President Biden is so focused on passing the so-called “Build Back Better” Act that he has completely missed multiple warning signs that his failed policies are leading our economy straight toward disaster.
Inflation? Check. Supply chain crisis? Check. Energy shortage? Check. Labor? Nowhere to be found.
If something isn’t working, most people would change course or try a different tactic. But the Democratic leadership and President Biden are instead doubling down on their plan of attack, refusing to listen to the American families who are already struggling to make ends meet. In fact, according to the non-partisan Tax Policy Center, President Biden’s massive tax-and-spend package would cause roughly 20 to 30 percent of middle-income households to pay more in taxes in 2022.
It’s a known fact that increased government spending leads to higher inflation, and we’re seeing that play out in real time. Inflation recently hit a 31-year high, making it more expensive to do or buy just about anything. The supply chain bottlenecks we are experiencing in ports and on roads across the country are exacerbating the issue, contributing to goods shortages and the ensuing higher prices.
It should also be noted that inflation is rising faster than wages. While there was a .4% rise in wages, inflation increased by .9%, meaning real average hourly earnings when accounting for inflation actually decreased 0.5% for the month. Thanks to President Biden, a raise has become less of a celebration and more of a necessity. It is no surprise that the local fast-food restaurants are offering $15 an hour as their starting wage but still can’t find employees to fill these jobs.
President Biden’s restrictions on domestic energy production have directly led to skyrocketing gasoline prices as we rely more and more on dirty foreign oil—which coincidentally also increases global emissions. Just last month, gas prices shot up nearly 50% from the same month a year prior, putting them at levels last seen in 2014.
Unfortunately, it’s the local, family-owned small businesses like the ones we rely upon in Central Washington that are being hit the hardest.
On top of the burdensome wage increases our local businesses are facing, President Biden’s Build Back Better Act creates what is being referred to as a ‘Small Business Surtax’ by expanding existing passive income taxes and applying them to active income. The thresholds for these taxes are not adjusted for inflation, so when costs continue to rise, more and more small businesses will be taxed an increasing percentage of their income every year.
When combined with the other surtaxes on certain pass-through businesses, Democrats’ tax changes in the Build Back Better Act create a 48.8% federal effective tax rate on pass-through business income before even considering state and local taxes.
And Congress still doesn’t know how much the bill will cost the American people.
The Congressional Budget Office has only scored 3% of the massive tax and spending spree, and the outlook is grim. Imposing significant tax increases, inflexible mandates, and massive new civil monetary penalties on small businesses would only compound the problems Americans are facing and further damage our economy as we try to overcome the longstanding effects of the pandemic.
Now is the time to course correct, work together to rebuild our economy to the highs we hit before the pandemic, and do something else – like lowering taxes for hardworking American families and expanding opportunity for small businesses to thrive within our communities.
However, if President Biden and the Democratic leadership refuse to see reason and successfully push their partisan “Build Back Better” Act through Congress, the only thing they’re going to be building is a pathway to broke.