Biden’s New Budget Would Hike Taxes and Wage Class Warfare
Budgets are about priorities. In President Joe Biden administration’s new budget, its apparent priorities are marred by problems. Here’s the cheat sheet version: Rather than containing explosive growth in spending, it would use a bunch of new taxes to wage class warfare.
While this budget is dead on arrival in Congress, it’s worth reviewing some reasons why this is so. The president aspires to spend around $6.9 trillion next year, a 55 percent increase over pre-pandemic levels, and $10 trillion by 2033. While Biden hopes to raise an extra $4.7 trillion over 10 years in taxes, the debt would nevertheless grow over the next decade by $19 trillion as the debt-to-GDP ratio increases from 98 percent to 110 percent. All this debt in a high interest rate environment would have Uncle Sam fork over $10.2 trillion in interest payments alone over that time.
Adding to this fiscal calamity is that Social Security benefits could be automatically cut by some 20 percent within the next decade or so if the program is not reformed. Biden does propose to reform Medicare, but his means are class warfare taxes, price controls, and transfers from the general fund. There are no improvements to the program’s own finances. So Biden’s seemingly aggressive plan fails to solve one of the biggest budgetary challenges we face as a country going forward.
Instead, the budget suggests all kinds of ways to raise tax revenue, many of which would fail to do even that.
In our system, no matter how high tax rates have been, the federal government has never managed to capture more than 19 percent of GDP for long. This constraint means that if Washington decides to spend over 25 percent of GDP, American taxpa
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