Tag Archives: President Biden’s tax policies

Taxing Those That Keep The Economy Growing

Posted on by

On Sunday, NewsMax posted an article about President Biden’s tax proposal.

The article included some comments by former President Donald Trump’s White House economic adviser Larry Kudlow.

The article reports:

“Why would Joe Biden put out a budget that raises taxes 36 times?” Kudlow lamented to Sunday’s “The Cats Roundtable” WABC 770 AM-N.Y., adding a rebuke of Biden’s proposed “confiscation of wealth by taxing unrealized capital gains.”

“He is attacking the businesses that hire the workers, and he’s attacking the investors who come up with the new technologies and innovations that make America great, and he’s also attacking the fossil fuel companies that would get us out of this oil mess,” Kudlow continued to host John Catsimatidis. “I don’t understand the budget.”

“Why do you want to undermine the prosperity by jacking up taxes on everything that moves?”

And all this comes as Biden is burning the strategic oil reserve for “political price-fixing,” according to Kudlow.

“He is depleting a third of the strategic reserve for political price-fixing,” he said. “That’s all it is. It’s not going to work.”

It is merely a temporary solution to a system problem Biden energy policy has created – predictably – Kudlow said.

“It’s a drop in the bucket,” he said. “The strategic reserve is there in case you have a national emergency such as a hurricane blowing up Texas oil fields.”

Biden’s war on energy is bad policy for economics and the environment, Kudlow concluded.

“We could supply the whole bloody world with liquefied natural gas and stop the dirty coal in China and India,” he said, “if we had a sensible policy.”

Larry Kudlow is asking some very good questions and has some very good solutions to some of the problems we are currently facing.

A Bridge Too Far

Posted on by

On Tuesday, The Hill reported that Senator Joe Manchin has stated that he does not support President Biden’s plan to tax the unrealized gains of billionaires, which would set a new precedent by taxing the value an asset accrues in theory before it is actually sold and converted into cash.

The article quotes Senator Manchin:

“You can’t tax something that’s not earned. Earned income is what we’re based on,” he told The Hill. “There’s other ways to do it. Everybody has to pay their fair share.”

“Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned,” he added.

Manchin’s opposition means Biden’s proposal is likely dead only a day after the White House unveiled it.

It could be significantly restructured to avoid taxing unrealized gains, which would pose the big challenge of trying to make up the lost revenues.

The article notes:

The problem with taxing just the regular income of billionaires is that many of the nation’s richest individuals, such as Jeff Bezos and Elon Musk, have been able to pay little or nothing in income tax by not declaring income.

Instead, the ultra-rich often can take out loans secured by the value of their assets to finance their lavish lifestyles.

“Here’s what they do. They go to their accountant. They tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die.’ And nobody knew anything about that years ago, and now people are pretty up on it,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has announced his own proposal to tax the unrealized gains of billionaires.

Wyden says that imposing a minimum 20 percent tax on billionaires is about making sure they pay a similar percentage of their wealth in taxes as middle-class Americans.

Raising taxes does not generate revenue–lowering taxes generates revenue. All that raising taxes does is give Washington bureaucrats more money and thus more power. The Democrats need to study the Laffer Curve.

The Impact of President Biden’s Tax Policies

Posted on by

In April 2014, The Tax Foundation reported the following:

The tax code is huge and complex. But how huge and complex is it?

Andrew Grossman, the legislation counsel for the Joint Committee on Taxation that helps write tax laws, attacked us in Slate yesterday for saying that the tax code runs 70,000 pages, countering that it’s “only” 2,600 pages.

So how long is the U.S. tax code really? There are a couple ways to look at it.

Statutes

There’s the literal statutes that Congress has passed (Title 26 of the U.S. Code). The Government Printing Office sells it spread over two volumes, and according to them, book one is 1,404 pages and book two is 1,248 pages, for a total of 2,652 pages. At perhaps 450 words per page, that puts the tax code at well over 1 million words. (By way of comparison, the King James Bible has 788,280 words; War and Peace runs 560,000 words; and the Harry Potter series is just over 1 million words.)

Statutes and Regulations

However, a tax practitioner who relies just on the tax statutes will go to jail, because so much of federal tax law is in IRS regulations, revenue rulings, and other clarifications. Congress will set down a policy and leave it to the IRS to write all the rules to implement it. These regulations aren’t short: the National Taxpayer Advocate did a Microsoft Word word count of the tax statutes and IRS regulations in 2012, and came up with roughly 4 million words. Again at roughly 450 words per page, that comes out to around 9,000 pages. The National Taxpayer Advocate also noted that the tax code changed 4,680 times from 2001 to 2012, an average of once per day.

The tax code is that large and that complex due to the efforts of lobbyists in Washington, D.C. Money talks. Corporations and foreign governments know how to get around laws limiting their gifts (bribes) to Congressmen, and Congressmen know how to earn money through investments in areas of the economy (and other countries) influenced by their decisions. It’s not right, but it is what is.

Yesterday Newsmax posted an article about some recent comments made by former Trump Chief Economist Larry Kudlow about President Biden’s tax proposals.

The article reports:

Former Trump Chief Economist Larry Kudlow says President Joe Biden’s tax plan is an “assault on investment.”

“There’s some pretty tough headwinds ahead if these taxes, which are an assault on investment … and the people they are going to hurt the most are the middle class, the blue collar middle class, [who will bear] 70% of the burden of the corporate tax, which includes the capital gains tax, 70% of that burden falls on the blue-collar middle class. Make no mistake about that Biden rhetoric notwithstanding,” Kudlow on Sunday told John Catsimatidis on his radio show, “The Cats Roundtable ” on WABC 770 AM.

When corporate profits are down that means less investment, less capital, which results in less family income, he explained.

“You’re going to take about 20 to 25 percent of corporate profits down. Now, that means less investment, that means less money to payout wages, that means less money to purchase new machinery and equipment to enhance productivity, and that means family incomes are gonna go down. That’s the cap gains tax, which runs through corporate profits taxes,” said Kudlow.

Because of Biden’s tax plan, over time, the Gross Domestic Product (GDP) will drop 1 percentage point, “this is not good,” he added.

The article concludes:

Under former President Donald Trump’s economic principals “we’re in a boom,” he said.

“This economy is in good shape because right now before new legislation. Tax rates are low, and the regulatory burdens are low, and we still have energy independence,” he said.

Kudlow asked, “Why would you start taxing the daylights out of an economy that is roaring ahead? I don’t get it.”

“Don’t use your ideology from the left to smother this boom for heaven sakes–use common sense,” he said. He continued; this is ideology. This is a progressive left wing ideology tax. The rich redistribute incomes to build up a new great society, a social welfare state, he said.

Hang on to your wallet. Tax and spend is here for at least three more years unless conservatives take over Congress in 2022.