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Biden’s 2025 Budget: Tax the Rich, Means YOU – Not Them!

President Biden fancies himself as a modern-day Robin Hood of sorts, perhaps his middle name “Robinette” is fitting for one who champions 21st century wealth distribution. Robin Hood, an icon of European folklore, is famous for robbing the rich and giving their money and possessions to the poor.

The story has been around for centuries and in some versions, the heroic outlaw is not only a thief but also a ruthless villain. According National Geographic’s, “Who Was the Real Robin Hood” a 15th century ballad called A Gest of Robyn Hode describes a “hero” who was quite vengeful, even violent.

In this version of the Robin Hood story, our social justice crusader not only shoots the sheriff with an arrow but also slits his throat. Clearly there are two sides to Robin Hood’s notorious egalitarian crusade.

Biden’s Fiscal Deception

President Biden’s “tax the rich” rallying cry has been central to his vision of economic justice. Soaking society’s well-to-do is clearly popular with Biden voters and redistributing wealth is titillating to his base. Hence, it is the centerpiece of his 2025 budget. But the massive $7.3 trillion plan touted by the president and his band of “merry men” proposes trillions of dollars in new spending and some of the highest tax burdens in the developed world — which, according to experts, does little to control spending, will irreparably damage the U.S. economy, and negatively impact everyday working Americans.

According to the Wall Street Journal,

“Most U.S. presidential budgets are exercises in fiscal deception, but even by that standard President Biden’s proposal for fiscal year 2025 sets a record for unreality. It proposes defense spending as if the world is at peace, entitlement spending that isn’t sustainable, and tax increases that would hurt the economy if they passed … Congratulations, Team White House.”1Biden Offers a Budget Fantasy

Upon release of the budget, House Republican leadership called the plan “another glaring reminder of this Administration’s insatiable appetite for reckless spending and the Democrats’ disregard for fiscal responsibility. Biden’s budget doesn’t just miss the mark — it is a roadmap to accelerate America’s decline.”2House Republican Leadership Statement on Biden’s Budget

Uncontrolled Debt and Business-Crushing Taxes

The Committee for a Responsible Federal Government, points out that the budget’s own numbers fail to address out of control government spending as “federal debt held by the public would rise from 97 percent of GDP at the end of FY 2023 to 106 percent of GDP, nearing the previous record, by 2030.”3Analysis of the President’s FY 2025 Budget

According to the Manhattan Institute, Biden’s 2025 budget further saddles the United States with “the highest sustained income tax burden in American history as a share of the economy.”4Biden unveils massive $7.3T budget

The new corporate tax rates proposed will squeeze American industry in the global marketplace according to the non-partisan Tax Foundation:

President Biden’s budget proposals would raise top tax rates on corporate income, capital gains income, and individual income to levels that are out of step with the rest of the world. Raising the corporate income tax rates from 21 percent to 28 percent, a policy Biden has pushed for since the 2020 campaign, would significantly worsen the competitive position of U.S. businesses, and reduce prospects for business investment and workers. 5Details and Analysis of President Biden’s Fiscal Year 2025 Budget Proposal

When the proposed new federal tax rates are combined with existing state taxes, the marginal tax rate on U.S. corporations becomes the second highest in the OECD (Organisation for Economic Co-operation and Development).

The National Association of Manufacturers released a study back in 2021 warning about the short-term and long-term implications of increasing the corporate tax rate to 28% and eliminating critical expensing provisions. They outlined the loss of a million jobs in the first two years, a steady decline in GDP, and a $14 billion drop in investment on equipment and structural outlays over the next seven years.6Consequences of a Higher Corporate Tax Rate

In a more recent study, the Tax Foundation estimates that Biden’s budget would reduce GDP by 2.2%, capital stock by 3.8%, wages by 1.6% and result in the loss of 788K full-time jobs.

