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Psaki dice que es «injusto y absurdo» que las empresas aumenten sus precios a raíz de la suba de impuestos

Psaki Says Company Price Rises ‘Unfair and Absurd’ in Response to Tax Hikes

White House Press Secretary received a multitude of criticism on social media for ignoring basic economic concepts

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White House Press Secretary Jen Psaki said on Tuesday, September 28, that it is “unfair and absurd” for businesses to raise their prices so that consumers are the ones mitigating the effects of higher taxes.

A reporter asked Psaki if President Joe Biden was factoring in the price hikes as a direct hit to the pocketbook of less well-off taxpayers, considering that the president made a promise that he would not raise the tax burden on citizens earning less than $400,000.

“I want to ask you about what Republicans are pointing to in the analysis from the Joint Committee on Taxation. They say, according to — if I’ve read the chart correctly, more than 16 percent of taxpayers would see their taxes increase under the bill that’s approved by the House Ways and Means Committee. Will the President sign that bill if — as if — it is coming out of that committee? Or will he insist on the changes so that he will maintain his commitment that taxes won’t go up on people making $400,000 a year?,” the reported asked.

“Obviously, the President’s commitment remains not raising taxes for anyone making less than $400,000 a year,” Psaki responded. “There are some — and I’m not sure if this is the case in this report — who argue that, in the past, companies have passed on these costs to consumers. I’m not sure if that’s the argument being made in this report. We feel that that’s unfair and absurd, and the American people would not stand for that.”

Strong reactions against Jen Psaki

The official’s words did not go unnoticed and quickly caused repercussions on social networks.

“It’s common sense that businesses have to pass on the higher costs of tax increases. The costs of higher taxes harm workers with less pay, consumers with higher prices, and shareholders with lower value in their retirement accounts,” responded on Twitter the well-known think tank The Heritage Foundation.

“Despite his repeated promises (with no fact checking from the mainstream media), the official Congressional Scorekeepers have shown that YES, Biden’s tax hikes WILL increase the tax burden on families taking home $30,000 per year or more. FAR less than the $400,000 he promised,” continued The Heritage.

“Economics is hard,” mocked Rep. Dan Crenshaw (R-TX) on Twitter.

“This is amazing. I mean it’s just a thing that happens. If a restaurant has a profit margin of $9K a month and you raise its taxes by $10K a month, do you think the owner will say ‘damn, we gotta lose money every month’? or do you think they’ll raise prices?” explained Jonah Goldberg, editor-in-chief of The Dispatch and also a columnist in other media outlets.

FEE’s Brad Polumbo told Psaki that “economic reality doesn’t care whether you think it’s mean or not.”

While the press secretary poses a moral dilemma where she attacks businesses for “raising prices” on taxpayers and not assuming their tax burdens, the reality is that it is a necessary dynamic to maintain economic-business stability and avoid major evils such as business closures or layoffs.

psaki
White House Press Secretary Jen Psaki speaks during a press conference in the James S. Brady Press Briefing Room at the White House in Washington, DC, United States. (Image: EFE)

Adam A. Millsap, in an article for Forbes, explains this phenomenon very well: “It is important to remember that corporate taxes must be paid by people. Any corporate tax increase will be paid by either shareholders/owners, employees in the form of lower wages, or customers in the form of higher prices.”

“A study from 2016 finds that shareholders/owners bear around 40% of state corporate income taxes while employees bear 30 to 35%. So, even though corporate tax increases are not levied directly on workers, they still affect workers indirectly by lowering their wages” Millsap explained in his column.

“There is strong evidence that corporate tax increases cause worse economic outcomes at the state level. At a time when unemployment claims remain high and thousands of firms are still in survival mode, it seems imprudent to raise corporate taxes at the federal or state level.”

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