To the editor:
Joe Biden and his economic advisers either do not understand basic economics, have not considered the repercussions of the Biden Plan or are deliberately attempting to deceive (lying to) the American people.
I would like to highlight the consequences of some of the more important points of this plan.
The Biden Plan would raise taxes on people earning more than $400,000 a year.
Although that may be a substantial income in Henry County, there are areas of America where the cost of living is much higher and this amount would be considered middle class and necessary to maintain a decent lifestyle.
It would raise taxes on corporations so that they would pay their “fair share.” As I explained in a previous letter, corporations and businesses do not actually pay income tax.
They incorporate these taxes into the cost of the goods or services they provide. It is the consumer, you and me, who ultimately pay this tax by default. Raising the tax on corporations leaves only a few options:
1. They can raise the price of their goods or services to cover the additional costs. This would fuel inflation and be most detrimental financially to those at the lower end of the income scale who spend a higher percentage of their income on necessities.
2. They can reduce the size of their workforce while still expecting the remaining employees to continue the same level of production as with more employees.
3. The other primary option is to move their manufacturing, and possibly their corporate offices, to another country. This would mean a loss of American jobs.
The displaced workers in the last two options would be unemployed and they no longer be paying personal income taxes and would be dependent on tax dollars for their support in the form of unemployment payments and other government entitlements. This would negate the effect of raising the corporate taxes.
The Biden Plan says that it would close loopholes for the wealthy and corporations. They may be able to close a few, but lobbyists would be hard at work to protect the ones that benefit their clients, mostly the biggest corporations who can afford the best lobbyists.
A few loopholes may be closed, but most of the thousands of pages of the tax code would remain as is, and a few new loopholes may even be added.
The Biden Plan would increase the income of those at the lower end of the income scale, including increasing the minimum wage and raising Social Security benefits, allegedly using money from the increased taxes on the wealthy and corporations.
Raising the minimum wage, unless a business or corporation already pays above what the new minimum wage would be, would have the same effect as raising taxes on these entities as explained above.
Those who are still employed may find they are in a higher income bracket and, unless the deductibles for personal income are corrected accordingly, there may be some who actually would have less take home pay.
With increased inflation and unemployment, many of the lowest paid employees, even though they have more money, would not be any better off, and may be worse off.
The increased inflation also would affect those on Social Security in the same way. They may have the same, or even less, purchasing power, even with more money.
The Biden Plan would not help, and may hurt, those with the lowest incomes.
This is just another name, with a few modifications, of redistribution of wealth. It has be tried several times under various names. It has had results similar to those described above in each case.
Does Joe Biden really expect different results this time?
3850 Clifty Road