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Economy

8 Things You Need to Know About Democrats’ Tax Increase Bill

Congressional Democrats this week finally unveiled the legislative text of the largest tax increase in more than 50 years.

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8 Things You Need to Know About Democrats’ Tax Increase Bill

1. It Violates Biden’s Pledge, Hiking Taxes on Earnings of $50,000+
Biden has repeatedly stated that his tax package would not increase taxes on people earning less than $400,000 per year.

The official scorekeepers at the Joint Committee on Taxation show that the Build Back Better Act would in fact raise taxes on middle-income Americans.

Under the proposal, taxes would go up for families bringing home $50,000 or more per year, far below what Biden promised.

That should come as no surprise. It’s simply impossible to fund the size of government that liberals plan without major tax hikes on the middle class. Even confiscating all of the income of all businesses and high-income taxpayers would not pay for their promises.

And that result comes even as the methodology used by the Joint Committee on Taxation for its analysis tips the scale in a way that misleadingly shows a lower tax burden by counting hundreds of billions in government spending on welfare benefits as counting against people’s taxes.

While scorekeepers should be clear about the effects of transfer payments, misleadingly classifying checks from the government as a tax cut results in an analysis showing some people paying a negative average tax rate, which is illogical.

Make no mistake, this gimmick obscures the full tax burden of this bill.

2. It Hikes Individual Tax Rates, Makes Marriage Penalties Worse

The Build Back Better Act would increase the top marginal tax rate for individuals to 46.4%.

The top bracket would rise to 39.6% from 37%. It would also add a substantial marriage penalty: The higher taxes would apply to individuals earning $400,000, but apply to married couples at $450,000. 

The bill would add a new 3% surtax for all taxpayers earning more than $5 million. That comes on top of the 3.8% surtax on high earners put in place by Obamacare.

These proposals are premised on the false notion that high earners do not “pay their fair share” of taxes.

The U.S. tax code is already extremely progressive. In 2018, the top 1% of earners brought home 21% of income and paid 40% of all federal income taxes, while the bottom 50% paid only 3% of taxes. 

These tax increases will only take more money out of the private sector and harm the economic recovery. 

3. It Raises Taxes on Pass-Through Businesses

By increasing the top marginal income-tax rate, the bill would also dramatically increase taxes on American small businesses, which typically file as pass-throughs and pay taxes through the individual income-tax system.

Additionally, this plan would limit the Section 199A deduction for certain pass-through businesses and would impose the Obamacare Net Investment Income Tax on many pass-throughs as well.

Both of these would work with the other tax increases in this bill to dangerously expand the tax code’s double taxation of investment and savings.

These proposals would work to double-tax the portion of a business’s spending that is on inputs to production.

4. It Increases Taxes on Capital Gains

The bill would increase the top capital gains tax rate from 20% to 25%. These are not actually taxes on wealthy Americans. Instead, they are a duplicative layer of taxation on the added value of business activity.

That would stunt the ability of our economy to invest in expanding business operations and job opportunities. That barrier to investment and growth would also make it dramatically harder to start new businesses.

This tax hike would arbitrarily secure the position of monopolies and apply destructive pressure to small businesses. Additionally, these taxes directly harm the efforts of Americans to save for their retirement.

Additional provisions in this bill that limit the ability to save in IRAs will have similar effects, stifling retirement savings and decreasing the economy-wide investment in future productivity.

5. Its Corporate Tax Rate Is Higher Than Communist China’s

The bill would increase the federal corporate tax rate to 26.5%, more than the European average of 19.99% and more than even the 25% rate of communist China.

What’s more, these taxes are felt directly by all Americans. Business taxes necessarily show up through reduced wages, increased prices to consumers, and through diminished investment in expanding operations and employment.

Additionally, these taxes aren’t, as the left claims, just on corporate income. The tax code treats many legitimate costs of doing and expanding business as though they were profits and taxes them.

