Today the Goldwater Institute joined a coalition of over 120 center-right organizations, activists, and state lawmakers in opposition to the numerous tax hikes on American families and businesses included in the $3.5 trillion reckless tax-and spend reconciliation proposal being considered in the U.S. Congress. Numerous tax increases in the legislation include:
· Raising the corporate tax rate to 25 percent or 28 percent, a rate higher than Communist China
· Doubling the capital gains tax to 43.4 percent
· Raising the top rate to 39.6 percent
· Creating a second death tax by eliminating step-up-in basis
· 95 percent excise tax on pharmaceutical manufacturers if they fail to accept government set price controls
· Repealing the deduction for foreign-derived intangible income
· Raising taxes on carried interest capital gains
· Raising the tax rate on GILTI to a top rate of 26.25 percent and requiring it to be calculated on a country-by-country basis
· Imposing a 15 percent minimum tax on book income
· Retroactively capping the conservation easement deduction
· Repealing numerous oil and gas tax provisions including the deduction for intangible drilling costs (IDCs)
· A tax on American energy manufacturers based on their methane production
· A carbon border tax
· Capping Section 1031 like-kind exchanges
Millions of small businesses will see higher taxes through the increase in the corporate tax and the top marginal income tax rate. In addition, the plan to repeal step-up in basis will raise taxes on family-owned businesses across the country.
Democrats have also floated retroactive tax increases on the American people. For instance, the Biden budget calls for retroactively increasing the capital gains tax. This is a terrible idea – retroactive tax policy changes the rules on taxpayers after the fact. It is fundamentally unfair and erodes confidence in the tax system.
Many of the tax hikes being pushed by the administration violate President Biden’s pledge not to raise taxes on any American earning less than $400,000 per year. A recent analysis by the left-of-center Tax Policy Center found that the tax hikes proposed in President Biden’s budget will raise taxes on 74.1 percent of middle income-quintile households in 2022. In addition, a report by the Joint Committee on Taxation found that over the long-term, approximately $100 billion of the corporate tax increase would be borne by taxpayers making less than $100,000.
Now is one of the worst times to raise taxes on American families and businesses. We are still over five million jobs short of pre-pandemic levels. In addition, inflation is running rampant and increasing prices for families and businesses across the country.