(1)>>Biden's tax plan Unfortunately will hurt California & as it appears that President Biden and congressional Democrats are preparing to do just that — and in a way that will harm the very people they claim to want to help. Since entering office just three months ago, the Biden administration has scored nearly $2 trillion in new spending — with trillions more planned, in spite of the nearly $1 trillion unspent from previous pandemic relief bills. The American economy continues to experience a dynamic recovery, with even stronger economic activity anticipated through the rest of the year thanks to mass vaccinations, widespread reopening and a further unleashing of pent-up demand.Democrats like to tax things they hate, such as cigarettes and gasoline, so people will use less of each. Apparently, they don’t understand the same principle applies when applying higher tax rates to corporate and capital gains taxes as well — they will get far less of both with much higher rates.Biden’s first attempt was to raise the corporate tax rate to 28%, which will not even cover the cost in lost revenue for their repeal of the Trump SALT restrictions. Rich people in New York and California will receive most of the SALT tax-repeal benefits, not the average taxpayer.Biden’s proposal will affect anyone making over $1 million per year, which can, and will, ding hundreds of thousands of moderate-income farmers and small businesses that sell assets after a lifetime of hard work and investment. Depending on how long an asset has been held, a good part of capital gains is nothing but good old inflation, not real capital gains. While most Democrats showered praise on Mr. Biden for the expansive package, the critiques from members of both parties illustrated that infrastructure legislation, once seen as a promising area of bipartisan compromise, is unlikely to sail through this Congress with widespread support from both sides.Republicans scoffed at the breadth of the plan — which includes traditional public-works projects as well as far-reaching initiatives to tackle climate change and racial inequities in the economy — and condemned Mr. Biden’s determination to pay for it in part with corporate tax increases.“We cannot begin thinking of bills that spend trillions as the new normal,” said Representative Sam Graves of Missouri, the top Republican on the Transportation and Infrastructure Committee. California’s budget is extraordinarily dependent on those same taxpayers, with the top 1% — about 150,000 tax filers in a state of nearly 40 million — accounting for nearly 50% of the state’s general fund revenues. Much of those revenues from the state’s wealthiest residents come from their capital gains, which have increased sharply in recent years. Although the state is still coping with a severe recession from COVID-19 shutdowns, the taxable incomes of the state’s most affluent have continued to grow — in part from a surging stock market — and have generated a cornucopia of revenues. The state Department of Finance reported last week that during the first nine months of the 2020-21 fiscal year, revenues are running nearly $17 billion above the budget’s estimates, the vast majority from income taxes on affluent Californians. Mr. Biden insisted that he wanted the package to be bipartisan, but Republicans have already signaled that they would insist on curtailing it substantially, a step that there is no indication he is willing to take. California has the nation’s highest marginal income tax rate, 13.3%, which is one reason why the state’s revenues have continued to grow during the recession. Raising the top 37% federal tax rate on wages and other ordinary income to 39.6%, as Biden proposes, would push the combined marginal rate on high-income Californians to nearly 53%. So I understand that Bidens tax plan will only affect individual incomes of over $400k, but what about the increase in corporate taxes? There's fear from the opposition that corporate taxes don't truly affect the corporation as much as it eventually affects the consumer. I guess I'm looking for a rebuttal to this point. I can totally envision a major multi million dollar company getting taxed more, but increasing their prices while finding more reasons to go offshore. Billionaire press touting Biden as surprisingly liberal while totally ignoring someone who's actually liberal ... hmmm on taxes .
NOTES AND COMMENTS:
(1)>>Biden's tax plan Unfortunately will hurt California . President Joe Biden’s plan to ramp up the income tax rate and capital gains tax rate as part of a $1.8 trillion stimulus plan would hit high-tax states like New York and California the hardest, while New Mexico and Mississippi would be least affected. California politicians often portray the state as a “nation-state” that’s largely independent, but as Biden’s proposals demonstrate, Washington calls the tune on tax policy and California must dance to it. California the hardest, while New Mexico and Mississippi would be least affected, according to research from the Institute on Taxation and Economic Policy.Biden’s proposal to restore the top personal income tax rate to 39.6% and remove capital gains and dividend breaks for millionaires in tax year 2022 would affect 0.7% of taxpayers, according to the ITEP report released .
