AMAC Exclusive – By Andrew Abbott
President Joe Biden has consistently billed himself as the champion of the poor, promising to make the wealthy “pay their fair share.” During his 2020 campaign, he pledged that he would not raise taxes on families that made less than $400,000 a year. And according to the technical definition of the word “tax,” he has so far largely kept that promise (although Democrats have yet to pass their massive reconciliation bill which looks to be loaded with tax hikes). However, even if Middle Class Americans haven’t yet seen a direct tax increase under Biden, his policies are creating one of the largest financial squeezes of working- and middle-class families in history.
Instead of direct taxes, the effects of Biden’s policies have resulted in several “hidden taxes” which disproportionately affect individuals and families in lower income brackets. The most obvious of these is inflation, which reached a 13-year high in September. While many wealthy Americans have heavily diversified investment portfolios that can keep pace with raging inflation, most middle- and working-class Americans rely on savings accounts or live paycheck to paycheck. For them, such sky-high inflation is devastating. As much was reflected in data for wage growth over the past year, which showed that, while wages have increased in recent months for some groups, the actual buying power of those wages has decreased over the past year due to inflation. That’s a hidden tax.
Despite this obvious fact that inflation primarily affects lower income Americans who pay a larger portion of their after-tax income on everyday needs, the Biden administration continues to insist otherwise. Earlier this month, White House Chief of Staff Ronald Klain retweeted and shared a thread from former Obama Economic Council Chair Jason Furman, calling inflation a “high-class problem.” He suggested that it was a good thing and a sign that the country was on the right track. The Independent Women’s Forum fact-checked this claim and gave it “four unicorns: False. Completely make-believe.” They noted:
“The White House’s suggestion that the struggle to pay for gas, home heat, clothes, and groceries are a ‘high-class problem’ is not only false but insulting and out-of-touch. The rich have plenty of cash to pay a few bucks more. Working Americans, meanwhile, are getting squeezed.”
Moreover, despite the Biden administration’s claim that inflationary pressure is “transitory,” economists say that it’s not going anywhere anytime soon. According to the U.S. Bureau of Economic Analysis, prices for food, gas and most consumer goods are increasing at a higher rate than “at any point this century.” They further predict that price surges will continue well into 2022. While economists disagree on the exact cause, leading experts from both sides of the aisle are expressing extreme concern and agree that monetary policy in America – which under Biden is essentially limitless spending – needs to be reined in and reexamined.
But instead of heeding that warning, Biden and Congressional Democrats are still plowing ahead with plans for trillions of dollars in additional government spending. Any first-year economics student knows that injecting such astronomical sums of money into the economy will only make inflation worse, not better.
The Biden administration’s energy policies have also put an added strain on middle- and working-class families as oil and gas prices soar. After cancelling the Keystone XL pipeline and ending oil and gas exploration on many public lands, the U.S. is now once again dependent on foreign energy suppliers after President Trump made the country energy independent. New burdensome regulations haven’t helped either. While it costs the same for a billionaire and a minimum wage worker to buy a gallon of gas or heat their home, lower-income Americans have a smaller pool of income to start out with, meaning that they now must spend a higher percentage of it on fuel and energy bills, while the rich feel the pinch far less.
Although the Biden administration has desperately tried to shift the blame for the nation’s economic struggles, public polling shows that Americans aren’t buying it. According to the FiveThirtyEight polling average, Biden’s approval rating sits at just 43.2%, while 51.1% of Americans disapprove of the job he’s doing. Even worse for Biden and Congressional Democrats, 71% now say the nation is heading in the wrong direction, including nearly half of Democrats. Biden is also underwater with women and minorities, two demographics Democrats will need if they hope to have any chance of retaining control of Congress next year or the White House in 2024. While other failures like the ongoing border crisis and the disastrous pullout from Afghanistan are undoubtedly playing a role in Biden’s spiraling popularity, the economic woes plaguing the country are one issue that has a direct impact on the lives of the vast majority of people.
Regardless of concerns that Biden’s agenda might be at odds with the interests of average Americans, his team is unmoved. This week, CNN’s Jake Tapper asked Treasury Secretary Janet Yellen if Biden’s policies “were essentially pouring gas on the inflation fire?” She outright dismissed these concerns and asserted that the current inflation would naturally decline over time. While continuing to insist his policies of government spending, re-regulation, and tax hikes are evidence of Biden’s commitment to the poor and middle class, all available evidence suggests otherwise.
Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.