President Joe Biden will wreck the economy. Are we talking about another depression like Trump says on the stump? Probably not, but it’s not going to be pretty.
The Wall Street Journal editorial board looked at the Biden agenda, analyzed its costs, and the conclusion is that this plan is only good if you want Trump gone. That’s about it. There will be tax increases.
The thing about Democrats wanting to only tax the rich is that they have these big government programs that will require taxes on the middle class and the working poor. I credit Bernie Sanders for one thing: honesty. He admitted that his single-payer, Medicare-for-All program would lead to tax increases. He was unapologetic. Joe Biden thinks he can make all his economic plans a reality by just taxing those who make $400,000 or more. It won’t work.
The Journal had a lengthier op-ed this time because they know the liberal media will bury the details. They also said that the economy is on the rebound and it’ll shoot up like a rocket ship once we have acquired a COVID vaccine. For the past few weeks, Trump’s message has been hitting Joe on his socialist agenda items, his mental clarity, and the booming economy. It writes itself. We’ve seen over 10 million new jobs in four months, half of the jobs lost due to China’s incompetence in handling COVID. The president’s message is, “re-elect me and I’ll finish it.” That should be the unified GOP line.
With “Bidenomics,” we see a median household income drop by $6,500 by 2030. So, let’s say Biden wins, Trump may be gone, but you’ll be poorer and dealing with tax increases. Oh, and Biden will have to offer something big to the green Left. It’ll probably increase the cost of American families’ energy bills, for sure. That’s a double-whammy—and something that’s especially lethal to the home budgets of fixed-income seniors (via WSJ):
The issue is whether Mr. Biden’s policies will nurture this strong recovery, or slow it down as Barack Obama’s policies did after the 2009 recession. This is where the Hoover study comes in, as it examines the Democrat’s proposals on health insurance, taxes, energy and regulation. The authors are economists Timothy Fitzgerald, Kevin Hassett, Cody Kallen and Casey Mulligan. Messrs. Hassett and Mulligan were members of the Council of Economic Advisers in the Trump White House, but then the boosters of Bidenomics are veterans of the Clinton-Obama Administrations.
Mr. Hassett has done pioneering work on the impact of corporate taxation and Mr. Mulligan of the University of Chicago on the impact of government subsidies that raise the marginal tax-rate barriers as workers try to climb the economic ladder. The 50-page Hoover study is valuable because it examines policies for their incentive and supply-side effects, rather than merely macroeconomic demand-side spending.
Overall, the authors estimate that the Biden agenda, if fully implemented, would reduce full-time equivalent employment per person by about 3%, the capital stock per person by some 15%, and real GDP per capita by more than 8%. Compared to Congressional Budget Office estimates for these variables in 2030, this means there would be 4.9 million fewer working Americans, $2.6 trillion less in GDP, and $6,500 less in median household income.
…consider Mr. Biden’s expansion of the Affordable Care Act and Medicare for those above age 60 (versus 65 now). These subsidies affect the incentive to work, and the authors estimate the ACA changes would increase the average marginal tax rate on labor by 2.4 percentage points. That’s nearly half as much as the six percentage points from the original ACA, which is part of the explanation for the agonizingly slow labor recovery in the Obama era.
Mr. Biden is also proposing substantial increases in business tax rates that will raise the cost of capital. The former Vice President likes to say he’d only raise the top corporate tax rate to 28% from 21%. But so-called pass-through entities (often small businesses) employ more than 40 million Americans, and most pay taxes at the individual tax rate.
“Biden’s plan to raise personal income and payroll tax rates would push their federal rates from below 40 percent to, often, above 50 percent, and these are on top of state income taxes,” the authors write.
There is much more in the Hoover study, especially on the costs of returning to Obama-style regulation. Most of the media will ignore it, which is why we thought we’d provide readers with more than usual detail.
This Thursday is the last presidential debate. Trump should be aggressive, yes, but also allow the former VP to talk. Joe will ramble and hang himself. When Trump responds, he should be laser-focused on the policy, with digs that this is the reason, besides Hunter Biden’s emails, that Joe hides in the basement.