Detroit News editorial: Biden spends badly on the economy
President Joe Biden marked his first 100 days in office last week by presenting a massive spending plan, along with massive tax increases that would only partially cover costs while inflicting significant damage to the economy. His plan would also harm those the president claims to be helping: families.
In his first speech to Congress on Wednesday, Biden strayed further from his campaign promises to bring the country closer. Adding billions in new spending and slapping prosperous businesses and Americans with heavy taxes, the president says he’s more concerned with appeasing progressives in his party than finding a consensus to move the country to- beyond the pandemic. Even moderate Democrats have expressed hesitation.
The amount of spending the federal government spent last year to fight COVID is already astronomical. About $ 5.3 trillion went to direct payments, small businesses, and states. Biden just signed the latest $ 1.9 trillion relief package, but got no GOP backing. US debt stands at $ 28 trillion.
However, the president is only warming up. Two new spending proposals – the “United States Plan for Families” and the “United States Plan for Jobs” – would stack more than $ 4 trillion. Some of the spending that is actually spent on infrastructure projects might get bipartisan buy-in. Still, the plans read more like liberal wish lists and are unlikely to gain Republican support.
Biden called these joint plans unique investments to restructure the economy. But if Democrats push this through, it could have the unpleasant effect of hampering the economy, job creators and families at a time when they are already fragile. As usual, the wealthy and corporations are the target of further tax hikes.
The plan for families would invest billions in child care, universal preschool, paid family leave and “free” community college, and Biden calls for paying for all of it in part by doubling the tax on children. capital gains at 39.6% from the current rate of 20% for those earning more than $ 1 million per year.
Biden has promised that no one who earns less than $ 400,000 will see a tax hike, but if all of these spending priorities are passed, there’s no way the middle class won’t be affected.
The president also called for the federal corporate tax rate to rise to 28% from the current 21%, which would also have an impact on small businesses.
“This tax hike would lower wages, cost jobs, hurt economic growth, reduce investment and make America less competitive,” according to an analysis by the Heritage Foundation. “Make no mistake about it, rising corporate taxes are hurting real people.”
In addition, Biden advocates a harsh inheritance tax by removing the “ramp-up” provision that allows heirs to avoid capital gains tax when they inherit assets, such as stocks and shares. goods whose value has appreciated under the previous owner.
“If that goes into effect, you’ll see a lot of Michigan farms, cottages and small businesses being dismantled and sold,” Patrick Anderson, director of Anderson Economics Group, said in an email. “It’s only on paper that it’s not heartless.”
These negative consequences of the great gifts offered must be taken into account. We hope Biden will return to his promises of bipartisan government.