The progressive demonization of wealth in the United States is increasingly worrisome, as Democrats intend to push for an unprecedented tax increase under the command of Joe Biden, regardless of how they disguise it or present it. Basically, the federal government is telling its citizens “wealth is bad, therefore you must now hand over half of your earnings to me.”
More specifically, the Joe Biden administration intends to raise capital gains taxes for investors from the current 20% to an astronomical 43.5% for those earning more than a million dollars a year, the figure stands at 39.6% for those earning more than $400,000 a year.
With this move by the Democratic administration, strong market investors will have to pay more than twice as much in taxes as they currently do, which will undoubtedly cripple investment and slow down the post-pandemic U.S. economic recovery.
In 18 states of the Union, the income tax will be above 50%. For example, residents of California will pay 56.65%, and in New York 52.22%, due to the addition of state tax payments. In these states, some people will have to hand over literally more than half of their earnings to the government.
In addition to this initiative to put its hands in the pockets of citizens, the Biden administration also proposes to raise corporate taxes from 21% to 28%, reversing the decrease made by the Tax Cuts & Jobs Act of former President Donald Trump, who achieved thanks to his economic measures the lowest unemployment rate in the United States for 50 years.
The new tax policies promoted by the Democrats will not only have a devastating effect on the economy, but will also continue to promote the narrative that “social justice” is achieved by plundering the property of some to redistribute to others, which in simpler terms can be defined as socialism.
The drastic economic measures proposed by the current administration will cause large investors to decide to move their capital to other markets where they will not be punished in such a way, will paralyze the creation of new companies and jobs, and will reduce the business competitiveness of the United States, as it will be increasingly difficult for American entrepreneurs and investors to take risks in the country, and invest in new projects that are solid enough to survive the regulations, operating expenses and payments to the government.
If this radical tax hike materializes, even government collection will surely decline over the next decade, as has been historically demonstrated with the Laffer Curve, as little by little these measures will generate a rebound effect in which businesses begin to close or move their jobs to more tax friendly countries, wealth will decrease, and thus precisely the opposite of what is desired will be achieved, which means less money for the government. However, the progressive narrative of punishing the wealthy for being successful will have been defeated.
Democrats claim to be pro-science, but for years they have been ignoring economic science, it is no secret that the more regulations, red tape and taxes, the more recent the economy, and yet, despite all the evidence, they continue to pour gasoline on the economic fire that is burning in the United States today.
Oddly, when Bloomberg published a tweet stating that after Biden’s announcement of taxes on the rich, the economic markets collapsed, the Democratic Congresswoman for the state of New York, Alexandria Ocasio-Cortez liked the tweet. Is she happy that the economy is starting to collapse? The question is rhetorical, the answer is known to all.
Sanders and AOC’s proposals to punish wealth win out
During the last few years, sectors of the Democratic Party have wanted to shake off the socialist label, and although Bernie Sanders and Ocasio-Cortez are not in the White House today, their proposals and policies are, since Tax the Rich is one of the main projects of the most radical wing of the party, and it is being implemented by Joe Biden himself.
Curiously, even in the countries that the most radical Democrats usually use as examples to talk about their socialist policies, they have lowered corporate taxes in recent years, with Sweden and France standing out in this section.
According to The Wall Street Journal, “if Biden’s plan becomes law, the United States would have the highest overall tax burden on corporate income (62.7%) in the OECD.”
If we continue with these dynamics, where hatred of the rich and redistributive policies are becoming more and more mainstream, we will soon hear members of the White House saying that properties and companies must be expropriated, because they belong to “the people.”
The United States fought for decades a Cold War against the Soviet Union to prevent the implementation of its model around the world. The American formula proved to be absolutely superior to that of the former communist nation. However, today it seems that the Cold War was won by the Soviets and not the United States, because despite the efforts of millions of Americans in the past to defeat communism and socialism in the world, today these policies have been installed not only within the country but also within the White House itself.