This episode of What’s Ahead points out how the tax proposals President Biden outlined in his national address will hurt, not help, the economy. If enacted, they will turn into political poison for the Democrats.
A doubling of the capital gains levy will shrink Uncle Sam’s revenue, as people will be more inclined to hold on to existing assets rather than sell them and pay so much of the proceeds to the government.
Raising the corporate tax to the highest level among developed nations will mean less money for expansion, which will shrink the economy.
The President wants tens of billions of more dollars for IRS audits of big companies and rich people, believing this will produce a bonanza in revenue. It won’t. Those stories of wealthy individuals and corporations avoiding income taxes are almost always the result of legal strategies made possible by our incomprehensibly complex tax code.
The solution here is simple: Replace our hideous tax system with a simple flat tax. If you make it, you pay it.
Government revenues would go up.