Enjoy Tax Day 2021. They Just Get Worse From Here.
Happy Tax Day! True, April 15 is a bit less momentous than usual this year, because the IRS and many state revenue agencies extended the deadline for filing tax returns and making payments to accommodate economic troubles caused by the pandemic and lockdowns. Still, those of us accustomed to the usual date can’t help but dread the coming of mid-April. This year, that dread is even more appropriate if you recognize that taxation is theft and anticipate rougher muggings than usual in years to come, courtesy of the Biden administration’s ambitious tax proposals.
“Democrats have spent the last several years clamoring to raise taxes on corporations and the rich,” Jim Tankersley and Emily Cochrane noted for The New York Times in March. “Now, under President Biden, they have a shot at ushering in the largest federal tax increase since 1942.”
Such a dramatically large tax increase is impressive, but what’s even more impressive is that it still isn’t enough to cover President Joe Biden’s spending plans. “Aides suggest his proposals might not be entirely paid for, with some one-time spending increases offset by increased federal borrowing,” added Tankersley and Emily Cochrane.
In fact, “the largest federal tax increase since 1942” is sufficient to cover only a small part of the trillions of dollars in spending already passed and under consideration by the federal government.
“Biden plans to splurge $11 trillion in additional spending over a decade,” Reason contributing editor Veronique de Rugy observed earlier this month. “Meanwhile, his proposed tax hikes are estimated to reap $2.1 to $2.8 trillion. In other words, for every $5 or $6 in new spending, $1 will be paid for in new taxes, and the rest goes on the nation’s credit card.”
That’s a double whammy of pain, because there are costs to both higher taxes and soaring debt.
The easiest sell for the administration is a big hike in the corporate tax rate, because seemingly everybody is angry at corporations right now and they’re relatively faceless, easy targets. The president proposes to raise the corporate tax rate from the current 21 percent, which is about the middle of the pack among developed countries, to 28 percent, which is more than triple Switzerland’s 8.5 percent and almost twice the 15 percent charged by Canada (Canadian provinces and Swiss cantons also impose additional taxes, just like U.S. states).
Aware that such a high tax rate might make the United States an unattract
Article from Latest – Reason.com