Biden’s Proposal for Higher Spending and Higher Taxes Threatens a Full Economic Recovery

For Immediate Release

Contact: David Williams (202-258-6527)

Washington, D.C. – The Taxpayers Protection Alliance (TPA) expressed alarm about the number of costly provisions set forth by President Biden during his address to a joint session of Congress. These proposals cost trillions of dollars and are accompanied by a series of tax hikes that would devastate the economy, just as the end of the pandemic seems in reach.

In response, TPA President David Williams offered the following analysis of the speech:

“As President Biden acknowledged in his address, job numbers are beginning to rise and the economy is rebounding. That is precisely why his litany of trillion dollar proposals – along with a laundry list of tax hikes – is a dreadful idea for the American economy.

“President Biden read off a laundry list of new spending proposals that will do little to help struggling Americans or the economy. One of his cornerstones of ‘rebuilding the economy,” is devoting billions of dollars to green energy programs. This green spending will sink the country deeper in the red and be a massive corporate welfare giveaway.

“Biden also touted transportation provisions of his proposed infrastructure package. A focal point – and the single largest line item – is his focus on electric vehicles. Despite years of tax credits and subsidies, electric vehicles have failed to grab a firm foothold in America. Instead of focusing on more efficient methods, this plan would waste billions of dollars. The administration should focus on getting government out of the way of traditional infrastructure projects to help rebuild America.

“Accompanying these exorbitant proposals were a barrage of tax hikes, meant to soften the blow to the nation’s deficit. However, these tax hikes alone would do significant damage to the nation and its citizens – regardless of how much it might assuage deficit numbers.

“Biden proposed raising the corporate tax rate to 28 percent from the current level of 21 percent. This would put America as one of the highest corporate rates in the developed world. It would depress investment in the economy and limit business’ ability to raise wages and hire more workers.

“Also included was a proposal to hike capital gains rates to 39.6 percent, almost doubling the current rate. While the President claimed this would only impact 0.3 percent of Americans, this is far from the truth. This will hurt investment in the economy and cause stock prices to fall, creating a ripple effect through the whole economy. Not only that, but families selling their homes could get caught up in this tax if they take advantage of the optimal housing market. And, raising taxes on carried interest investment will hurt American entrepreneurs and the economy. 

“Biden criticized the Tax Cuts and Jobs Act and promised to repeal many of its provisions. The tax cuts energized the pre-pandemic economy and helped the nation financially after businesses re-opened. Rolling back its provisions will roll back many of those benefits as well. It was also rich that Biden hit out at the tax cuts for exploding deficits as he simultaneously calls for trillions in new spending.

“While we share the administration’s goal of rebuilding America and putting the days of Covid-19 behind us, it should be done with private investment, not taxpayer dollars. Biden should stay true to his word to build deals across the aisle, instead of pushing many of the partisan proposals set forth before Congress. TPA would be more than willing to help forge those deals.”

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Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.