Joe Biden is planning the largest federal tax hike in 30 years. Advisers are preparing a new set of tax measures that would increase the tax burden of high-earners and businesses.
The Tax Foundation reports that 40.1 percent of all income taxes collected are already garnered from the top 1%, beating the 28.6% gathered from the bottom 90 percent of earners. But Biden is planning to drive out the 1% by stressing them further.
Inside sources from the Biden Administration leaked a wish list of their tax agenda. Items included raising the corporate tax rate by 7%, raising income tax on earners making more than $400,000, reducing tax preferences for LLC’s, raising the capital-gains tax rate for those earning more than $1 million annually and expanding the estate tax.
Lawrence Summers, an economist who previously worked at the Treasury Department, warns that Biden’s $1.9 trillion coronavirus package might cause a serious inflation boom as soon as this year. He observed that Biden’s stimulus bill “is three times as large as the projected shortfall.”
Summers also pointed out that because the Federal government will probably be unable to effect “tax increases or spending cuts,” he predicts that there is a “risk of inflation expectations rising sharply.” By taking the largest stimulus measures in history, it can be hard to predict what the economic consequences might be, Summers says that results of the bill need to be “monitored closely” and that the government needs to be able to “adjust policy quickly” in reaction.
President of Bianco Research, Jim Bianco, warned that there is a serious threat of inflation. Should levels rise to 2.6%, he says “that’s the highest… in 30 years.” He elaborated that it would pose a serious issue for risk markets, “even if the Fed says [they want that much] inflation.”