OPINION: Several Taxes Our New Congress Might Hike
Just days into the new Congress, Democrats have made it clear that they will spend the next two years fighting for higher taxes on American families, individuals, and businesses.
These tax hikes would erase the current economic successes. The U.S. economy added 312,000 jobs in December and wages increased by 3.2 percent over the past year.
In the past few months, the United States has been named the most competitive economy in the world, manufacturers had their biggest job gain in the past 20 years, and small business optimism is at record levels.
The tax cuts have also resulted in significant tax reduction for families. Ninety percent of wage earners have seen increased take-home pay with a family of four earning $73,000 in annual income seeing a tax cut of $2,058, a 58 percent reduction in federal taxes.
Changing the Rules to Make Tax Hikes Easier
The new Democrat House majority has already changed the rules of the House to make it easier to raise taxes by abolishing the three-fifths majority requirement to raise income taxes that existed under GOP control. This change was proposed as part of H.Res.6, the House Democrats’ rules package for the 116th Congress.
Since they’ve controlled the House since 2011, Republicans maintained a rule requiring any bill that increases federal income taxes to have the support of three-fifths majority of Congress.
Rejecting a Proposal to Make Middle-Class Tax Relief Permanent
Democrats also rejected a proposal by House Ways and Means Ranking Member Kevin Brady (R-Texas) to make permanent the $2,000 child tax credit (up from 1,000) and the $24,000 standard deduction for families (up from $12,000).
Both provisions overwhelmingly benefit middle-class families – the child tax credit is claimed by roughly 22 million American families, while the doubling of the standard deduction provided more take-home pay for the 105 million families that claimed the provision prior to tax reform.
Creating a 70-Percent Income Tax Rate
Freshman Democratic Congresswoman Alexandria Ocasio-Cortez of New York has called for a top 70-percent federal income tax. This would nearly double the current top tax bracket of 37 percent.
While Ocasio-Cortez wants “the rich” to pay more, she fails to mention that the tax code is already steeply progressive. The top 1 percent already pay 39.5 percent of federal income taxes while the top 20 percent of households pay 88.1 percent of federal income taxes.
Raising the Corporate Tax Rate
Kentucky Democrat House Budget Chairman John Yarmuth has announced the Democrat budget proposal will increase the corporate income tax from 21 percent to 28 percent. This would make the United States a less competitive place to do business and make the U.S. statutory rate higher than many developed competitors.
The combined state-federal tax rate under this proposal would be 34 percent, far higher than major competitors such as the United Kingdom (19 percent), China (25 percent), Canada (26.8 percent), and Ireland (12.5 percent).
A corporate rate hike will directly impact today’s strong economic growth, growing wages, record job openings, and lower utility bills.
Reviving the Regressive Obamacare Individual Mandate Tax Penalty
California Democrat Speaker Nancy Pelosi has called for a “replacement” to the Obamacare individual mandate tax penalty that was repealed by the GOP tax cuts.
Before it was repealed, the individual mandate was one of the most regressive taxes in the code.
Based on official IRS data, 75 percent of families (3.8 million filers in 2016) that were impacted by the mandate made less than $50,000 per year.
The GOP tax cuts have proven successful in providing increased take-home pay, more jobs, and a stronger economy.
Given actions of the Democrats just one week into 2019, it is clear that they will spend the rest of the year pushing to undo this law and impose higher taxes on businesses and families across the board.
Alex Hendrie is tax policy director of Americans for Tax Reform, a nonprofit group advocating for lower taxes and limited government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.