President Joe Biden is attempting to deflect criticism by portraying Donald Trump as the one who would benefit wealthy donors at the expense of the general public. However, a closer examination of Biden’s tax plan reveals that he, not Trump, is poised to enrich his wealthy donors at the expense of everyone else.
Trump’s 2017 Tax Cut and Jobs Act lowered the corporate income tax rate from 35% to 21%, leading to economic growth, increased wages, and job creation, according to the nonpartisan Tax Foundation. In contrast, Biden’s plan would raise the corporate rate to 28% and increase the corporate minimum tax from 15% to 21%, which would shrink the economy, cut wages, and cost jobs.
Biden’s plan would force most corporations to pay higher taxes, which consumers would have to cover through lower wages and higher prices. However, not all corporations would be affected equally. Many businesses would actually receive checks from the federal government, despite what Biden calls a “corporate minimum tax.”
The tax breaks Biden has secured through the Inflation Reduction Act and the Infrastructure Investment and Jobs Act are often passed through the tax code in the form of credits for politically favored corporations. For example, companies that manufacture or install solar panels or wind turbines, or build electric vehicles or semiconductor factories, receive tax breaks. These credits are often sold to investment banks like J.P. Morgan, creating a secondary market.
The tax code has long been riddled with carveouts for industries that donate to politicians. Under Biden, the amount of money spent this way has doubled. The result is a complex and opaque tax code that punishes industries out of favor with the Democratic Party, such as traditional energy producers and manufacturers, while rewarding Democratic favorites.
Biden’s tax plan moves in the opposite direction of a simple, transparent, and broad-based tax system.
