List Of Tax Hikes When Biden Signs The $430 Billion Climate and Tax Bill into Law Passed by Both the Senate and House
Here is the list of tax increases included in Democrats’ tax-and-spend bill just passed by both the Senate and House. See how it will affect you:
1) 6.5 Billion Natural Gas Tax Which Will Increase Household Energy Bills
The bill imposes a regressive tax on American oil and gas development. The tax will drive up the cost of household energy bills. The Congressional Budget Office estimates the natural gas tax will increase taxes by $6.5 billion.
President Biden’s tax pledge to any American making less than $400,000 per year is now null and void. You will be taxed with an increased tax burden on low- and middle-class families. Even so, Biden administration officials have repeatedly admitted the taxes will boost consumer energy prices which are in violation of President Biden’s $400,000 tax pledge.
In a letter to Congress from the American Gas Association warned them that the methane tax in the bill would amount to a 17% increase on an average family’s natural gas bill. The Democrats have included this tax in the bill despite retail prices for energy surpassing multi-year highs in the United States.
2) $12 Billion Crude Oil Tax Which Will Increase Household Costs
With gas more than at least $4.00 per gallon across the country and only weeks from record-high prices, Democrats have included a 16.4 cents-per-barrel tax on crude oil and imported petroleum products that will be passed on to consumers in the form of higher gas prices.
Once again, this tax hike violates President Biden’s tax pledge to any American making less than $400,000 per year.
As if that isn’t bad enough, Democrats have pegged their oil tax increase to inflation. That means as inflation increases, so goes the level of tax.
The non-partisan Joint Committee on Taxation (JCT) estimates this provision will raise $12 billion in taxes across the board.
3) $1.2 Billion Coal Tax Will Increase Household Energy Bills
The bill would more than double current excise taxes on coal production. Under the Democrat proposal, the tax rate on coal from subsurface mining would increase from $0.50 per ton to $1.10 per ton while the tax rate on coal from surface mining would increase from $0.25 per ton to $0.55 per ton. Both are more than at least doubled.
JCT estimates that this will raise $1.2 billion in taxes that will be passed on to consumers in the form of higher electricity bills.
4) $225 Billion Corporate Income Tax Hike Which Will Be Passed on to Households
Democrats imposed a 15 percent corporate alternative minimum tax on the financial statement income of American businesses reporting $1 billion in profits for the past three years. Bear in mind that these American companies employ millions of Americans. It’s obvious someone has to go as the cost of this tax increase will be borne by working families in the form of higher prices, fewer jobs, and lower wages.
A Tax Foundation report from as far back as last December found a 15 percent book tax would reduce GDP by 0.1 percent and kill 27,000 jobs.
Preliminary cost estimates from the Congressional Budget Office found the provision would increase taxes across the board for all Americans by more than $225 billion.
According to JCT’s analysis, 49.7 percent of the tax would be borne by the manufacturing industry at a time when manufacturers are already struggling with supply-chain disruptions.
Tax Foundation also warned that current supply chain issues could be worsened by the book tax’s disproportionate burden on key industries.
The report concluded that “the coal industry faces the heaviest burden of the book minimum tax, facing a net tax hike of 7.2 percent of its pretax book income, followed by automobile and truck manufacturing, which faces a 5.1 percent tax hike.”
5) $74 Billion Stock Tax Which Will Hit Your Retirement Nest Egg — 401(k)s, IRAs and Pension Plans
When Americans choose to sell shares of stock back to a company, Democrats will impose a new federal excise tax which will reduce the value of household nest eggs. Raising taxes and restricting stock buybacks will basically obliterate the retirement savings of any individual with a 401(k), IRA or pension plan. Union retirement plans will also be hit.
U.S. employers will be put at an unprecedented competitive disadvantage with China, which does not even have such a tax.
Stock buybacks help grow retirement accounts. Raising taxes and restricting buybacks would harm the 58 percent of Americans who own stock and more than 60 million workers invested in a 401(k). An additional 14.83 million Americans are invested in 529 education savings accounts.
Retirement accounts hold the largest share of corporate stocks, accounting for roughly 37 percent of the outstanding $22.8 trillion in U.S. corporate stock, according to the Tax Foundation.
In 2017, corporate-sponsored funds made up $4.45 trillion in market value; union-sponsored funds accounted for $409 billion; and public-sponsored funds, which benefit teachers and police officers, added up to $4.25 trillion.
When companies perform stock buybacks, the investors are the ones who should benefit, not the Federal government. That’s over because a tax on buybacks could dissuade companies from conducting this action and negatively impact retirement savings.
6) 95% Federal Excise Tax on American Pharmaceutical Manufacturers
Democrats would impose a 95 percent excise tax on prescription drugs unless drug manufacturers accept government price controls.
If all drug manufacturers would accept the price controls, they could stop selling the drug in the U.S. market entirely, rather than pay the 95 percent tax.
This provision would also restrict U.S. medical innovation and limit the supply of new medicines.
Price controls never work because they cause supply shortages. The CBO warned that the reduction in manufacturers’ revenue could be as high as $1 trillion over the next ten years and would “lower spending on research and development and thus reduce the introduction of new drugs.”
The CBO further stresses the “uncertainty” in assessing the number of new medicines that would be prevented from coming to market. The agency already revised its original assessment to increase the number of drugs prevented from being introduced by 50 percent.
7) $52 Billion Income Tax Hike on Mid-Sized & Family Businesses
Just as the U.S. economy slides into a recession, Democrats are including a “passthrough” tax hike on businesses with declared losses. Forget about those business deductions. This provision widens the net of taxable income.
Preliminary cost estimates from the Joint Committee on Taxation show the provision will increase taxes by $52 billion. And with the 87,000-armed tax collectors, small businesses will have to think twice even about legitimate deductions taken in the past. Be prepared for a new Schedule C and cash payments.
In a rare moment of generosity, Senate Democrats passed an amendment to the bill before final passage that created a two-year extension on loss limitations for non-incorporated taxpayers if the amount of the loss is in excess of $250,000 ($500,000 in the case of a joint return). This provision was scheduled to sunset in 2026 under current law, but if Biden and the Dems are out in 2024 all this could change.
This provision would raise taxes on a manufacturer, retailer or other capital-intensive business that sees significant business losses in any year due to the cost of wages, rent, new equipment, inventory, and interest payments.
The loss limitation was originally created by the Tax Cuts and Jobs Act passed by Congressional Republicans but was used to offset the creation of the 20 percent deduction for “passthrough” businesses, resulting in a net tax cut for these businesses. Senate Democrats have now extended this loss limitation for two additional years to pay for their reckless tax and spend spree. They did not extend the 20 percent deduction for “passthrough” businesses.
This provision also violates President Biden’s campaign pledge to small businesses: “Taxes on small businesses won’t go up.”
8) Supersizing the IRS to Increase Audits – $204 Billion
The bill would spend $80 billion to supersize IRS with 87,000 new agents and auditors and ramp up audits on working households and small businesses.
The IRS would perform an additional 1.2 million annual audits under the plan. Democrats claim the increased spending on enforcement would net $124 billion. They don’t mention the cost of paying 87,000 new agents whose average salary is in the six-figure range. That alone, with all the resources necessary could cost $8,700,000,000.
The bill spends 14 times as much money for “enforcement” — such as small business audits — than for “taxpayer services” — such as answering the phone.
IRS employees only answer the phone “19 or 20 percent” of the time.