The $1.9 trillion COVID relief bill is being called the most significant proliferation regarding the welfare state, according to The Western Journal.
New tax increases were also within the 628-page bill.
$60 billion in tax increases are directed at businesses and business owners, i.e. entities that create jobs and wealth rather than government dependence.
The COVID-19 relief bill is only requiring a majority vote in the Senate, bypassing a potential GOP filibuster.
“The tax increases Democrats picked to help keep their plan’s cost in check had the political benefit of being arcane. Unlike things like raising the corporate tax rate or upping the top marginal tax rate on the rich, the ones they chose won’t produce many headlines,” Politico reported.
“Since the provisions were added late in the legislative process, lobbyists didn’t have much time to rouse opposition to the plans.”
The bill will limit the amount of losses people can claim on their personal income taxes to $500,000 for unincorporated businesses.
Businesses are usually permitted to deduct all their employees’ pay as an expense. This change would mean an additional $6 billion in taxes paid.
“International tax rules are generally designed to minimize the likelihood that a multinational will pay taxes twice on the same dollar of income,” the Tax Foundation’s Daniel Bunn said.
“One way that the U.S. rules try to accomplish this is by providing companies with tax credits for taxes paid in foreign jurisdictions,” he continued. “If a U.S. parent company has a profitable subsidiary in Germany and pays taxes to Germany, the company could potentially qualify for foreign tax credit.”
“Some say the coronavirus package offers a hint of what’s to come,” Politico reported.
“Clearly it’s a signal that Democrats will look to high-income people and large corporations for revenue for the investment package to come,” said Seth Hanlon.
The largest chunk of change that is coming from the $1.9 trillion package goes to American adults in $1,400 payments with an additional $1,400 per eligible dependent.
This totals to $422 billion.
The legislation includes $109 billion for a one-year expansion of the child tax credit from $2,000 to $3,000, and $3,600 for kids under 6.
Biden said he planned to “get rid of the bulk” of the Trump tax cuts for businesses and individuals.
From The Western Journal:
Prior to the COVID-19 shutdown, the United States was experiencing some of its best economic numbers in a long time, including a 3.5 percent unemployment rate — a half-century low.
What policies led to the boom? President Donald Trump reached back to the Ronald Reagan playbook of the 1980s, a time of incredible economic expansion and the best seen since World War II.
His initiatives included lowering taxes on businesses and individuals, cutting regulations on companies and increasing the nation’s energy supply.
Reagan’s election in 1980 really was a direct response to the big-government policies of the 1960s, as typified by the Great Society enacted under Democrat Lyndon Johnson.
The Obama-Biden administration raised taxes coming out of the Great Recession a decade ago, and the U.S. experienced the worst economic recovery since World War II, CNN reported.
If Biden does not raise taxes significantly or change the pro-growth regulatory climate put in place by Trump, the economy will continue to take off.
If he does, the lesson of history could not be clearer.