Today at 1:00 p.m. Joe Biden will host a major rally in Philadelphia, where he will repeat his vow to repeal the Tax Cuts and Jobs Act.
“First thing I’d do is repeal those Trump tax cuts,” said Biden on May 4 in South Carolina.
“When I’m president, if God willing I am, we’re going to reverse those Trump tax cuts,” Biden said this week in New Hampshire.
Biden’s promise to repeal the tax cuts is a threat to raise taxes. Repeal of the tax cuts would hit Pennsylvania hard:
- Pennsylvania households would lose their tax cut — a 24.5 percent tax cut on average, according to data reported by H&R Block.
- Pennsylvania residents would again be forced to pay the highly regressive Obamacare individual mandate tax. 166,680 Pennsylvanians paid the tax totaling $108,842,000 according to the most recent IRS annual statistics ((2016). 81 percent of people hit with the tax made less than $50,000 a year, and 40 percent made less than $25,000 a year. This tax was one of the many violations by Biden of his pledge against any and all middle class taxes.
- 840,000 Pennsylvania households who claim the Child Tax Credit would see the credit slashed in half from $2,000 to $1,000.
- 4.4 million Pennsylvania households who claim the standard deduction would see it slashed in half. (TCJA nearly doubled the standard deduction from $6,300 to $12,200 for an individual and from $12,600 to $24,000 for a family.)
The tax cuts are helping a long list of Pennsylvania businesses give pay increases, benefit increases, and bonuses. For example:
- Uncle Charley’s Sausage (Vandergrift, PA) hired new employees, purchased new equipment including a new sausage stuffer, and added a new production line.
- Hudson Facades (Linwood, PA) increased base pay and put $3,000 into every factor worker’s 401(k) account.
- Almo Corporation, the Philadelphia-based appliance distributor, is investing in a new distribution center and an ongoing headquarters renovation that can accommodate 65 additional employees.
- Guy Chemical Company (Somerset, PA) increased wages, bonuses, and investment in new equipment including a new forklift, new laboratory furnishings, updated computer equipment, and a new software system.
- Dollar Bank (Pittsburgh, PA) gave $2,000 permanent raises for employees making $60,000 or below.
If Biden repealed the tax cuts, Pennsylvanians would also be stuck paying higher utility bills because the corporate tax rate would revert back to 35 percent. Thanks to the Tax Cuts and Jobs Act, the corporate rate was reduced to 21 percent, and as a direct result PA utility companies passed on these savings to customers in the form of lower electric, water, and gas bills.
Examples include Pike County Light & Power Company, PPL Electric Utilities Corporation, Wellsboro Electric Company, West Penn Power Company, PECO Energy Company, Peoples Gas Company, UGI Central Penn Gas Inc., Pennsylvania American Water Company, and Citizens Electric Company of Lewisburg.
From a nationwide perspective, if Biden repeals the Tax Cuts and Jobs Act, the following would happen:
- A family of four earning the median income of $73,000 would see a $2,000 tax increase.
- A single parent (with one child) making $41,000 would see a $1,300 tax increase.
- Millions of low and middle income households would be stuck paying the Obamacare individual mandate tax.
- Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.
- Small employers will face a tax increase due to the repeal of the 20% deduction for small business income.
- The USA would have the highest corporate income tax rate in the developed world.
- Taxes would rise in every state and every congressional district.
- The Death Tax would ensnare more families and businesses.
- The AMT would snap back to hit millions of households.
- Millions of households would see their child tax credit cut in half.
- Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.
As noted by the New York Times, thanks to the GOP tax cuts, “Most people got a tax cut.”
The NYT also stated: “To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase.”
The Washington Post also stated: “Most Americans received a tax cut.”
More evidence of the benefits flowing from the tax cuts can be found in a recent H&R Block report, which stated, “overall tax liability is down 24.9 percent on average.”
In Biden’s home state of Delaware, the report found that residents received a 24.6% reduction in their taxes, on average.
Biden and the rest of the 2020 Democrats have thoroughly convinced themselves the tax issue is dead, but Americans will have their own say at the ballot box.
“Joe Biden is not Methuselah. He is Walter Mondale part deux,” said Grover Norquist, president of Americans for Tax Reform. In 1984 Mondale famously promised to raise taxes if elected. He lost to Ronald Reagan in the electoral college 525-13, winning only his home state of Minnesota and the District of Columbia.