Fresh off signing a $1.9 trillion COVID “relief” bill on Thursday, the Biden administration is already planning another $4 trillion spending spree. This one, on the other hand, will come with a significant tax hike — enough to offset the relief package’s “blue states bailout.”
The huge new spending bill would contain a slew of tax increases that would stifle economic growth and make the US less competitive internationally.
According to Fox Company, the proposed reforms include increasing the corporate tax rate to 28 percent from 21 percent, raising the income tax rate for people making more than $400,000, extending the estate tax, introducing a higher capital-gains tax rate for individuals earning more than $1 million annually, and reducing tax exemptions for so-called pass-through companies.
The economic plan was put into historical context by Bloomberg News.
Tinkering with rates is fraught with political risk, according to Bloomberg, because each tax cut and credit has its own lobbying constituency. “This explains why the tax increases in Bill Clinton’s signature 1993 reform stand out from the minor tweaks made since.”
“For the Biden administration, the proposed reforms are an opportunity not only to finance key programs like infrastructure, climate change, and increased assistance for poorer Americans, but also to fix what Democrats say are inequities in the tax system itself,” according to the article.
If this seems to be wealth transfer in the Obama mold, it is. The COVID pandemic is being used by the federal government as an excuse to transfer huge “relief” packages filled with pork and handouts to political donors.
Who are the biggest winners from the $1.9 trillion spending binge? States in blue are the most populous.
The Post commented on the newly passed “relief” bill that “the biggest winners will be states that locked down the hardest during the pandemic.” “Their ‘Faucian bargain’ has finally paid off…”
States like Illinois, New York, and New Jersey, which have major pension obligations and budget issues, would also benefit from Biden’s bailout money. The Post also points out a few things that contradict logic.
The Post wrote, “The numbers boggle the mind: $195 billion goes to states with no strings attached (except, of course, to prohibit tax cuts).” “There’s $130 billion set aside for reopening K-12 schools, but there’s no obligation that they do so. Another $25 billion will be spent on public housing, and another $20 billion will be spent on public transportation. In total, America’s states and cities will receive a windfall of more than half a trillion dollars.”
And New York Rep. Adriano Espaillat expressed his dissatisfaction with the bill’s waste.
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“When challenged by CNN host Poppy Harlow around $1.5 million for the Seaway International Bridge between Massena, New York, and Canada, and $100 million for the development of an underground rail line connecting House Speaker Nancy Pelosi’s San Francisco district and Silicon Valley,” Espaillat acknowledged his reservations, according to the Post.
The budget plan also comes as new information confirms what opponents predicted all along: States that “closed down” did no better than states that kept their borders open.
“Masks are still needed, indoor dining and other activities are severely restricted, and Disneyland remains closed nearly a year after California Gov. Gavin Newsom ordered the nation’s first statewide closure due to the coronavirus,” the Associated Press reported on Saturday.
The Associated Press added, “By comparison, Florida has no statewide restrictions.” “Republican Gov. Ron DeSantis has made it illegal for local governments to fine people who refuse to wear masks. Disney World, on the other hand, has been open since July.”
“Despite their contrasting methods, COVID-19 case rates in California and Florida have been nearly identical,” it said.
In terms of COVID-related deaths per million, New York and New Jersey are the worst in the world, while Florida is 27th and California is 30th. These estimates account for the states’ large populations (it should be added the Florida has a large elderly population that is highly at risk from COVID).
Furthermore, new CDC studies show that indoor dining has no statistically significant connection to the spread of COVID-19 and that masks are ineffective at preventing case rate growth and mortality rates.
Despite their stringent lockdown measures, the blue states’ attempts not only failed to avoid the spread of the coronavirus, but also sunk their economies.
On his Substack column, Jordan Schachtel offers a clear but effective breakdown of January unemployment statistics for states that locked down and states that took a “minimalist” approach.
“Every state except Vermont took a more minimalist approach to COVID-19 constraints of the remaining 9 states with the strongest unemployment figures. On the other hand, below is a list of states where unemployment has risen by at least 4% since January 2020”:
- New York
- New Jersey
“All of the above states introduced massive lockdowns in an effort to prevent the annual respiratory illness season from happening, but they failed,” Schachtel says. “Their respective economies were detonated as a result of these policies. Furthermore, the majority of these states continue to have significant restrictions in place that will keep unemployment rising.”
Those destructive policies would be compensated for by American taxpayers. And if Biden’s huge tax hike is passed, along with even more excessive spending, it would put a stop to any possibility of a rapid recovery.