By Michael Todd
On Joe Biden’s first day as President of the United States, he ensured that America would not only be economically weaker, but more divided and less secure. Through executive orders and proposed legislation, Biden’s plans will ensure economic stagnation by invoking some of the most radical economic policies imaginable. In other words, he is moving us back towards heavy-handed government interventions and higher taxes, which will create a drag on the economy by imposing additional costs while stifling innovation and productivity.
Under the guise of only holding the wealthy accountable, studies show that Biden’s tax and regulatory agenda will seriously hurt the economy overall. While the media will repeatedly state that his plans will ensure economic equity for the less fortunate, these interventions will undoubtedly distort labor incentives, reduce productivity, and destroy jobs.
In what would amount to the most significant tax increase in America’s history, Biden plans to raise taxes by $4 trillion over the next decade. Businesses will be hit with an initial corporate income tax rate increase from 21% to 28%. Capital gains taxes for anyone making over $1 million per year will see a steep increase from 24% to 40%, thus threatening investment and reducing everyone’s retirement savings in America.
Under President Trump, America had become energy independent for the first time in almost 50 years. Biden previously insisted he won’t ban fracking, but it’s looking like he’s going to break that promise. Still, his radical energy plan, which, as we have seen with the cancelation of the Keystone XL pipeline and the banning of drilling and exploration on federal lands, will cost thousands of jobs and make our country dependent on foreign oil. Russia and Saudi Arabia will once again be able to hold energy markets hostage with production restrictions and price gouging.
In what could only be described as one of the most unjust taxes in America, our country imposes an additional tax on the assets of those who have deceased, even after paying a lifetime in taxes. Under Joe Biden’s plan, he will institute a 45% tax on family-owned businesses and estates, which will likely necessitate the forced breakup of legacy businesses or pay the enormous taxes levied on those assets.
Biden wants to increase the minimum wage to $15 an hour, which will destroy small businesses and jobs. While the increase sounds good and will undoubtedly put more money in the pockets of those making minimum wage, the gains will be short-lived. This will saddle small businesses and restaurants with higher costs, forcing many to reduce their workforces and look to automation as a solution. Another consequence of the left’s propensity to push policies lacking foresight, raising the minimum to $15 an hour, will destroy many jobs for young people and low-skilled workers even in the best of times. But this is a time of distress for businesses reeling from months of lockdowns and the pandemic’s politicization. Adding increased wages to the uncertainly of a timely resolution to the pandemic will further inhibit employment gains after losses suffered during COVID.
While some of the proposed policies mentioned above have been envisioned in good faith, the long term consequences will be felt for years to come. In a time of instability during a pandemic, dramatic changes putting a strain on employment, productivity, and business expansion, will devastate many facets of our economy. We should focus on pro-growth policies dedicated to free markets and economic liberty to drive success, not a political vendetta against the previous administration or a profusion of progressive economic policies. Unfortunately, the Biden administration is steadfast in pushing through a radical economic agenda that will raise capital costs, reduce the incentive to invest, increase unemployment, lower productivity, and generate economic stagnation. If the purpose of such strategies is to reduce economic disparity, you cannot achieve such goals penalizing the most productive of society. If history has shown us anything, policies taking from one group and giving it to another does nothing to solve the problem; it only prolongs it. Even though these policies might produce short-term success, they will create long-term misery in due course.