That would be akin to taxing a farmer on his purchase of seeds or an artist on her purchase of paint. These taxes are felt twice—once by diminishing the number of seeds planted or paint purchased, and secondly through smaller harvests and fewer paintings created.

This isn’t just a careless byproduct of liberal policies; it’s their goal. Double taxing the cost of doing and expanding business subtly interferes with private sector development, paving the way for central planners to decide how our economy is organized and develops.

Any tax system that directly taxes both the inputs to production and the results of those inputs unduly penalizes investment in the future. These proposed tax policies do nothing to make people pay their “fair share.” They simply stifle the private sector and, as Winston Churchill put it best, ensure the “equal sharing of miseries.”

6. It Penalizes International Trade

The bill would heavily penalize international trade, including the imports of vital raw materials to U.S. industries and exports of American products around the globe.

For example, the legislation would dramatically reduce the Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income tax deductions. This pair of tax deductions offset the burdensome U.S. tax system so that firms are less incentivized to park assets and do business outside of the U.S.

Additionally, the Global Intangible Low-Taxed Income deduction works with many other business deductions that the bill would repeal or limit to offset taxes paid overseas and to allow evenhanded tax treatment to international trade.

These massive tax hikes would exacerbate the double taxation of costs of doing and expanding business and serve as a barrier to international trade and a disincentive for firms to invest in America.

7. It Includes a Massive IRS Slush Fund

The bill would give the Internal Revenue Service a lump sum payment of $79 billion, which it would be allowed to spend over the next decade on undefined “strengthening tax enforcement activities and increasing voluntary compliance, expanding audits and other enforcement activities.”

That would effectively be a slush fund six times the IRS’ entire annual budget. The IRS had a $13 billion budget in 2021, including $5 billion for nearly 35,000 enforcement agents. 

There simply is no plausible way for the scandalridden and union-dominated agency to absorb so much extra funding and power while avoiding waste, fraud, and abuse. 

This slush fund raises the risk of returning to a politicized IRS.  The IRS has a decades-long history of overreach and abuse, from the collecting of a list of enemies of the Nixon administration to attempting to fire a whistleblower who participated in a series of hearings on IRS abuse in the Clinton administration to the infamous targeting scandal under the Obama administration to the leak of confidential taxpayer records and associating the teachings of the Bible with a political party this year.

Biden has even proposed requiring financial institutions to report to the IRS on the activities of every financial account with $600 or more, a major invasion of privacy. It would impose billions of dollars in costs that will have a disproportionately adverse impact on small financial institutions, much of which will be borne by consumers.

While it isn’t a part of the Ways and Means bill yet, some senators have discussed including it.

To be clear, everyone should pay the taxes that he or she legally owes, but the best way to encourage compliance is to simplify the tax code and reduce the burden of taxes. 

Even though the 2017 Tax Cuts and Jobs Act helped simplify the tax code and ease the compliance burden, it still took taxpayers more than 6 billion hoursand an economic cost of more than $304 billion to obey the tax laws. 

However, this legislation would go in the exact wrong direction, making the tax code more expensive, adding dozens of new provisions, picking winners and losers, increasing incentives to game the system, and making the code harder to comply with. 

8. It’s Corporate Welfare, Central Planning Through Tax Code

While the Build Back Better Act massively increases taxes to fund more government spending that House Speaker Nancy Pelosi, D-Calif., says will “transform our economy,” the bill also doubles down on political central planning through the tax code.

Favored liberal groups and corporations that hew to the left-wing agenda stand to gain, thanks to dozens of new, generous tax credits. 

Implementing provisions of the Green New Deal is a significant focus of the Build Back Better Act, with $235 billion in tax incentives for green energy. There is even a $1,500 refundable tax credit for electric bicycles, which are undoubtedly less green than regular human-powered bicycles. 

