Tax hikes in Biden’s budget would be ‘devastating’ for Americans, says top House tax writer
EXCLUSIVE: The chairman of the House Ways and Means Committee is warning that the tax hikes in President Biden’s proposed budget would have a “devastating” effect on Americans across the country.
“It means a working-class (American) is going to have to pay more to put food on the table, clothes on their backs and gasoline in their cars, because this incredible spending will only fuel inflation. These Biden taxes will only reduce the take home pay for all Americans,” Rep. Jason Smith, R-Mo., told Fox News Digital in an interview Friday.
“Whether you make less than $400,000 a year or whether you make more than $400,000 a year, the policies within this proposal are going to be devastating.”
Smith was referring to one of the marquee points of Biden’s progressive fiscal 2024 agenda: an income tax hike from 37% to 39.6% on Americans whose earnings are in the top tax bracket. In total, the plan calls for more than $2 trillion in tax increases on the wealthy the White House claims will offset federal deficits by the same amount over 10 years.
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Committee Chairman Jason Smith, R-Mo., questions U.S. Treasury Secretary Janet Yellen during a House Ways and Means Committee hearing on Capitol Hill March 10, 2023, in Washington. (Drew Angerer/Getty Images)
Biden is also proposing to raise the corporate tax rate from 21%, where it was rolled back to during the Trump administration, to 28%.
Smith also pointed to the president’s proposal to roll back fossil fuel subsidies and other measures that House Republicans say would result in a $37 billion tax hike on the American energy industry. All told, these changes would trickle down to consumers, raising prices across the board.
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“That will affect every American,” the chairman said, adding that Biden’s call to increase IRS funding by 15% after $80 billion was already granted by Biden’s Inflation Reduction Act last year would also make economic conditions tougher for Americans.
“And what is that going for? Enforcement. Just for the sake of monitoring working-class Americans’ bank accounts,” Smith said.
He argued that “everything in this budget harms middle-class Americans,” citing calculations that project $4.7 billion in tax increases if Biden’s plan were to pass.
The hearing was focused on President Biden’s proposed budget for fiscal 2024 (Anna Moneymaker)
Smith also cited House GOP calculations that show Main Street businesses would pay $1.8 trillion more under Biden’s plan through an expansion of the small business surtax and other means.
“The last thing this economy needs right now for working-class families is more spending and more increases in taxes. Right now, they lost … months of their salaries over the last two years just because of the cost of inflation. … That happened because of reckless government spending,” Smith said.
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Treasury Secretary Janet Yellen was on Capitol Hill earlier Friday for a hearing to defend Biden’s budget before Smith’s Ways and Means Committee.
Republicans have been calling on Biden to release his budget proposal since he missed the formal deadline to do so last month, urging him to consider spending cuts before they’ll agree to raise the $31.4 trillion debt ceiling.
But the GOP has ruled out supporting tax hikes as a way to help lower the deficit. And Smith said Friday that Yellen’s testimony and Biden’s plan show the administration is “clearly not” not serious about getting government waste under control.
Janet Yellen, U.S. treasury secretary, center, departs following a House Ways and Means Committee hearing in Washington, D.C., Friday, March 10, 2023. (Al Drago/Bloomberg via Getty Images)
“This is the largest tax increase that Biden has ever presented, and it is the largest spending he’s ever considered. So, if he’s really wanting to cut spending and control the fiscal crisis that we’re in, he would have presented a budget that would balance at some point. This budget will never balance,” Smith said.
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The congressman deferred to leaders of the House Budget Committee when asked about whether Republicans’ own fiscal blueprint was in the works but said that talks on how to proceed with the debt limit were ongoing.
“There’s a lot of conversations going on right now among Ways and Means Committee members, among all members in Congress, also with senators. And there are multiple avenues of what’s necessary to raise the debt limit,” Smith said.
He declined to go into specifics, explaining that Republicans “are not boxing themselves in.”
“They just know that we have a tough task before us, and that is we need to address the fiscal insanity that’s happening,” Smith said.