President Joe Biden and Democrat leaders across the country have been relentless in pushing forward a barrage of taxing and spending bills over the last year. Now, more than ten months into the Biden Administration, we’ve seen over $5 trillion in total spending pass through the Democrat-controlled Congress. But Americans are getting worried that with all this spending and tax increases on the horizon, the money has to come from somewhere, and it will probably be all of us. Americans are also starting to feel the effects of rising inflation, supply chain delays, and labor market shortages, causing real concern that maybe all of this spending and tax hikes aren’t really such a good idea, especially when we’re trying to emerge from the COVID pandemic. Nevertheless, Congress is set to move forward on President Biden’s marquee tax and spending plan in the coming weeks, the so-called “Build Back Better” (BBB) plan, and he might not get everything he wants as Congress continues to waffle on major tax proposals.
The single biggest reason why Congress continues to waffle on major tax hikes is that the tax increases under consideration are so massive and broad-based that they hurt everyone, not just the “billionaires” that the Democrats say they are going after. Democrats are looking at an unfriendly, to say the least, electoral map for 2022 and are rightly concerned about doing even more damage to their re-election chances by taxing their middle-class constituents. According to an analysis by the Joint Committee on Taxation, Congress’s non-partisan scorekeeping, Americans who have an annual income of $40,000 or more will be severely penalized, in stark contrast to President Biden’s pledge not to raise taxes on those making less than $400,000.
For “Michael Canty, president of Alloy Bellows & Precision Welding, Inc. near Cleveland, Ohio., Biden’s tax proposal equates to a 33 percent increase in taxes for his business, which is structured as a C corporation. Canty would like to grow beyond his staff of 85, but instituted a hiring freeze for fear of tax increases and an increasingly complex regulatory environment. Increased taxes that stifle job creation are an awful prescription for our country,” wrote Ian MacLean, the U.S. Chamber of Commerce’s Small Business Council and president of Highland Landscaping, LLC in an Op-Ed for The Hill.
That’s why so many Americans oppose the Democrat’s proposals, even those within the President’s own party. “Throughout the last three months, I have been straightforward about my concerns that I will not support a reconciliation package that expands social programs and irresponsibly adds to our nearly $29 trillion in national debt that no one else seems to care about,” Senator Joe Manchin (D-WV) said in a statement in early November. “Nor will I support a package that risks hurting American families suffering from historic inflation,” he said.
The President’s BBB plan originally proposed spending $3.5 trillion. House Speaker Nancy Pelosi (D-CA) said she wouldn’t put a bill to a vote that wouldn’t pass the Senate, and after months of intense negotiations between the White House, House leadership, and Senators Manchin and Kirsten Sinema (D-AZ), they were able to reduce the price tag down to $2.2 trillion, as passed by the House just before Thanksgiving.
However, the Senate is still expected to make changes to the BBB as passed by the House, leaving little time in the calendar for the House to pass it a second time before Congress goes on Christmas break for the rest of the year. With so much opposition mounting by American families and small businesses and within the Democrat party itself, Congress may continue to waffle on the President’s economic agenda well into 2022.
Bob Carlstrom is President of AMAC Action.