Biden's Tax Plan is a Lose/Lose for American Families

Tax policy changes promoted by President Biden and Capitol Hill Democrats can be boiled down to a simple explanation for American families: You can support their liberal, oppressive government policies or protect your paycheck.

You can only pick one.

Although the disingenuously named “American Jobs Plan” proposed by White House and Congressional Democrats is a federal program, its provisions hurt most at the state level.

Many analysts believe our struggling manufacturing sector and its employees will be hardest hit by the AJP, particularly the top three manufacturing states of Ohio, Michigan and California.

In 2017, these states alone produced more than $504 billion in manufacturing output. Ohio is only the 34th largest state, but the third largest producer of manufactured goods. Eight percent of California’s workers are manufacturing based, and Michigan is still the king of cars.

Their tax burdens are already high, as California, Ohio and Michigan are ranked at 10, 16, and 24, respectively, for states taxing residents the most. While California’s per capita income is lifted by wealthy Hollywood liberal elites, Ohio and Michigan are in the lowest half of national per capita income.

What liberals don’t want Americans to know is there is no such thing as corporate taxes —  it’s not a fee, it’s a pass-through. Every dollar the U.S. government charges American businesses is paid for by workers and shoppers.

Biden’s plan will result in workers losing benefits, hours and raises. According to the National Association of Manufacturers, these Democrat polices will cause the loss of one million jobs in the first two years.

Shoppers will pay more at the store as increased corporate taxes come directly from their wallets. Experts notice with alarm that these liberal tax changes are a “sure recipe for inflation and eventual recession.”

The success of our domestic economy is tied to our businesses’ ability to compete globally. When an American company loses jobs overseas, we also lose them at home. One policy that has kept our companies competitive in recent years is the Global Intangible Low Tax Income (GILTI) levied on US multinationals on important off-shore assets like trademarks and patents. Democrats want to raise this tax to 21 percent from roughly 12 percent.

Simply put, the higher the GILTI, the less likely US manufacturers and service companies will bring overseas dollars home to spend here. A GILTI increase, combined with President Biden’s corporate tax uptick from 21 to 28 percent, is a kitchen cupboard disaster.

We all must understand that these nerdy-sounding policies apply to everyone. Liberals will try to pass tax changes with incendiary phrases like “stick it to corporations!” or “companies must pay their fair share!” and not tell Americans the truth about how these policies will harm their families.

The politics of envy never put a loaf of bread on anyone’s table. Wealthy executives and CEOs do not pay these taxes — you do.

Americans’ ongoing attempts to recover economically and personally from an unprecedented pandemic create new reasons that make tax increases irresponsible to the point of economic criminality. These include food hardship, housing insecurity and rising unemployment.

Even the left agrees.

The Center For Budget and Policy Priorities is a left-leaning economic policy institute. Based on recent Census data, it identified a huge spike in on-going food hardship related to COVID economics.

Its data shows nearly 10 percent of American households (3.4 percent in 2019) do not have enough food. The problem is worse for Black and Latino households and families with children. CBPP attributes this to COVID job losses and supply disruptions that increased the price of food and other goods.

The group found that 15 million Americans — 25 percent of renters — are behind on housing payments with nearly five million fearing they will be evicted. Those statistics are also worse for people of color and households with children.

April employment numbers reported more than 700K fewer new jobs than expected and March’s were adjusted down. The unemployment rate went up slightly to 6.1 percent. America still has eight million fewer jobs than it did before COVID.

Into this hardship and instability Democrats want to insert their greedy hands into our jobs and family budgets. Most low-income families do not pay federal income taxes, but they do work —and purchase food and household products.

Liberal Democrats are catering to their progressive anti-corporate base with this plan and laying the cost of their future political support on the backs of hardworking Americans.

People in manufacturing states like Ohio, California and Michigan may be the first to suffer, but won’t be the last. Soon the negative financial impacts of these policies would be felt at every dinner table across America.

The response of every American to these tax hikes should also be simple: no.

J. Kenneth Blackwell is the former Ohio State Treasurer, and Kerri Toloczko is a Senior Fellow with Institute for Liberty.