Democrats’ socialist tax and spend bill — five things the liberal media won’t tell you
Build Back Better includes several tax giveaways to reward loyal Democratic special interests like big labor, green energy and the liberal media
By Grover Norquist FOXBusiness
House Democrats have passed their socialist tax and spend “Build Back Better” plan, and now Senate Democrats are trying to rush the bill through with little deliberation before the end of the year. What are they trying to hide?
Here are five things you need to know:
- $80 Billion in IRS Funding to Audit and Harass Taxpayers
The bill contains an additional $80 billion in taxpayer dollars for the IRS, which will be used to hire 87,000 new agents.
This proposal includes almost $45 billion for tax enforcement (audits, investigations), which is 23 times the funding for taxpayer services (just $1.93 billion). The bill provides funding for the IRS to study the creation of a government-run tax preparation system, which will further consolidate power in the federal government.
President Biden and Senate Democrats are also trying to insert bank account snooping back into the bill, which would give the IRS new power to automatically access bank accounts, Venmo, Paypal, and CashApp account inflows and outflows for all business and personal accounts with more than $600 in total deposits and withdrawals for what it describes as a “comprehensive financial account reporting regime.” This would inevitably increase audits on taxpayers making less than $400,000 per year.
- Tax Increases on Working Families
The bill includes $800 billion in tax hikes on American businesses, including a 15% domestic minimum tax on “book income” that would disallow important, pro-growth tax deductions. It also includes a 15% global minimum tax that will make America less competitive and will ship jobs overseas. These tax increases will not be paid by “large, profitable” corporations as the Left claims, but by working families. When your employer has less money, there is less to pay you.
How bad is this tax for workers’ pay?
The Joint Committee on Taxation estimates that 25% of the corporate tax falls on workers while the Tax Foundation estimates that 70% of this tax is borne by labor. Similarly, a 2020 study by the National Bureau of Economic Research found that 31% of the corporate tax falls on consumers through higher prices.
Inflation is already increasing prices faced by American families. The consumer price index increased by 5.4% on an annualized basis in September, matching a 13-year high, according to the Bureau of Labor Statistics (BLS). In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4%.
- Highest Income Tax Rates in the Developed World
American taxpayers will soon pay the highest income tax rate in the developed world and the third-highest capital gains tax in the developed world. As noted by the Tax Foundation, this tax increase would see the U.S. have an average combined federal/state individual income tax rate of 57.6%, which is the highest in the Organization for Economic Co-operation and Development (OECD). Taxpayers in New York would pay a top tax rate of 66.2%, while taxpayers in California would pay a top tax rate of 64.7%.
Similarly, this tax would increase the top capital gains tax to 37%, resulting in the U.S. having the third-highest capital gains tax in OECD. Taxpayers in some states would pay a top rate exceeding 40%.
- Price Controls and Taxes on American Medicines
The legislation includes price controls and a 95% excise tax on American medical innovation that will threaten access to new cures and existing manufacturing jobs. This proposal allows government bureaucrats to impose price controls on up to 20 medicines in Medicare Part B and Part D. If the manufacturer does not accept this government set price, they are hit with a 95% excise tax on the total revenues of the drug.
The coronavirus pandemic has proven the need for strong medical innovation, but the Democrat plan would mean the next generation of cures may never be developed. It will also threaten existing jobs across the country that rely on medical innovation.
Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.
- Tax Giveaways to Left-Wing Special Interests
Democrats have included several tax giveaways to reward their loyal special interests like big labor, green energy and the liberal media.
The bill creates a tax credit for electric vehicles. However, in order to receive the full $12,500 credit, companies must be unionized.
There’s also an additional tax deduction for up to $250 to subsidize “dues” to a labor organization. Most unions spend much of this dues money supporting progressive politics. These tax dollars will be recycled back to support the Democrat congressmen voting for this bill.
In addition to the $12,500 EV credit, the bill includes a credit for “electric bicycles” that can be claimed each year. The plan also includes multibillion-dollar grants and credits for the promotion of “environmental justice,” energy efficient fixtures like windows and doors, and a “green workforce.”
The bill even includes a “subsidy” of up to $12,500 for each reporter employed by “local newspapers” with up to 1,500 employees. East Germany used to tell newspapers what to print. Biden’s government program will pay them. This corruption of the media has already begun to work. Has your local newspaper criticized this spending bill? Have they even mentioned their personal conflict of interests?
Grover Norquist is president of Americans for Tax Reform.
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