Top Biden Official: Raising Taxes for Middle-Class Drivers “Looks Promising”

March 26, 2021 — Blog    — Press Releases    — Select Revenue Measures   

Click here to watch the clip and read CNBC’s story.

Key Takeaways:

  • Biden Transportation Chief Says Tax that Hits the Middle Class “Looks Promising”: During an exchange with CNBC’s Kayla Tausche, Transportation Secretary Pete Buttigieg said there was a lot of promise in raising taxes on drivers–which would fall on lower and middle-income Americans, as well as manufacturing.
  • Biden’s Spending Plans Require Taxing More Than Just the Rich: President Biden’s pledge not to raise taxes on any individual making less than $400,000 a year won’t be able to fund his partisan spending spree.
  • Biden’s Tax Pledge Is Already Full of Holes: White House Press Secretary Jennifer Psaki raised concerns about whether that pledge will be upheld when she seemed to change the terms of the pledge by suggesting the pledge was about “families” earning less than $400,000, not individuals–meaning a family where two income earners are nearing retirement and at the peak of their earnings.

He also said there would be “no net cost” to the American people, but that is unlikely based on expert witness testimony from a Ways and Means Republican Meeting on Tuesday that coincided with a sham “Members’ Day” hearing on Infrastructure.

Using President Biden’s assumptions at face value, including raising $3.3 trillion in taxes, spending $3.3 trillion on infrastructure and R&D, and assuming the best, meaning the highest impacts, of R&D and infrastructure and productivity, a forthcoming study by two Rice University economists finds that this is a rosy projection at best.

Assuming the strongest possible economic growth for infrastructure, President Biden’s plan is STILL a recipe for stagnation and decline. If Democrats get their way:

  • The economy will shrink by 2 percent
  • Investment in the U.S. will shrink by about 5 percent
  • Capital will flow out of the United States
  • Real wages will go flat

This study was done based on the same model as how the Joint Committee on Taxation would analyze the macroeconomic impacts of a tax bill, with the infrastructure pieces taken directly from the Congressional Budget Office. To read more about that study and the Ways and Means Republican meeting click here.