President Biden praised Democratic lawmakers’ potential multitrillion-dollar tax hike.
In a speech delivered at the White House on September 16, Biden argued that a recent proposal from his Democratic allies in Congress would make the federal tax code more equitable by forcing wealthy Americans to “pay their fair share.”
The potential $2.9 trillion in new taxes closely follows an attempt to pass the Commander-in-Chief’s $3.5 trillion social welfare agenda. Among other items, the revenue proposal suggests raising the income tax, the corporate tax, and the investment tax, as well as establishing an additional surtax on wealthy Americans.
President Biden commented:
Big corporations and the very wealthy were doing very well before the pandemic. That’s why I’ve said — starting back in my campaign for president — that it’s not enough just to build back; we have to build back better than before. And that’s how it all begins.
I’m not out to punish anyone. I’m a capitalist. If you can make a million or a billion dollars, that’s great. God bless you. All I’m asking is you pay your fair share. Pay your fair share just like middle-class folks do. But that isn’t happening now.
President Biden’s remarks wrongly claimed that the wealthy do not already pay their “fair share.” Indeed, high earners provide the vast majority of federal revenue.
As The Daily Wire’s Ben Johnson detailed in August, Internal Revenue Service data from 2018 show that the top 1% of American income earners paid more in federal income taxes than the bottom 90% percent of income earners combined. Additionally, 61% of all American taxpayers paid no taxes last year, and the bottom half of taxpayers paid less than 3% of all income taxes.
Biden also claimed that only wealthy Americans will pay more taxes:
We’re not going to raise taxes on anyone making under $400,000. That’s a lot of money. Some of my liberal friends are saying it should be lower than that. But only corporations and people making over $400,000 a year are going to pay any additional tax… Not only will no one making under $400,000 see their taxes go up, the middle class are going to get some tax cuts — some breaks.
However, a recent analysis from Americans for Tax Reform notes that many small businesses — which account for over 65 million private-sector workers — will be affected by the new taxes.
Boosting the top income tax rate from 37% to 39.6%, for example, would “increase taxes on businesses organized as pass-through entities like sole proprietorships, LLCs, partnerships and S-corporations” — a legal status that applies to 95% of America’s 26 million businesses. In the same vein, 1.4 million small businesses are organized as C-corporations — and would therefore be impacted by higher corporate tax rates suggested by the Democrats’ proposal.