Biden makes a case against his own reelection by promising de facto tax hike on working families
How sad that our current president is driven by partisanship rather than by doing what’s in the best interest of Americans — even if it means giving a nod to Trump’s masterful tax policy.
It’s odd for a president to make the case against his reelection. But President Joe Biden is doing just that as he’s out on the stump promising Americans he will allow Trump-era tax cuts to expire.
“That tax credit of his expires next year,” Biden told an applauding crowd in Washington at the North America’s Building Trades Unions National Legislative Conference on April 24. “Well, let me tell you something: It’s going to stay expired and dead forever if I’m reelected.”
Biden is referring to the Tax Cuts and Jobs Act President Donald Trump signed into law in 2017, and which has been an absolute boon. First, the law cut the U.S. corporate tax rate to 21%, down from 35%. The act also allowed businesses to fully deduct most new domestic investments.
The cut brought the U.S. tax rate in line with 38 countries in the Organisation for Economic Co-operation and Development, making America more competitive on the world stage. By 2018, one of America’s largest corporations, Apple, announced it was repatriating $38 billion in taxes and creating 20,000 new jobs in the U.S.
Apple was hardly an outlier. A 2023 study from economists associated with the National Bureau of Economic Research and the U.S. Treasury Department found that the Tax Cuts and Jobs Act increased both domestic and foreign investments made by U.S. multinational companies.
More money in the economy creates more jobs at higher wages. At least two million Americans received bonuses in the years following 2017. Tax cuts also doubled the child tax credit, which benefited more than 800,000 working families in Pennsylvania.
The issue isn’t the corporate tax rate — that does not expire. Biden’s promise to let tax cuts expire for individuals and small businesses will crush working people already suffering under the boot of Bidenomics.
The largest beneficiaries of the Tax Cuts and Jobs Act here in Pennsylvania were people making between $25,000 and $50,000. These working men and women saw their taxes slashed by just over 24%. Those making between $50,000 and $75,000 got a 20% cut. Those in the higher income brackets of $75,000 to $100,000 paid 17.4% less in federal taxes. Those making over $1 million got just under a 12% cut in federal taxes.
This meant small businesses that are not corporations also received these benefits. That is significant, and should not have been lost on the building trades crowd.
“We raised wages, yes,” said Allen Cohen, a managing partner of New Hudson Facades, which makes glass and aluminum facades that cover skyscrapers. Located in Delaware County, Cohen’s company was also able to use the benefits from the tax cuts to ensure every factory employee received an additional $3,000 in their 401(k).
Today, thanks to soaring inflation under Biden, all that progress is in jeopardy. The president’s promise to let the Tax Cuts and Jobs Act expire could have catastrophic effects on working families in Pennsylvania.
According to the Tax Foundation — a bipartisan group focused on improving lives through tax policy — the typical family of four making $85,000 would be forced to pony up nearly $1,700 more in taxes if the Tax Cuts and Jobs Act expires. And a single dad of two kids making $52,000 a year? He’d have to find an extra $1,500 in his disposable income to pay Biden’s de facto tax hike.
This is the worst possible time for Biden to cause more economic pain to Americans. Real wage growth in the U.S. has declined during this presidency. And, according to a survey conducted in November by GoBankingRates, nearly half of Americans have less than $500 in their savings accounts. Even more Americans, 60%, said they have less than that amount in their checking accounts.
People are already living paycheck to paycheck. What Biden is proposing could spell economic doom, not just for the economically vulnerable, but also for the middle class.
But that doesn’t seem to faze the president. Biden’s obstinacy can be seen as both pandering to his tax-and-spend base and nose-thumbing to his White House rival.
How sad that our current president is driven by partisanship rather than by doing what’s in the best interest of Americans — even if it means giving a nod to Trump’s masterful tax policy that helped so many people prosper.