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. 

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.

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.

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.