{"id":239096,"date":"2021-03-17T15:00:25","date_gmt":"2021-03-17T19:00:25","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=239096"},"modified":"2021-03-17T15:00:30","modified_gmt":"2021-03-17T19:00:30","slug":"how-will-joe-bidens-tax-hike-impact-average-americans","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-will-joe-bidens-tax-hike-impact-average-americans\/","title":{"rendered":"How Will Joe Biden\u2019s Tax Hike Impact Average Americans?"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fhow-will-joe-bidens-tax-hike-impact-average-americans%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=239096&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-1601.jpeg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>According to numerous reports, President Joe Biden is planning to include \u201cthe first major federal tax hike since 1993\u201d as part of his next economic spending bill, to \u201chelp pay for the long-term economic program designed as a follow-up to his pandemic-relief bill.\u201d<\/span><\/p>\n<p><span>As reported by <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-03-15\/biden-eyes-first-major-tax-hike-since-1993-in-next-economic-plan\">Bloomberg News<\/a>, \u201cUnlike the $1.9 trillion Covid-19 stimulus act, the next initiative, which is expected to be even bigger, won\u2019t rely just on government debt as a funding source.\u201d<\/span><\/p>\n<p><span>\u201cWhile it\u2019s been increasingly clear that tax hikes will be a component \u2014 Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to <\/span><span>higher rates<\/span><span> \u2014 key advisers are now making preparations for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high earners,\u201d the report added.<\/span><\/p>\n<p><span>The report then outlined several of the \u201cproposals currently planned or under consideration:\u201d<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><span>Raising the corporate tax rate to 28% from 21%<\/span><\/li>\n<li aria-level=\"1\"><span>Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships<\/span><\/li>\n<li aria-level=\"1\"><span>Raising the income tax rate on individuals earning more than $400,000<\/span><\/li>\n<li aria-level=\"1\"><span>Expanding the estate tax<\/span><\/li>\n<li aria-level=\"1\"><span>A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)<\/span><\/li>\n<\/ul>\n<p><span>What kind of impact would such a proposal have on average Americans?<\/span><\/p>\n<p><b>Raising the corporate tax rate to 28% from 21%<\/b><\/p>\n<p><span>The Tax Cuts and Jobs Act of 2017, signed into law by President Donald Trump, had multiple impactful provisions. One was to change the corporate tax rate from a tiered system which was anywhere from 15% to 39% to a flat 21%.<\/span><\/p>\n<p><span>Pushing the corporate tax rate to 28% places the United States well above the average rate for every continental area of the world. According to <a href=\"https:\/\/home.kpmg\/xx\/en\/home\/services\/tax\/tax-tools-and-resources\/tax-rates-online\/corporate-tax-rates-table.html\">KPMG<\/a>, the average rate for 2021 in Africa was 27.46%, the Americas was 27.19%, Asia was 21.55%, the European Union was 20.71%, and Europe was 18.98%, with the global average being 23.68%. In other words, the United States\u2019 corporate tax rate would be pushed above the average rate.<\/span><\/p>\n<p><span>This change would also mean that the United States would impose harsher corporate tax rates than China (25%), and the United Kingdom (19%), making corporate investment in the United States less attractive when compared to its economic competitors.<\/span><\/p>\n<p><span>Not only could this lead to reduced investment in the United States \u2014 with the direct result of limiting economic and employment opportunities for Americans \u2014 there is also <a href=\"https:\/\/taxfoundation.org\/benefits-of-a-corporate-tax-cut\/#:~:text=One%20of%20the%20most%20significant,35%20percent%20to%2021%20percent.&amp;text=Economic%20evidence%20suggests%20that%20corporate,a%20portion%20of%20the%20burden.\">evidence<\/a> to suggest that \u201ccorporate income taxes are the most harmful type of tax and that workers bear a portion of the burden.\u201d<\/span><\/p>\n<p><span>In simple terms, increased corporate tax rates could make it harder to find a job, and make your job less rewarding if you still have one.<\/span><\/p>\n<p><b>Raising the income tax rate on individuals earning more than $400,000<\/b><\/p>\n<p><span>President Biden has defined those who earn $400,000 a year as \u201cwealthy,\u201d with 1.8% of taxpayers falling into this <\/span><a href=\"https:\/\/www.cnbc.com\/2020\/10\/06\/biden-defines-400000-a-year-as-wealthy-how-far-it-goes-in-a-city-.html\"><span>category,<\/span><\/a><span>&nbsp;accounting for 25% of the country\u2019s income.<\/span><\/p>\n<p><span>For those earning less than $400,000 annually, a tax hike on those earning more than $400,000 annually may seem insignificant, or irrelevant. However, in the same way that increased corporate tax rates have an impact on the employees of these corporations, an obvious risk of reducing the disposable income of high-income owners is that they will have fewer resources to invest in new businesses or expanding current businesses.