analyticsbox | Dec 15, 2021
The Seen vs. Unseen Impacts Will Surprise You!
In our last email (Facts No Spin #29) we compared BBB proposals to the War on Poverty and concluded that it was not good economic policy and will not help improve your standard of living. In this No Spin email, we explain some of the many reasons why. For a more detailed financial analysis, see this article based on a study by the nonpartisan Congressional Budget Office.
What started as a 3.5 Trillion tax/spend plan has now been whittled down to ONLY 1.75 Trillion in the House! AND, they said, it cost zero! Astonishing how we can spend that much at no cost. That was modified to ‘it doesn't add anything to the national debt, it is all paid for with tax increases’. This PBS (political bull shit) is beyond the pale and wrong! AND they promise it has no impact on those earning less than $400,000. Read on and judge for yourself.
The ‘costs’ are held down by gimmicks, like paying for programs for short periods of time, when the ‘plan’ is for them to become permanent. Or starting the programs in 5 years so the costs will appear lower. Everyone sees through that ‘malarkey’. The objective economists estimate the real cost is between 4-5 Trillion and it will add 2-3 Trillion to the Federal debt. But even at 1.75 Trillion, the added debt is hundreds of Billions, per the nonpartisan CBO.
That isn't all - these policies hurt the economy and cause added inflation. Only a ‘political’ economist says otherwise - we need to listen to the ‘objective’ economist. We are already seeing the inflation from recent massive spending bills (such as the unneeded 1.9 Trillion American Rescue Plan passed last spring), this will be more of the same. And BBB will lower inflation?? Really??? Nonsense!! Inflation is a big tax on everyone, hurting working families the most.
The incentives are all wrong. The Power of Incentives is truly incredible, and if we incentivize people not to work, guess what happens? We are seeing that impact already, this BBB is more of the same.
More taxes and bigger government are not the formula for growing an economy, just the opposite. See Facts No Spin #16 to understand this.
Taxes on the rich will pay for all this! Let’s examine a few facts:
Corporate taxes generate about 9% of all Federal income. Raising this makes us non-competitive in the world (we just got to a competitive rate of 21% in 2017) which will slow growth in corporations and will likely have a minor impact on total revenue.
The impact of raising Corporate tax is primarily on employees, and consumers.
The single largest tax impact is CUTTING TAXES ON THE WEALTHY by increasing the amount they can deduct for State and local taxes (SALT) from $10,000 to $72,500. Tax the rich??? Got that backwards.
Taxing ‘book income’ instead of what the tax law provides. Tax laws are instituted for a reason to provide incentives. If Congress wants to change that, then change the tax laws.
Tax subsidy for unions
Tax subsidy for news media
Tax increases on nicotine products - Tax the rich???
Inflation is a hidden tax on everyone, impacting working families the hardest.
Here are some other goodies in the proposals (space does not allow for full analysis - see this article for more details):
Federal takeover of family leave, mostly benefits the rich
Welfare increases in several programs
Increasing child tax credits with no work requirements, including mandates which substantially raise the cost of child care.
Subsidies for Electric Vehicles (EV) (bonus subsidy if a union shop) which mostly benefits the wealthy, wind, solar, and other green technologies. When they are economically viable, subsidies are not needed. And EV’s have little impact on carbon emissions (see Facts No Spin #1).
Fees on oil and gas, to encourage clean energy, even though they admit this will have a negligible impact on carbon emissions. More inflation hurting working families.
Huge increase in the IRS to audit more tax returns
Price controls on drugs. This never works and will cripple innovation and ultimately make healthcare more costly.
THE BOTTOM LINE
BBB is just bad policy, and the PBS is mind-numbing. Don't listen to it, it hurts the working families it is supposed to help. Judge for yourself and let your representatives know what you think. The good news is that many of the public have already figured this out - over half the people do not support this today. It is not law yet, let’s hope this one never happens.
UNDERSTAND ECONOMICS, THEN VOTE SMART.