Although it pains me to say it, I think Biden has handled the Ukraine business well so far. He did not imitate his disaster in Afghanistan, and he stuck to his stance of no American boots on the ground while finding ways to support the Ukrainian resistance. Most Americans, myself included, do not want America to be buried in a war of attrition.
That said, Uncle Joe still needs a win. His domestic policy polls continue to slide even as progressives temporarily button their obnoxious lips and grassroots liberals rush like rabbits toward the median.
The Liberal outlook isn’t rosy today, but the election is months away. There’s plenty of time for more blame and outrageous proposals from Trump, one of which is Biden’s latest tax scheme.
Uncle Joe may think he has a winner. Liberals love to stick with the rich under the banner of “paying their fair share,” as if individuals and corporations somehow design their own tax code. They don’t, of course. The government designs the tax tables and collects the revenue, but the Liberals love to energize their base with heated discussions about taxing more to reduce the deficit or whatever.
The fact is, Biden wants to raise taxes in the liberal tradition. He might advocate spending less, which might produce similar results, but that’s not happening. I wonder why.
Biden may be banking on the belief that people don’t care if taxes go up until it’s theirs. For now, he has focused on the most financially successful people in America. Part of the plan is to raise the tax rate from 37% to 39.6% for singles earning $400,000 a year and couples earning $450,000, which was the case before Trump gave relief . It’s clear that part of Biden’s goal is to negate Trump’s moves, a liberal obsession.
Another part of the plan targets the super rich who make up 1/100th of 1% of the total population. Biden thinks the government deserves 20% of the wealth collected by those earning $100 million a year. It also requires payment of unrealized gains on assets such as stocks. In other words, it is not necessary to sell a good to be taxed. How is that sound?
Of course, taxing unrealized capital gains is a regressive tax, but it could deal a serious blow to capitalism which has been a socialist goal for decades. It absolutely discourages investment and inhibits growth. Biden knows it. Bernie Sanders knows it too.
Soaking the rich would supposedly bring in $360 billion over a decade, with half of the revenue coming from billionaires. Maybe those funds would go to the specific areas outlined by the administration or maybe not. It is always tempting to spend new income on newly discovered victims.
I’m skeptical that Biden’s grand tax plan will materialize. I suspect his push for this is more flattering to the grassroots and particularly the socialist arm led by Uncle Bernie. It reeks of gadgetry, class warfare and party absolution.
On the one hand, it is a very bad idea to raise taxes in any sector when the country is already reeling from government-induced inflation and bad energy policies. Biden surely knows.
Most people recognize that Trump’s tax cuts have brought some semblance of fairness to the system. Voters generally do not view success as grounds for punishment or singling out. Americans want what’s right even if a tax hike doesn’t affect them personally. Any tax increase is a loser at the ballot box.
Income taxes are permitted under the 16th Amendment, but the taxation of unrealized capital gains is not constitutionally protected. Therefore, this part of the proposal is unlikely to hold, either by a vote in Congress or by legal challenge. Biden knows it.
Democrats barely hold the House and Senate, and this tax hike would thankfully not get any help from Republicans. One or two contrarian Democrats would sink it. Joe Manchin comes to mind. Plus, a tax ruling before the election could swing her to the Republicans. Pandering Joe knows it.
Americans are not stupid. We know that one thing leads to another, and if this proposition suddenly seems monetaryly inadequate, it’s very tempting to drop it into the middle class, where the money really is because of the extent.
Biden’s tax plan is a loser, but we have other things to consider that are more certain. In 2025, Trump’s tax cuts will expire. A Republican Congress would absolutely vote to extend them.
A Democratic Congress would let them expire and then blame Trump and the Republicans. That’s what they do.
Think about these things by November and be prepared.
Larry W. Anderson is a retired teacher.