President Biden is reportedly going to unveil a set of damaging tax proposals in his State of the Union address that will threaten the growth of the American economy and the pocketbooks of taxpayers everywhere. A hike to the new tax on stock buybacks and a so-called “billionaire’s tax” are so ill-conceived and damaging that they should rightly be consigned to the dustbin with other failed tax proposals.
“President Biden’s combination of a “billionaire” wealth tax proposal, which his Treasury Department admits would reach further down the affluence scale, and a hike in the new stock buyback tax would be disastrous for the future of the American economy,” said NTU President Pete Sepp. “The White House could hardly come up with a better way to tamp down on the prospects of a soft landing if they had specifically tried to do so.
The so-called “billionaire’s tax” is neither a tax on billionaires - President Biden’s proposal starts at $100 million, one-tenth of the label he’s applying to it - nor is it a new income tax bracket for billionaires. It is a disastrous new zombie form of a “mark-to-market” proposal on unrealized gains that the government is uninformed and ill-equipped to administer, even before considering the harm done to the economy and the small amount of revenue that such a complicated and counterproductive tax would raise.
“Wealth taxes have been tried, failed, and largely repealed in industrialized countries, and the Biden White House should not be trying to import these disastrous policies to the U.S.,” Sepp said.
The stock buyback tax, which was originally included in the Inflation Reduction Act and only went into effect on January 1, 2023, effectively is a redistribution from investors and shareholders to the Treasury Department. This does not affect only companies and institutional investors: roughly 56% of Americans are impacted by the stock buyback tax, and raising that tax will hit those Americans in their pocketbooks. Moreover, the stock buyback tax disincentivizes new investment in the American economy, harming American dynamism as the economy continues to recover from the impacts of the COVID pandemic.
To discuss President Biden’s disastrous State of the Union tax proposals with an expert from the National Taxpayers Union, please contact Kevin Glass, NTU Vice President of Communications, at 703-299-8670 or at kglass@ntu.org.