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Biden’s tax-hike plan would cost the US economy nearly 800K jobs

President Biden has proposed various policies. tax increase Targeting corporations and wealthy Americans, the tax hike could weigh on an already fragile U.S. economy, according to the Tax Foundation.

A study by the Tax Foundation, an organization that advocates for lower taxes, found that higher taxes are in place. Biden’s huge budget Over the long term, the federal spending blueprint for fiscal year 2025 would reduce economic output by 2.2% and reduce wages by 1.6%, resulting in the loss of approximately 788,000 full-time equivalent jobs.

Policies outlined in the plan “make the tax code more complex, volatile, and anti-growth, while expanding the amount of tax code spending for a variety of policy objectives unrelated to revenue collection,” the report said. Ta.

As part of his proposal, Biden called for a 25% minimum tax rate on households with assets of $100 million or more, an increase in the capital gains tax rate, a four-fold increase in the corporate stock buyback tax to 4%, and an increase in the corporate tax rate to 28%. It would raise Medicare taxes paid by wealthy Americans, introduce a global minimum tax on multinational corporations, and close the carried interest loophole exploited by private equity and hedge fund managers.

Biden targets ultra-wealthy corporations in latest tax proposal: Here’s what it says

President Biden during his State of the Union address on March 7, 2024. (Photographer: Shawn Thew/EPA/Bloomberg via Getty Images / Getty Images)

In total, the tax increases would reduce the federal deficit by about $3 trillion. The new revenue will help pay for the president’s big-ticket policies, including monthly tax credits to help some homeowners offset high mortgage payments, child care subsidies and prescription drug cuts. The money will also be used to pay for new programs.

In the case of capital gains taxes, the proposed changes would “bring the United States beyond international standards,” the Tax Foundation said.

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By taxing wealthy Americans’ capital gains as ordinary income, Biden would ultimately raise the top tax rate they pay on capital gains to 49.9%, a rate lower than the 38-member Organization for Economic Co-operation and Development. This is the most stringent standard of all.

Internal Revenue Service (IRS) building

April 17, 2023 at the Internal Revenue Service building in Washington, DC. ((Photo Credit: STEFANI REYNOLDS/AFP via Getty Images)/Getty Images)

However, an analysis by the Tax Foundation found the corporate tax proposal to be the “most detrimental” to economic growth. The budget bill would raise the corporate tax rate from 21% to 28% and roll back key parts of former President Donald Trump’s 2017 tax law. The bill also calls for raising the tax that U.S. companies pay on overseas earnings to 21%, nearly double the current rate of 10.5%.

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Tax increases on businesses are the “biggest factor in causing negative economic effects,” as they alone would reduce gross domestic product (GDP) by 0.9%, wages by 0.8%, and 192,000 full-time equivalent jobs. Research results show.

worker operating the machine

A worker operates a metal cutting machine at the Gent Machine Co. factory in Cleveland, Ohio, May 26, 2021. (Reuters/Timothy Eppel/Reuters Photo)

“Our economic estimates are consistent with the House budget, including two novel and highly uncertain large-scale tax increases on high earners and multinational corporations: a new minimum tax on unrealized capital gains. “It is likely that we underestimate the budget’s effectiveness because it excludes the under-taxed profits rule (UTPR) OECD/G20 Global Minimum Tax Model Regulation,” the report said.

Still, it is unlikely that you will receive a proposal. Support in a deeply divided Congressand faces an almost certain veto from Republicans who control the House.

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