VAT) on West Virginians. The corporate tax increase will hit small and large West Virginia employers, and the VAT would hit all West Virginians and violate President Joe Biden’s pledge against any tax hike on any American making less than $400,000.
This is the same Joe Manchin who slipped a midnight amendment into the most recent spending bill in order to prevent West Virginians from reducing their own tax burden.
Manchin’s corporate tax hike will hurt West Virginians’ wages and drive jobs overseas. The corporate tax rate increase will also cause a direct increase in the cost of household utility bills – electric, gas, water – just as Americans are trying to dig out from the pandemic. Utility customers bear the cost of taxes imposed on utility companies, and utility companies pay the corporate income tax.
Thanks to the Trump tax cuts, at least 140 utility companies announced a lowering of utility bills including several utilities in West Virginia.
Manchin also floated the imposition of a VAT, an onerous tax from Europe that levies a tax on value added to a service or product at each point in the chain of production. West Virginians would also have to pay the VAT at the point of purchase – on top of existing sales taxes. This would violate Biden’s tax pledge and make everyday life more expensive.
The Manchin tax hikes will discourage businesses from investing in the United States. Capital is mobile, so a tax increase can result in jobs and investment going overseas. Manchin’s corporate tax hikes will encourage companies to do business elsewhere. Less money will be invested in the U.S. economy. Fewer jobs, lower wages, and a slower recovery.
Not only is a $3 trillion “infrastructure” spending bill questionable, its inclusion of damaging tax hikes is particularly concerning in the wake of a once-in-a-century pandemic.
Raising taxes during an economic downturn will be incredibly damaging to American workers and the economy.
In fact, Manchin said so himself when he asked West Virginia voters to send him to Washington:
“I don’t think during a time of recession you mess with any of the taxes or increase any taxes.”
Manchin at the time also said:
“I can’t look the people of West Virginia in the eye and ask them to pay a penny more until I know we are running this government efficiently.”
So what happened, Senator?