The bill would subsidize labor unions by adding a new $250 above-the-line deduction for union dues, offer higher tax credits for electric vehicles produced under union-negotiated collective-bargaining agreements, and provide bonus rates to green energy tax incentives that pay union prevailing wages. 

Newspaper journalists, a reliable liberal constituency, would qualify for a new refundable payroll-tax credit. 

Read full article on Heritage…

Economy

CNN Uses “Before Times” Rhetoric to Justify Empty Shelves

“They are laying narrative groundwork to prepare you for a world of shortages, scarcity, and incompetence.”

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CNN Uses “Before Times” Rhetoric to Justify Empty Shelves

Questions are being asked of CNN after the network used the creepy dystopian phrase “Before Times” to describe a time pre-COVID when grocery shelves weren’t empty.

The phrase appears in a report about how grocery shelves “are not going back to normal this year” as a result of labor shortages and transportation restrictions.

“If you hoped grocery stores this fall and winter would look like they did in the Before Times, with limitless options stretching out before you in the snack, drink, candy and frozen foods aisles, get ready for some disappointing news,” states the article.

Note how “Before Times” is emphasized by its seemingly otherwise unnecessary capitalization.

The dystopian language appears to be another way of socially engineering Americans to accept “the new normal,” which will include rolling lockdowns, energy crises and food shortages.

Twitter users accused the network of weaponizing language to induce fearmongering.

“They say ‘The Before Times’ like COVID is equivalent to Jesus. Absolute lunatics,” tweeted Robby Starbuck.

“Interesting way of saying that we will have food shortages in Joe Biden’s America,” remarked Harrison Krank.

Read more on Summit News

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Economy

Gas prices hit $5 in Manhattan

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Gas prices hit  in Manhattan

Gas prices are on the rise and they have hit nearly $5 for regular and are now about $5.40 a gallon for supreme in Manhattan.

A Mobil station on 11th Ave. on the West Side had the eye-popping prices on Monday evening.

Gas prices have jumped across the nation as oil prices reach a 7-year high.

The average price of gas across the country is about $3.25 per gallon according to GasBuddy and $3.31 according to the Lundberg Survey.

Average prices are up more than $1 from a year ago, according to GasBuddy data compiled from more than 150,000 gas stations across the country.    

Just eight states have average prices under $3 per gallon — Oklahoma, Mississippi, Texas, Arkansas, Louisiana, Kansas, Alabama, and Missouri, according to GasBuddy.

Read more on Fox New York

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Business

No college degree? More employers than ever just don’t care

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No college degree? More employers than ever just don’t care

If you don’t have a four-year college degree, you’re hardly alone. The majority of US working age adults do not.

You may assume you have little chance of developing a well-paying career with benefits and growth potential at a Fortune 500 company. After all, so many jobs require a Bachelor’s degree.

But your chances may be better than you think, thanks to a growing network of white-collar apprenticeship programs that lead to jobs at blue chip employers, including big tech players like Google, Amazon and Salesforce.

Such programs result in paid, on-the-job training, benefits, coaching and access to employee and alumni networks.

Facing reality

Over the past five years, employers have been trying to solve for two things:

One is a long-predicted skilled labor shortage — especially in technology. The other is the need to actively address systemic inequities and unconscious bias in their hiring and promotions practices.

To stay competitive, they’ve realized they have to broaden their search for high-potential candidates, since there is now greater recognition that no race, ethnicity, gender, zip code or diploma has a monopoly on talent.

“We’re a talent-based company. It’s our only asset. So we widened the aperture,” said Pallavi Verma, a senior managing director at consulting firm Accenture, which created its first apprenticeship program in Chicago in 2016 and has since brought on 1,200 apprentices across 35 cities. “[The program] is part of our talent strategy.”

Year Up is an organization that provides tuition-free, college-credit-eligible job training in 29 US locations. And like many nonprofits and community colleges around the country, it partners with employers, like Accenture, to find high-potential apprentices.

Read more on CNN

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