And, despite all the talk about “fair share,” Biden’s 2025 budget punishes job-creating American factories and pro commerce businesses while providing a torrent of carve outs and giveaways, almost doubling narrow and inefficient tax breaks according to the Cato Institute:

“He [Biden] has signed into law complex and anti‐​growth increases in corporate taxes, and his current budget proposes to raise the overall corporate tax rate. Yet at the same time, Biden has signed into law an explosion of corporate welfare, including narrow tax breaks and spending subsidies in the tax code.” 7Biden Hikes Corporate Tax Expenditures 92%

Robbing the Rich and Stealing from You

The administration’s 25% “billionaire minimum tax” (wealth tax) on unrealized capital gains of high-net-worth taxpayers is equally misguided according to a report from Kiplinger:

“A wealth tax violates the long-standing American principle that we’re allowed to build wealth and grow the value of assets and that we don’t pay taxes on that growth until we dispose of the asset. In effect, a wealth tax imposes what can be thought of as a third level of taxation — after income tax and capital gains tax — on the most productive drivers of the U.S. economy.”8Why a Wealth Tax Would Be Terrible for American Taxpayers

Critics of the wealth tax contend that it will be difficult to enforce, ineffective in raising revenues, and possibly even unconstitutional.9What Is A Wealth Tax, And Should The United States Have One?And in a further blow to job creating businesses and corporations, the Taxpayers Protection Alliance warns that it will negatively impact American entrepreneurs far more than the uber-rich.

“People invest with the hopes of making money on that investment and accept they will have to pay a percentage on gains once it’s sold off. However, with repeated taxes in the interim just for holding the stock, many investments cease making financial sense. As a result, many startup companies will end up losing access to capital at a critical time. A wealth tax will end up punishing small businesses more so than the super wealthy.”10A Wealth Tax Will Curb Investment, Jeopardize Taxpayer Privacy

And, of course, the entire prospect of the IRS conducting mass audits, tracking down unrealized gains, and determining the actual tax liability of the wealthy, is nothing short of a fairytale considering their current backlog and notorious inefficiency.

Most concerning of all, however, is the degree to which a wealth tax is economically stagnating. The Manhattan Institute’s, “The Limits of Taxing the Rich” addresses the danger of further targeting successful U.S. businesses and heavily taxed wealthy Americans in search of more revenue:

“Raising every upper-income tax rate to its revenue-maximizing level — the point at which the economic damage cancels out any additional revenues — is a recipe for economic stagnation, job losses, and declining incomes. Tax-raising lawmakers should tread carefully and ensure that they do not strangle the corporate and individual incomes whose taxes they wish to depend upon.”11The Limits of Taxing the Rich

Bad Policy and Bad Economics

According to the Tax Foundation, the president’s 2025 Budget moves the tax code “further away from simplicity, transparency, and neutrality, while making the U.S. economy less competitive.”

Not only is Biden’s record-setting ‘tax and spend’ plan harmful to American industry and commerce, it fails to address the Social Security solvency crisis, or even adequately budget for national defense in a world that become markedly more dangerous and an America that has become decidedly more vulnerable.

And it brings back the notion of a wealth tax, which is both bad policy and bad economics. In “The Wealth Tax is a Poor Idea” the Hoover Institute states, that “wealth taxes less ambitious than the current crop — have uniformly failed. Defenders of the tax like Elizabeth Warren and Bernie Sanders have long claimed that it will not touch ordinary people. But indirect effects matter as much as formal tax liability, and these will touch everyone in society.”12The Wealth Tax Is A Poor Idea

Everyone includes YOU. Biden’s 2025 budget, teeming with record-setting tax hikes and what the New York Post describes as “European-style social welfare expansions on the backs of corporations and the richest 2% of families,” is Robin Hood economics. It is punitive, ill-conceived and “mathematically and economically absurd.” 13Biden unveils massive $7.3T budget

It’s interesting to note that projected revenue gains from taxing the affluent have actually fallen dramatically due to significant declines in wealth, all in the name of combatting income inequality. According to the Hoover Institute, “Pass the tax and those losses will only get larger. Killing the goose that lays a golden egg is to be expected in any system that stresses redistribution first and growth second.”

Robbing versus Borrowing

Perhaps Disney’s 1973 animated musical adventure entitled “Robin Hood” was far more prophetic than we realized more than 50 years ago in its commentary on wealth redistribution, false narratives, and ultimate outcomes:

Little John: “You know somethin,’ Robin. I was just wonderin,’ are we good guys or bad guys? You know, I mean uh? Our robbin’ the rich to feed the poor.”

Robin Hood“Rob? Tsk tsk tsk. That’s a naughty word. We never rob. We just sort of borrow a bit from those who can afford it.”

Little John: “Borrow? Boy, are we in debt.” 14https://www.imdb.com/title/tt0070608/quotes/

This article is courtesy of Priority Gold, “America’s Precious Metals Dealer.” Protect Your Money from Biden’s dangerous ‘tax and spend’ policies by exploring precious metals ownership.

 


 

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