Our View: Biden plan takes aim at high-earning tax evaders
The richest Americans should pay their fair share to support a system from which they benefit most of all.
By The Editorial Board
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It’s popular in some circles to say how unfair taxes are to the people who work hard for their money. And they’re right.
While most workers have to document every dollar earned or risk the ire of the Internal Revenue Service, some of the richest Americans and corporations fail to pay their fair share as a matter of course, costing the U.S. Treasury hundreds of billions of dollars a year.
Biden s tax and spending plans are laying the groundwork for an economic disaster Administration s lack of candor makes price tags seem smaller than they really are Follow Us
Question of the Day
ANALYSIS/OPINION:
This may shock you, but the Biden administration is not telling the complete truth, or really much of the truth at all, when it comes to its proposed tax and spending increases.
Equally surprising, the lack of candor is designed to make both the tax increases and the spending increases appear smaller than they actually are.
The dissembling comes in four flavors.
TOP STORIES
First, rather than the $2.25 billion price tag that has been talked about in the media for the last few weeks, the actual cost of the “infrastructure” plan is more like $3 trillion. As is now the pattern for this administration, it announced the “infrastructure” plan in general and partial terms, leaving out important details, especially those about the
We can do it without increasing deficits, said President Joe Biden during his first joint address to Congress, April 28.
During 2019, the entire U.S. budget was $2.7 trillion for all programs, Social Security, Medicare, national defense, etc. One global pandemic, and understandable deficit and recovery spending later, the Biden Administration has proposed $6 trillion in new spending in 100 days, above the current $3 trillion already on the books. Granted that some of these increases will phase in over a period as long as a decade, but even the former budget director in the Obama Administration acknowledges the current proposals represent a roughly 50% increase in the size of the federal government, and this is largely prior to expanding spending on health care. Though I am neither a fan of big government, cradle-to-grave programs, nor tax increases (for anyone), I am reasonably certain that there are not enough wealthy and affluent Americans nor major corporations to over-tax and
Income Tax Increases on the Wealthy
The Biden Administration proposes to increase income taxes on
the wealthy and provide more resources to the IRS to enhance
compliance. The headline increases relate to taxing capital gains
and qualified dividends at the top ordinary income tax rates and
the elimination of the step up in basis rule.
Increase Top Income Tax Rate. The rate would
be increased to 39.6 percent (from 37 percent) for taxpayers within
the top 1 percent.
2 Note, the 39.6 percent rate was the top
rate in effect prior to the Tax Cuts and Jobs Act of 2017
(TCJA).
Subject Long-Term Capital Gains and Qualified Dividend
Income Tax Increases on the Wealthy
The Biden Administration proposes to increase income taxes on the wealthy and provide more resources to the IRS to enhance compliance. The headline increases relate to taxing capital gains and qualified dividends at the top ordinary income tax rates and the elimination of the step up in basis rule.
Increase Top Income Tax Rate. The rate would be increased to 39.6 percent (from 37 percent) for taxpayers within the top 1 percent.
2 Note, the 39.6 percent rate was the top rate in effect prior to the Tax Cuts and Jobs Act of 2017 (TCJA).
Subject Long-Term Capital Gains and Qualified Dividend to Ordinarily Income Tax Rates. The rate applicable to long-term capital gains and qualified dividends would be increased to 39.6 percent for households earning more than $1 million. A long-term capital gain derives from assets that are held longer than a year. A qualified dividend is an ordinary dividend that meets specific criteria to be taxed at the curr