If President Joe Biden gets his way, working families will suffer the brunt of his business tax hike, not corporations. The liberal puppet and his administration are not telling Americans that large companies learned long ago to outsource jobs and evade tax liability by offshoring profits.
“Those with a high proportion of domestic earnings are directly affected by the rate increase while multinationals are likely to focus more on the changes to the minimum tax on foreign income,” Dave Zion of the Zion Research Group reportedly said.
It’s abundantly clear that massive corporations continue to influence Democrat policies. These multinational corporations profited from globalist trade policies that were all-the-rage beginning with disgraced ex-Pres. Clinton and grew even worse during the Obama years. The number of manufacturing plants employing 500 or more Americans plummeted from 3,322 in 1998 to 2,072 in 2015. Large factories with more than 1,000 workers were nearly cut in half, from 1,504 to 863 during that period.
Former President Donald Trump began the slow process of rebuilding U.S. manufacturing in 2017. Although the country made steady gains under Mr. Trump’s leadership, Biden now wants to follow the failed policies of Clinton and Obama. After Mr. Trump lowered the business tax from a debilitating 35 percent to a competitive 21 percent, Biden is pushing hard to increase it to 28 percent. He will effectively pull the rug out from under the U.S. economy and kill jobs.
Zion indicated that Biden’s attack on businesses large and small would likely result in S&P 500 outfits suffering a 10 percent earnings loss. That hit would result in companies trimming workforces and streamlining costs through outsourcing. Experts say that Biden’s 28 percent number has zero basis in sound economic facts. His mouthpiece failed to deliver any facts when questioned.
“I would say that the reason why the president is proposing these corporate tax increases is because that’s just the right thing to do,” Biden economic advisers Cecilia Rouse reportedly said. “He believes we should be… encouraging these corporations to pay their fair share.”
The Democratic Party has trolled out this tired propaganda line time and time again in an effort to vilify big businesses that don’t donate to their left-wing agenda. The facts are that Biden is merely signaling that American-based companies are enemies of his party because they typically support Republicans. That being said, experts recognize that working people will suffer higher unemployment rates, depressed wages, as well as increased costs at supermarkets and gas pumps.
“The economic literature shows that corporate income taxes are one of the most harmful tax types for economic growth, as capital investment is sensitive to corporate taxation,” a report from the Tax Foundation reportedly states. “The corporate income tax raises the pretax return firms required to pursue investment opportunities, reducing the pool of investments that firms find worthwhile to pursue. This lowers long-run economic output, reducing wages and living standards.”
As it stands, Republicans and even moderate Democrats currently oppose the tax hike. Big corporations will pivot to avoid paying by moving production to tax-friendly China, among others. Small local businesses won’t be able to avoid the hit and working families feel the sting of higher prices, lost jobs, inflation, and depressed wages.