Tuesday, November 28, 2023

Biden Treasury Nominee: Repeal Trump’s Tax Cuts and Impose New Carbon Tax

'As with the increase in energy costs, the increase in the cost of non-energy goods and services would disproportionately impact low-income households...'

Democrat Joe Biden‘s nominee for Treasury secretary, Janet Yellen, supports trillions of dollars in new taxes on businesses, citizens and carbon dioxide, Americans for Tax Reform reported.

She wants Congress to repeal former President Donald Trump‘s signature economic legislation, the Tax Cuts and Jobs Act.

Yellen wrote in a 2018 op-ed for the Washington Post saying that she opposed the TCJA because “the economy was already at or close to full employment and did not need a boost.”

When Trump signed the TCJA into law in December 2017, the unemployment rate was 4.1%. Before the coronavirus crashed the economy, in February 2020, the unemployment rate had fallen to 3.5%.

These gains went to groups with high unemployment rates, too. Unemployment for African Americans fell from 6.7% to 5.8%, while Hispanic unemployment fell from 5% to 4.4%.

The fall in unemployment reflected a gain of 5.1 million jobs from December 2017 to February 2020.

The TCJA boosted wages for the first time in decades: median household income in 2019 grew by $4,440 or 6.8%. That was the largest boost for workers in American history.

Trump’s tax cuts also gave small businesses a 20% income-tax deduction, which Yellen wants repealed.

Before the TCJA, America had a 35% corporate tax rate, one of the highest rates in the developed world. The TCJA reduced the rate to 21% so that corporations could build businesses in America and employ American citizens.

Yellen’s proposal would also remove the tax relief provided to the middle class.

Citizens who earn between $50,000 and $100,000 per year saw an average 13% decrease in their total tax liability, while tax liability for those earning more than $1 million per year decreased by 5.8%.

The TCJA also repealed Obamacare’s individual mandate. If Congress reinstates the individual mandate, about 5 million households, most of them low income, would have to pay a penalty between $695 and $2,085.

Three out of four households that would have to pay the individual mandate earn less than $50,000 per year.

Yellen wants Congress to pass the Energy Tax, too, which would begin by charging companies $40 per ton of carbon dioxide emission. That rate would increase 5% every year, factoring out inflation.

She co-founded the Climate Leadership Council, an “international policy institute,” that lobbies Congress for the Energy Tax.

These taxes harm low-income Americans most of all, since energy costs consume a higher proportion of total income for poor families.

Even former Secretary of State Hillary Clinton opposed the Energy Tax for this reason.

“As with the increase in energy costs, the increase in the cost of non-energy goods and services would disproportionately impact low-income households,” an internal Clinton memo said.

Clinton’s team found that the Energy Tax would increase gasoline and household energy costs.

“In our analysis, for example, a $42/ton GHG fee increases gasoline prices by roughly 40 cents per gallon on average between 2020 and 2030 and residential electricity prices by 2.6 cents per kWh, 12% and 21% above levels projected in the EIA’s 2014 Annual Energy Outlook respectively,” the report found.

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