Last week Speaker Pelosi attempted to ram through a debt limit hike, an infrastructure bill, and a $3.5 trillion dollar spending and tax hike bill all at the same time. Luckily for the American people, her plans went over like a lead balloon with the rest of the conference, who are increasingly hearing from their constituents, including AMAC members, about the need to stop the reckless spending and halt the attempts to raise taxes on America’s small businesses.
Even still, many in the administration and Democrat party continue to push for tax hikes that would kill jobs and hurt the economy. That’s because Democrats see the current moment as a unique window in time to raise taxes. Currently, Democrats have slim but unified control of Congress, and many of President Biden’s approval numbers are to say it politely – completely in the tank. Many self-fashioned “moderate” Democrats are becoming nervous that their seats may be in jeopardy during next year’s mid-term elections. Leadership is becoming understandably nervous about fumbling the Biden agenda and feeling a great deal of urgency in pushing whatever they can muster through Congress before 2022 – a year in which many political handicappers predict Democrats could easily lose the House and claw to keep control of the Senate. The Sanders and Manchin wings of the party continue to have it out over the remaining agenda.
Senator Sanders (D-VT) hoped to hold Democrats’ feet to the fire to pass a $3.5 trillion spending and tax hike bonanza. So far, his ambitions are being cut back and watered down as Senator Manchin (D-WV) insists he won’t support that amount of additional spending. Senator Kyrsten Sinema (D-AZ) is also publicly expressing her discontent with the spending and tax increases proposed by the administration and is coming under public attack for doing so. Saturday Night Live, which is clocking historically low ratings as the writers, as much of the cast continues to expose themselves as unabashed partisan leftists, attacked Senator Sinema publicly for not agreeing to the laundry list of leftists priorities being pushed by Sanders. The pressure is on from Democrats and the media, but I repeat myself.
Congress remains at a standstill as party leaders for the Democrats attempt to walk the tight rope between demands from the base to raise taxes to historic highs and moderate Democrats who are getting an earful from constituents back home and are seeing their poll numbers rapidly falling. So far, Democratic leadership has taken a “throw everything at the wall and see what sticks” approach to governing. Proposals range from Green New Deal policies to huge tax increases on small businesses and many making less than $400,000, breaking a key tenet of President Biden’s campaign pledge not to raise taxes on the middle class. Plans to hike the death tax, roll back small business tax cuts passed under Trump, and increase some taxes on individuals making less than $400,000 will all have the effect of shrinking the economy. At a time when small businesses are working hard to lead the economy out of economic ruin, tax increases are a horrible idea.
Even raising the corporate tax will have a negative effect on wages, jobs, and prices for consumers. The Joint Committee on Taxation, Congress’s official scorekeeper on tax issues, finds that at least 25% of the burden of corporate tax increases taxes falls on labor – translation: raising the corporate tax rate will fall at least partly on workers. Is now the right time to cut workers’ salaries? White House Press Secretary Jen Psaki’s assertion that it would be “ridiculous” for businesses to not completely absorb tax increases is more tone-deafness from an administration clearly short on economic understanding.
The fragile economy, combined with a number of small businesses hanging on by a thread, should be enough to deter any proposed tax increases. But because leaders of the Democratic party know they may have limited time to impose these harmful tax increases and more welfare spending on the American people, they persist in pushing their leftist agenda forward. The party’s ambitions are increasingly running into the reality of an uncooperative Congress, though, and it won’t be long before voters have the chance to take the Speaker’s gavel away from Pelosi and demote Chuck Schumer to Senate minority leader.
Bob Carlstrom is President of AMAC Action