When Joe Biden took the White House in January, he promised that he wouldn’t raise taxes on most Americans. However, he did plan on hiking taxes on corporations and the wealthy.
The President has continued to push this plan in recent months, and he’s campaigning for a second infrastructure bill that includes these promises.
But sources say Biden’s tax plan might already be on life support.
Biden intends to raise the corporate tax rate from 21 percent to 28 percent, and the top individual tax rate from 37 percent to just under 40 percent (39.6%).
Former President Donald Trump had slashed the corporate tax from 35 percent down to 21 percent, in an effort to entice large companies to keep operations on American soil.
And while the current POTUS wants to bring that tax rate back up, economists worry that any tax increases now could have devastating consequences on a country trying to rebound from the pandemic.
That’s why the administration’s plan seems to be grinding to a halt.
As The Daily Wire stated, citing a CNBC
President Joe Biden is campaigning hard for a second ‘infrastructure’ bill that contains a number of significant tax increases on corporations and American taxpayers earning around $400,000 and above, but the bill is swiftly ‘losing momentum,’ and the fight to pass a major tax hike in Biden’s first term could be ‘over.’
Republicans remain dead-set against tax increases, and many Americans also aren’t interested in hearing about tax hikes right now (even if those increases only hit corporations and the rich).
According to Tony Fratto, a Treasury official with the George W. Bush administration, “the chances of big tax reform in the near term seem reduced.”
Fratto says that while the battle isn’t lost yet, Biden has a tough road ahead:
I don’t want to say that the fight is over on that quite yet, because I know that there are still proponents of that. But I think that they are hard fights.
On the corporate side, coming out of the economic situation we’ve been in, you can make a case that you don’t want to squelch the return to growth and job creation, when there are still many millions of people out of work relative to pre-COVID.
The President highlighted his tax plan for weeks following his inauguration, and he obviously wanted it to be a big building block in his legacy.
But in this case, his timing might be off.
Economic experts and analysts have predicted that any tax hikes could hurt wages in the short term, and even top-tier Democrats (like Sen Joe Manchin) have come out against tax increases.
The bottom line is that in the current environment, much of the country simply doesn’t want to consider giving more money to the government.
If President Biden wants to get this through, he might have to wait a while. At least until the country is well clear of the pandemic and the business environment isn’t so murky.
In the meantime, many Americans remain concerned about rising gas prices, the general cost of living, and the possibility of future lockdowns. So maybe now isn’t the best time to talk about taxes.
Instead, perhaps the focus should be on getting everyone back to work, and getting the country rolling again.