Golt’s Gulch was a secluded community of innovators and businessmen who participated in the “Great Strike” described in Ayn Rand’s book. “Atlas shrugged..” They fled to escape a society that stifled innovation, imposed excessive regulations, and confiscated the fruits of their labor.president Joe What should Mr. Biden focus on? did it Occurs when a society puts too much pressure on its most productive members—They may choose to withdraw their talents altogether.
Biden’s latest budget proposal threatens to do just that, raising the capital gains tax rate to an unprecedented 44.6%. The proposed numbers sent shivers down the spines of investors, small business owners, and economically literate people alike. What is particularly galling about this proposal is not just the sheer audacity of raising taxes, but the fundamentally flawed economic rationale underlying it.
If Biden’s policies prevail, one can only wonder how long it will be before our own “Atlas” decide to shrug their shoulders and leave us with the poorer society that kicked them out.
First, let’s take a closer look at Biden’s proposal. The increases include increasing the top personal income tax rate from 37% to 39.6% and expanding the net investment income tax from 3.8% to 5%. In effect, long-term capital gains and qualified dividends over $1 million will be taxed at ordinary income tax rates, effectively raising the top federal tax rate on these gains to 44.6%. When combined with state taxes, the total can jump to nearly 60% in high-tax states such as California and New York.
This is theft.
Consider the impact. The couple spent decades building a small business, investing their blood, sweat, and treasure, and ultimately decided to sell their life’s work when they retired. Under Mr. Biden’s proposal, the reward for years of hard work and risk-taking would be a punitive tax rate that would strip away nearly half of the profits. This is not a “tax on the wealthy.” They are robbing American employers and entrepreneurs.
The administration claims these tax increases are necessary to fund ambitious spending plans. The plan includes expanding the size and scope of the federal government to fund projects like the Green New Deal, universal health care, and sending tax dollars to fight in far-flung areas. proxy war. However, this justification rings hollow given that the United States does not have a revenue problem. There is a problem with spending.
While federal revenues as a share of GDP are near historical averages, post-pandemic spending remains above historical averages and is projected to increase to record and unsustainable levels. Biden’s tax hike proposal is a flimsy attempt to fund an ever-growing bureaucracy at the expense of the productive sectors of the economy.
Investment is the lifeblood of economic growth. Taxing investment returns more heavily will inevitably result in less returns for us and fewer jobs for hard-working American families. The Tax Foundation estimates that nearly 1 million jobs could be lost as a result of Biden’s tax hikes. Less investment means slower economic growth, fewer jobs, and slower rises in living standards. In a global economy where capital is highly mobile, such punitive tax rates encourage investment in countries with more favorable tax environments.
The Tax Cuts and Jobs Act of 2017, passed by Congressional Republicans and signed into law by President Trump, made the tax system more favorable to American companies by encouraging more investments and profits to stay in the United States and discouraging corporate flipping. succeeded in creating an environment. Biden’s tax proposals would undermine our nation’s progress and move our economy and tax system in the opposite direction.
It is worth noting that the top capital gains tax rate proposed in the United States would be more than double that of China. While China is aggressively attracting investment and striving to become a global economic power, the Biden administration appears intent on punishing success and stamping out the very investment that fosters innovation and growth.
Mr. Biden will argue that his tax is levied only on the wealthy and is a way to ensure that the wealthy pay their “fair share.” But the Biden family’s own track record of tax avoidance shows how little he believes in his own rhetoric. Joe Biden and Jill Biden avoided payroll taxes in 2017 and 2018 by classifying approximately $13.3 million in income from book royalties and speaking fees as S corporation profits rather than taxable wages. did. This maneuver allowed them to avoid nearly $500,000 in Medicare and Obamacare taxes — funds that would support the very programs Biden claims to support.
President Biden’s capital gains tax proposal represents an attack on the principles of free enterprise and individual achievement that have long been the foundation of American prosperity. If enacted, it would discourage investment, slow economic growth, and ultimately make us all poorer. This is not the path to a bright future. American citizens deserve better.
Just as the participants in John Galt’s Great Strike retreated from society, we may see the most successful Americans retreat from an economy that punishes their success. If Biden’s policies prevail, one can only wonder how long it will be before our own “Atlas” decide to shrug their shoulders and leave us with a poorer society than the one that kicked them out. you can’t.
