By: Stephen Moore and Alfredo Ortiz
October 22, 2020
Rapper 50 Cent filled the media void and publicized Joe Biden’s soak the rich tax plan this week.
According to FoxNews.com, “On Monday, the 45-year-old hip-hop star shared an image on Instagram depicting a news broadcast that stated New York would be taxed at a rate of 58% and New York City at 62% under Biden’s policy.
“WHAT THE F—! (VOTE ForTRUMP) IM OUT,” he wrote in the caption. “F— NEW YORK The KNICKS never win anyway. I don’t care Trump doesn’t like black people 62% are you out of ya f—ing mind.'”
With his Instagram post, the rapper spoke for all Americans who want to keep the economy free.
NBC’s Kristen Welker, the moderator of Thursday’s presidential debate, should press Biden on the widespread consequences of his tax plan rather than sticking to the scheduled topics that include climate change, leadership, and race — issues that the Washington media and coastal elite obsess over but that don’t impact the lives of ordinary Americans like tax policy does.
According to a recent study by the Committee to Unleash Prosperity, prepared by University of Chicago economist Casey Mulligan, Biden’s tax plan would reduce average household incomes by more than $6,000.
Last week, a study from the Hoover Institution estimated that Biden’s broader economic agenda would cost 4.9 million jobs and reduce annual median household incomes by $6,500.
These estimates don’t include the taxes that will be required to pay for all of Biden’s spending schemes. A new study by the Florida-based James Madison Institute shows that for Biden to pay for his reckless multitrillion-dollar spending plans, he would have to roughly double the tax on every middle-class American – not just the rich.
What bothers us most is that Biden’s tax plan would apply confiscatory tax rates on job creators, the upper-middle-class, and the wealthy.
He proposes raising the top rate to 40 percent, taxing capital gains and dividends at income tax rates, and eliminating the income cap on which the Social Security tax is applied, among other tax hikes.
Yet Biden’s tax plan would also hurt ordinary Americans. European-style taxes on entrepreneurs reduce economic opportunities for the rest of us.
When 50 Cent faces significantly higher taxes, he has less money to invest in his myriad business interests and spend on fancy cars, hurting middle-class workers in the entertainment and automotive industries.
A manufacturer in Orlando this week warned his employees of layoffs if Biden is elected. If Biden achieves his goal of raising the corporate tax rate by 33 percent, employers’ operating incomes will fall, and some will have to cut jobs, expansion, and wage increases to compensate.
Biden’s proposed 12.4 percent payroll tax will hit small business owners with high-performing executives. These firms will have to pay the employer share of this new payroll tax immediately, regardless of how much they earn each year in profits, creating a massive new cost and a disincentive to hiring and wage increases.
Biden’s tax plan also calls for overhauling the 401k retirement system by reducing deductibility (i.e., raising taxes) for married couples earning more than about $80,000. His tax plan would also curtail itemized deductions (i.e., raise taxes) for all taxpayers earning roughly $164,000 or more.
We can’t think of a worse time to be raising taxes on small businesses and their investors. According to a recent Yelp study, most businesses that had to close due to COVID-19 will never be able to reopen. Even more will shut down for good if Biden’s massive tax increases become law. America’s 30 million small business owners and the 60 million people employed by them deserve to know how Biden’s taxes would impact their economic opportunities — not just 50 Cent’s.
Thursday’s debate may be their last opportunity.
Stephen Moore is a co-founder of the Committee to Unleash Prosperity and a member of President Trump’s economic recovery task force.
Alfredo Ortiz is president and CEO of the Job Creators Network.