Read the story here. Advertise at Before It's News here.
Profile image
By Points and Figures (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

Backdoor Tax on The Middle Class and Poor

% of readers think this story is Fact. Add your two cents.

Yesterday President Biden unveiled his infrastructure plan.  Trllions, but only $157MM dedicated to infrastructure.  It’s typical of the pork we see in Washington and why our national debt continues to balloon.  By the way, in negotiation you are trained to put out as wild a proposal as possible first so that everyone anchors on it.  Then, when it’s negotiated down, you get what you really wanted.  In this case, establishment Republicans will crow how they got the bill down and how much money they saved on the deficit when we all know that the deficit will balloon.  We also know the GDP multiple of government spending is close to zero so the money will just line cronies pockets and little will get done to help the commoners.

How does Biden propose paying for it?

The wealthy and corporations of course!

The funny thing is that for “not doing their fair share”, it’s worth remembering the top 5% of income earners pay most of the taxes in the US.  60%!

It’s great soundbite politics.  Wealthy politicians like Illinois governor JB Pritzker and Secretary of Climate John Kerry and Senator Mark Warner say, “Tax me more.  I am rich.  I should pay more in taxes.”  Meanwhile, they structure their estates and domiciles to make sure they pay the minimum in taxes.

By the way, when you are as wealthy as the above people, most of your income doesn’t come from actually working.  Your nest egg makes you money and you pay at the long-term capital gains rate.  If the wealthy that wanted to pay more in tax really wanted to pay more, they could just send it in.  But, even when you ask the leftiest of the lefty’s who advocate for higher taxes their response is usually, “I won’t do it unless everyone else has to do it.”

I would wager that most people do not understand accounting well enough to understand the true ramifications of tax bills.  I don’t think they truly “get” it when taxes go down or up how the incentives change.  Taxes truly are economic incentives for behavior. That’s why climate change advocates grab their pitchforks and demand extra taxes on fossil fuels or carbon credits to charge against taxes.  It’s also why pro-life advocates grab their pitchforks and demand better tax treatment for children and families.

Why did wages go up under Trump?  Huge decrease in the corporate tax rate and the ability of those multinational corporations to bring funds sitting in offshore accounts back to the US.  Trillions came back to the US under Trump.  Prior to Trump, corporations barely repatriated $500B.  The academic finance research on corporate tax rates is lower corporate tax rates result in higher wages. Higher after-tax income and lower tax rates change the internal corporate hurdle rate for domestic corporate investment.   Companies increase wages to employees, and they also invest more in property, plant, and equipment spurring more employment for more employees.

Ain’t capitalism great?!

Remember, almost everyone in America pays tax at what is known as the Hauser Rate.  That’s due to all sorts of factors.

Let’s take a quick peek at the Biden tax plan and see how he is proposing to change the tax code.

  • Corporate tax rates would go up from 21% to 28%.  But that’s not all.  Corporate inversions would be banned.  This is where a company changes its domicile to benefit its shareholders.  Multinational corporations would be subject to a minimum tax of 21%, making it one of the highest in the entire world.  That means lower wages for workers, and higher prices for consumers as corporations pass on the cost.
  • Income tax top rate would go to 39.5%.  This is a disincentive to making money.  Making money is associated with higher production and higher standards of living.  Having more money also is equal to more freedom.  Crushing to the middle class.  This higher rate would also affect lots of small businesses causing them to lay off, not hire new, or pay employees less.
  • Payroll taxes would increase.  That takes money right out of middle-class workers’ paychecks.
  • Significantly higher capital gains taxes.  This is a disincentive to investment.  It also causes non-productive or degraded assets to freeze in portfolios. Why sell to someone who can turn it into a productive asset increasing productivity and employment when you can cheaply hold and do nothing?  Higher capital gains will also not be viewed well in the stock market.
  • Taxing unrealized gains at death.  When you die, you have estate taxes you might have to pay.  If you hold stocks, assets or anything else in your estate, your heirs must value it at the current value and pay the tax on the gain even if you don’t sell.  Remember, Congress bipartisanly moved to aggressively tax retirement savings passed on to heirs last year.  Of course, you will have to pay someone to revalue all the assets along with paying Uncle Sugar the assessed taxes on the new valuation.
  • Boosting the estate tax.  If you have an estate of $3.5MM, you get aggressively taxed at 45% upon death.  Remember, you already paid a lot of tax on this as you built your nest egg.   Of course, multi-millionaires and billionaires won’t because they can afford fancy accountants and lawyers to avoid the tax.  But, an upper-middle-class person that has saved their entire life won’t be able to avoid the tax.  Their heirs will get crushed.

Ignore all the chatter about how if you make less than $400,000 a year, you will be fine.  The average person will be fleeced blindly just by the proposed change in corporate tax policy, the change in payroll taxes, and increasing the highest tax rates.

Combine the increased taxes with the flood of illegal immigrants and change in other immigration policies and it will put downward pressure on wages.  The other thing that has been a huge disincentive to work is the hefty transfer payments the government has paid during Covid.  Anecdotally, my friends that run big and small companies are finding it really hard to get anyone to work even at higher wages since they make just as much staying home.

What tax policy should do is create incentives to work and incentives to invest.  President Biden does none of that and in fact, creates disincentives to work and invest.  It’s as if he just wants everyone sitting at home alone with a mask on.  That couldn’t be it could it?

The post Backdoor Tax on The Middle Class and Poor first appeared on Points and Figures.


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Humic & Fulvic Liquid Trace Mineral Complex

HerbAnomic’s Humic and Fulvic Liquid Trace Mineral Complex is a revolutionary New Humic and Fulvic Acid Complex designed to support your body at the cellular level. Our product has been thoroughly tested by an ISO/IEC Certified Lab for toxins and Heavy metals as well as for trace mineral content. We KNOW we have NO lead, arsenic, mercury, aluminum etc. in our Formula. This Humic & Fulvic Liquid Trace Mineral complex has high trace levels of naturally occurring Humic and Fulvic Acids as well as high trace levels of Zinc, Iron, Magnesium, Molybdenum, Potassium and more. There is a wide range of up to 70 trace minerals which occur naturally in our Complex at varying levels. We Choose to list the 8 substances which occur in higher trace levels on our supplement panel. We don’t claim a high number of minerals as other Humic and Fulvic Supplements do and leave you to guess which elements you’ll be getting. Order Your Humic Fulvic for Your Family by Clicking on this Link , or the Banner Below.

Our Formula is an exceptional value compared to other Humic Fulvic Minerals because...


It Always Tests at 9.5+ pH

Preservative and Chemical Free

Allergen Free

Comes From a Pure, Unpolluted, Organic Source

Is an Excellent Source for Trace Minerals

Is From Whole, Prehisoric Plant Based Origin Material With Ionic Minerals and Constituents

Highly Conductive/Full of Extra Electrons

Is a Full Spectrum Complex

Our Humic and Fulvic Liquid Trace Mineral Complex has Minerals, Amino Acids, Poly Electrolytes, Phytochemicals, Polyphenols, Bioflavonoids and Trace Vitamins included with the Humic and Fulvic Acid. Our Source material is high in these constituents, where other manufacturers use inferior materials.

Try Our Humic and Fulvic Liquid Trace Mineral Complex today. Order Yours Today by Following This Link.

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Total 1 comment
    • Anonymous

      How can you possibly whine about this when Trump just gave the rich a three trillion dollar tax cut? Are you NUTS? It’s time people started to wake up.

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.