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Biden Hikes Corporate Tax Expenditures 92%

Posted on Monday, April 8, 2024
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by Outside Contributor
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Biden-Signing-Documents

Politicians often say one thing but do another. President Biden rails against tax breaks for big corporations, and the White House boasts that Biden “has fought to build a fairer tax system that … asks big corporations and the wealthy to pay their fair share; and requires all Americans to play by the same rules.”

But Biden has signed into law three bills with vast subsidies and narrow tax breaks for big corporations. These were not across‐​the‐​board tax cuts that simplified the tax code, but rather a mess of complex loopholes with special rules for favored industries.

How large are Biden’s special‐​interest corporate breaks? The US Treasury issues annual estimates of “tax expenditures” or loopholes showing the size of each tax break. This official tally of tax expenditures is biased but can provide a rough measure of the change in narrow breaks over time. Let’s compare the corporate breaks under Presidents Biden and Trump.

The Treasury projects tax expenditures for 10 years, so I choose six years of overlap between the Trump and Biden figures, fiscal years 2024 to 2029. The chart shows the annual average total corporate tax expenditures as measured today, and as measured four years ago in the last year of Trump’s tenure. Since then, Biden has signed into law many new and expanded breaks, particularly in the Inflation Reduction Act with its massive subsidies for energy companies.

President Biden has increased annual average corporate tax expenditures 92 percent from $109 billion to $209 billion. Thus Biden has almost doubled narrow corporate breaks, despite all his rhetoric about fairness, fair shares, and people playing by the same rules.

The chart includes both tax cuts and tax provisions that provide outlays to companies. Tax‐​code outlays have increased from $0.3 billion a year projected under Trump to $29 billion a year under Biden. These are the red boxes at the top of the two bars.

Biden administration policies on corporate taxes are the opposite of fairness. He has signed into law complex and anti‐​growth increases in corporate taxes, and his current budget proposes to raise the overall corporate tax rate. Yet at the same time, Biden has signed into law an explosion of corporate welfare, including narrow tax breaks and spending subsidies in the tax code.

Rather than pursuing low and equal tax rates for all businesses, Biden’s misguided approach is to impose punitive treatment on most businesses while handing out subsidies for the select few.

Data Notes:

  1. US Treasury projections of tax expenditures under Trump (FY2021) and Biden (FY2025) are available here. Summing the expenditures does not account for interactions between the provisions, so these totals are only a rough gauge of the overall size of the breaks.
  2. The Treasury does not split the outlay part of tax expenditures between corporate and noncorporate, so I’ve estimated the corporate outlays using the tax cut shares of each provision.
  3. US Treasury estimates of tax expenditures are biased in numerous ways, as I discuss here.
  4. Adam Michel discusses Biden’s energy tax subsidies here.

Chris Edwards occupies the Kilts Family Chair in Fiscal Studies at Cato and is the editor of Down​siz​ing​Gov​ern​ment​.org. He is a top expert on federal and state tax and budget issues. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.

Reprinted with Permission from The CATO Institute – By Chris Edwards

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.

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Joe
Joe
3 months ago

Another anti-Trump fiscal policy that will only result in passing the tax increases down to the consumer, layoffs of American workers, and outsourcing services to foreigners you can’t understand when you call the customer service line. Way to go, Traitor Joe!

David Millikan
David Millikan
3 months ago

Excellent article with REAL information and data.

Trampled_by_Skunks
Trampled_by_Skunks
3 months ago

What a disaster Biden has been for this country. January 20th can’t come soon enough.

Deni Fortuna
Deni Fortuna
3 months ago

The timing of the tax changes, which are only for ‘favored’ sectors, smells like backroom deals for support for the President’s campaign. This is how corruption looks. One-sided favoritism that does not serve the nation’s corporate structure at all.

Frances
Frances
3 months ago

Just another step in the planned destruction of America that Biden has been doing since day 1.

Joanne 4 justiice
Joanne 4 justiice
3 months ago

This factual article reinforces the lying, ,cheating game playing behavior of dirty Dems! Touche ! Bravo!

Ken Paul
Ken Paul
3 months ago

Everything with Biden is a sham, a deal, a quid pro quo. Crony capitalism is all he knows. He is more a mafia don than a national leader.

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