NO NEW TAXES!
As directed by President Joe Biden, Democrats in Congress are now calling for the largest federal tax increase in the United States since 1993.
As customary, the Democrats are trying to market their tax hikes as “only targeting corporations and the wealthy.” They are relying on the mainstream media to push this message frequently to the American populace in the effort to cause the American people to believe that the Trump Tax Cuts only benefited big business and the super wealthy.
At first glance, hiking taxes of corporations seems impressive. Who doesn’t want large conglomerates to pay their fair share? Like most things, however, the issue is far more complex.
While it is true that the Trump Tax Cuts reduced the corporate tax rate from 28% to 21% as well as helped boost corporate profits, the Democrats continue to overlook and downright ignore how this move did benefit middle and lower middle class Americans.
For decades, the United States has imposed upon its businesses one of the highest corporate tax rates in the world. Rather than boosting tax revenue and curtailing these companies’ profit margins, many corporations have instead elected to shift their production along with their jobs overseas to cheaper markets, such as China. Prior to the Trump tax cuts, the United States continued to see drastic manufacturing plants around the United States shuttered and subsequently causing the loss of many higher paying blue collar jobs to disappear. As a result, the blue collar workers were left without employment and looking for answers. In fact, prior to the pandemic, under President Trump, US manufacturing jobs and production levels increased at their highest pace in decades (See Charts).
Furthermore, rather than helping the” rich get richer” and increasing the wealth gap, the Trump Tax boosted middle-class wages to their highest point in over a decade. In fact, prior to the pandemic, US median household income was up $4,144 or a staggering 6.8%. Also, contrary to the Democrat narrative is that during Trump’s term, the lowest-earning quartile of workers saw the biggest wage increases in a decade. The bottom 25% of workers saw their wages increase by 4.5% by 2020, while the top 25% of earners saw their wages grow less than 3%.
Still, there is yet another reason why electing to raise the corporate tax rate back to 28% right now will end in disaster for the ordinary hardworking Americans.
As our nation finally begins to emerge from the COVID19 pandemic, many businesses, both large and small, are on life support, especially those in Democrat-led states like California. Unfortunately, all of these businesses were subject to almost yearlong draconian economic shutdowns.
Let me be crystal clear. I do not have an issue with large corporations being asked to pay their fair share in taxes, but I do take umbrage with hasty decisions that may appear innocent on the surface, but would result in catastrophic job and wage losses for Americans who need economic security the most. Rather than imposing a blanket tax increase on all corporations, in an effort to fight back against some of the biggest conglomerates in America, we should focus on those corporations that continue to outsource their jobs and production overseas at the expense of the American worker and taxpayer. Building upon the message and work of former President Trump, we should direct our desire to “stick it to the man” at corporations that are actively moving overseas to avoid taxes and keep labor costs down. Targeted measures like this will not only put a dent in these companies’ bottom lines, it will also force them to either bring their production and jobs back to the United States, or suffer massive financial penalties. As we saw during the Trump years, many companies will choose the former and begin to produce and hire domestically.