<\/span><\/p>\n<p><span>What does this mean in practice? Fewer jobs and higher costs for goods and services.<\/span><\/p>\n<p><b>Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships<\/b><\/p>\n<p><span>Pass-through businesses include sole proprietorships, partnerships, limited liability companies, and S-corporations which are not subject to corporate income tax. Instead, profits pass to owners and are taxed as individual income.<\/span><\/p>\n<p><span>According to the <a href=\"https:\/\/www.taxpolicycenter.org\/briefing-book\/what-are-pass-through-businesses\">Tax Policy Center<\/a>, \u201c<\/span><span>The share of business activity represented by pass-through entities has been rising, particularly since passage of the Tax Reform Act of 1986. Excluding sole proprietorships (which comprise a majority of business tax returns), more than 80 percent of businesses were organized as flow-through entities in 2015 \u2014 up from 47 percent in 1980. Including sole proprietorships, pass-throughs account for more than 50 percent of total business net income, up from about 22 percent in 1980.\u201d<\/span><\/p>\n<p><span>While it remains somewhat unclear what Biden means by \u201cparing back tax preferences\u201d for these pass-through businesses, such an action would inevitably impact the income of small business owners, with their employees (or potential employees) unavoidably impacted as a result.<\/span><\/p>\n<p><b>Expanding the estate tax<\/b><\/p>\n<p><span>According to <\/span><a href=\"https:\/\/www.investopedia.com\/explaining-biden-s-tax-plan-5080766\"><span>Investopedia<\/span><\/a><span>, \u201c<\/span><span>The Biden tax plan entails two changes to the federal estate tax. It would reduce the estate tax exemption by approximately 50% from its current level of $11.58 million of estate assets, thereby restoring the threshold for taxable estates to its pre-Trump level.\u201d<\/span><\/p>\n<p><span>The report adds that tax experts generally argue that \u201cmost very wealthy individuals already take advantage of sophisticated tax-planning strategies that reduce their estate-tax liabilities and will continue to do so.\u201d However, we must again realize that there are those whose entire estate may now fall prey to the clutches of the estate tax \u2014 itself an immoral overreach of government double-taxation \u2014 while ignoring the financial decisions needed to pay the tax itself \u2014 which could even involve the liquidation of assets.<\/span><\/p>\n<p><span>The result, in the context of the average American, is that this could lead to a further reduction in investment resources and business infrastructure on which employed Americans rely.<\/span><\/p>\n<p><b>A higher capital-gains tax rate for individuals earning at least $1 million annually<\/b><\/p>\n<p><span>As explained by Investopedia, \u201c<\/span><span>To make the tax treatment of wage-earners and wealthy investors similar, taxpayers whose income exceeds $1 million would pay the same rate on investment income as applies to wages. In addition, the carried interest \u2018loophole,\u2019 claimed by many private-equity and hedge-fund managers, would be eliminated.\u201d<\/span><\/p>\n<p><span>Setting aside the repeated desire to double-tax the return of post-tax investments, this has yet another familiar result: the reduction of investment resources which could result in the addition of new jobs or expansion of new or existing businesses.<\/span><\/p>\n<p><i>Ian Haworth is an Editor and Writer for The Daily Wire. Follow him on Twitter at <\/i><a href=\"https:\/\/twitter.com\/ighaworth\"><i>@ighaworth<\/i><\/a><i>.<\/i><\/p>\n<p><i>The views expressed in this piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/i><\/p>\n<p><i>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a <\/i><a href=\"https:\/\/www.dailywire.com\/subscribe\"><i>member<\/i><\/a><i>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to numerous reports, President Joe Biden is planning to include \u201cthe first major federal tax hike since 1993\u201d as part of his next economic spending bill, to \u201chelp pay &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2310685,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-1601.jpeg","fifu_image_alt":"How Will Joe Biden\u2019s Tax Hike Impact Average Americans?","footnotes":""},"categories":[],"tags":[],"class_list":["post-239096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-1601.jpeg","fifu_image_alt":"How Will Joe Biden\u2019s Tax Hike Impact Average Americans?","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/239096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=239096"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/239096\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2310685"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=239096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=239096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=239096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}