Massive New Taxes Will Cripple Economic Growth

By Royal Alexander/Opinion

Crushing new taxes on job creators, along with workers staying home because they make more money not working, are harming our very productive economy.

President Reagan once stated, “I believe the best social program is a job.” That simple truth remains, and the Biden Administration would be wise to heed it.

The $2 trillion Biden plan will directly reduce wages, eliminate jobs, and restrict economic growth while decreasing private market investment, ultimately causing the U.S. to become less competitive. Why is that?

Because, among several other reasons, the proposal will increase the tax burden on entrepreneurs who create the very jobs a strong economy needs by raising the corporate tax rate to 28 percent from 21 percent. Biden also plans to raise the long-term capital gains tax rate from its current 23.8% to a whopping 43.4%. (Note, the top capital gains tax rate for Chinese investors is only 20%. Yes, that means the U.S. will be punishing investors more than Communist China).

The corporate tax rate is damaging enough but that, unfortunately, is not all the Biden plan does. Among other things, it will also add a new minimum 15% tax on “book income” (income corporations publicly report on their financial statements to shareholders), increase taxes on multinational corporations based in the U.S., and undermine and weaken American competitiveness through a new international agreement between high-tax countries. (Heritage.org). It will also continue hammering the fossil-fuel industry, this time with targeted tax increases. (Recall on his first day in office Pres. Biden revoked a permit for the Keystone XL oil pipeline and also froze new leases for oil and gas drilling on federal lands and the issuance of new drilling permits).

What does all of this mean? In the simplest terms, if our federal (or state) government too heavily taxes economic activity we will have less economic activity. Taxes create a disincentive to provide or produce goods or services. For this reason, the power to tax is also the power to destroy. (Chief Justice John Marshall). Along these same lines we should also note that one of the most critical elements of job and business creation is the presence of individuals who are willing to take a risk—often a significant financial risk—that their business will succeed. The way you entice these individuals to do that is with affordable financial capital (start-up/investment dollars) to buy the equipment, lease or buy the space and/or location, and hire the people they will need to launch their business. If they cannot afford to borrow this start-up capital the business—and those jobs—will never be created.

Although we never seem to learn it, the lesson never changes when the government dramatically increases spending and significantly raises taxes the result is less economic growth, fewer jobs, and lower wages. Always. And, given that we are still recovering from government mandated Covid shutdowns the last thing we need to do is impose huge new taxes.

Taken together, these plans and the vast new taxes they include serve to put a drag on our increasingly vibrant post-Covid economy. I am hopeful that Congress will reject such harmful tax increases and instead focus on a concrete pro-growth agenda that keeps all taxes low—and job creators and job creation thriving in our economy.


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10 thoughts on “Massive New Taxes Will Cripple Economic Growth

  1. “There is supposed to be debate (on the floor) and compromise within Congress, something the GOP refuses to do anymore.” Just following the example of the Dems when Pelosi admitted to taking no action on a relief bill until after Biden was elected?

  2. I am amazed with how much money is being spent in Natchitoches Parish. Tough times are coming our way and that spent money will be needed for the parish to make ends meet. When the government money dries up, what then? The parish must
    be prudent and up excess money for future needs! The business people ought to know better. The school district has always spent every dime they have. May prudent minds prevail!

    • They are like a kid with a dollar burning a hole in his pocket! Got to spend it and in their case its on unless things! And most doesn’t benefit the tax payer that actually live anywhere in Natchitoches parish.

  3. It is ironic you would quote Ronald Reagan. He was right about a job being the best social program. He was also a real republican, with whom I did not always agree but respected. Unfortunately he was too moderate to be elected in todays environment that you embrace

  4. This administration has one main goal: to undo everything the previous administration did.

    So sad when hate is the primary motivator.

    • You mean like the last one? The ONLY reason trump even ran again, and as a republican, was because he could not stand Pres. Obama making jokes about him at a press dinner!
      As for what Pres. Biden is trying to do, yes. It costs a lot of money. But it will also begin to lift this country. People need jobs, and something more than SERVICE jobs. Rebuilding our infrastructure would provide just that. It’s called an investment in this country’s future.
      Who needs to put in a big chunk of this money? Those so-called “job creators” (they’re not) that can better afford it. How many new jobs did they create with the last break they got? Next to nil. They spent the money giving their execs bonuses and buying their own stock back.
      Maybe the GOP senators & representatives should make a attempt to work with this administration rather than again becoming the Party of No. They certainly were not concerned about money under the last administration, with permanent tax cuts to moneyed folks and temporary cuts for the rest of us. There is supposed to be debate (on the floor) and compromise within Congress, something the GOP refuses to do anymore.

      • I think you need to watch the non-fake news,go out go shopping,buy gas and see where we are compared to just a few months ago. You want to talk about Trump and Obama b.s. Buddy we and this country are in Trouble and trouble we’ve never seen before. You better wake up!

      • Something the GOP refuses to do anymore???????? How many executive orders since January? Like living in a dictatorship.

        No matter what, all these trillions are ridiculous because so much is being wasted. Lets keep watching our country crash, not be lifted up, because there is no democracy. They even want to pack the court, and end the filibuster. Greed for power and hate for trump is what fuels this administration.

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