Thursday, April 08, 2021
Political Mayhem Thursday: More Taxes!
As the New York Times reports, the Biden administration's new tax plan would increase taxes by $2.5 trillion, much of it coming from new rules that will require companies like Apple to actually, you know, pay taxes. I'm all for that. I do not understand the utility of allowing a myriad of tax dodges that incentivize companies to move abroad. It also would raise the corporate tax rate to 28%, from 21%. Some will cry that this is more than many other countries' rates, but it also is about the same rate that many middle-class Americans pay.
The Trump administration's model-- lower taxes (mostly for the very rich) and spend more-- created massive deficits (just as the same recipe did for Reagan and George W. Bush). Under Trump, the deficit went up by $7.8 trillion, most of it before the pandemic. Biden is at least trying to raise some revenue for the massive amounts of money he is spending.
I'm not in the camp that says "deficits don't matter," and I'm concerned about the level of spending being proposed. But... better to spend and tax than to spend and not tax, which has been the predominant model-- politically palatable, but terrible policy.
