Federal spending continues to trend higher after President Joe Biden signed another huge COVID-19 relief bill into law earlier this month.
As a result, the White House has acknowledged that the situation will require a round of tax hikes, prompting longtime Republican strategist Karl Rove to warn all Americans that they should be concerned.
“The value of everything manufactured”
During a Fox News Channel appearance on Tuesday, Rove said that Biden’s tax proposal would put more than 500,000 Americans out of work.
Furthermore, he told host Martha MacCallum that the nation’s gross domestic product is on track to decline by roughly 1.6%.
Explaining the ramifications, he said: “That is to say, we’ve got like a $21 trillion-plus gross domestic product, the value of everything manufactured, made and sold in the United States, and it would be [reduced by] roughly $300 billion in the first year.”
Last week, Bloomberg cited one source within the Biden administration who said the corporate tax rate would increase from 21% to 28% while taxpayers earning more than $400,000 annually would see their rates increased.
Other reported hikes include an increase in capital gains taxes for those with an income of at least $1 million, an expansion of the estate tax, and a reduction in certain business tax credits.
“That would raise $230 billion”
Making matters worse, the assurance that tax increases would only impact the wealthiest Americans appears to be based on misleading claims.
In a recent ABC News interview, Biden said that those making less than $400,000 would not “see one single penny in additional federal tax.”
A short time later, however, White House press secretary Jen Psaki clarified that the threshold actually applies to households, not individual income.
The president has admitted that Republicans are likely to oppose his move, but he nevertheless expressed confidence that he could force through such legislation based only on the support of his own party.
Biden said that he “may not get” GOP support for a tax increase but said he could count on “the Democratic votes” to get it done, adding: “If we just took the tax rate back to what it was when Bush was president — top rate paid 39^% in federal taxes — that would raise $230 billion.”