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The so-called Build Back Better Act proposed in the House of Representatives, with its “economically costly and inefficient tax increases,” will result in reduced economic output, wages, and jobs, according to a new report by the nonpartisan Washington-based Tax Foundation.

“We find that long-run GDP would drop by a little over $1 for every $1 in new tax revenue,” writes the foundation’s Garrett Watson.

The Foundation’s General Equilibrium Model estimates that the Ways and Means tax plan would reduce long-run GDP by about 0.4 percent, which in today’s dollars amounts to about $129 billion of lost output annually.

Furthermore, the foundation estimates that “The tax changes in the plan (including IRS enforcement and excluding other non-tax revenue raisers like drug pricing) would raise about $124 billion annually in new tax revenue in the long run, conventionally estimated in today’s dollars, meaning for every $1 in revenue raised, economic output would fall by about $1.04.”

Starting with a 0.05 percent drop in GDP in the first year (about $11 billion) and building to a 0.26 percent drop in GDP by 2031 (about $86 billion), the plan would result in a cumulative GDP loss of about $531 billion from 2022 through 2031.

The Organization for Economic Co-operation and Development (OECD) found that the corporate income tax is the most harmful tax for economic growth, and academic research suggests that workers, especially low-skilled, women, and the young, are negatively impacted through lower wages.

The report notes that “Even before accounting for a smaller economy, taxpayers earning less than $400,000 would see lower after-tax incomes due to higher corporate taxes and higher taxes levied on nicotine.”

Additionally, the economic harm caused by the tax increases would claw back some of the plan’s permanent full refundability of the child tax credit (CTC) aimed at low- and middle-income families. For taxpayers in the bottom 20 percent, it would reduce the average net benefit of the plan per filer from $54 to $7, nearly wiping out the average benefit per filer.



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The annual inflation rate in the U.S. edged up to a 13-year high of 5.4% in September of 2021 from 5.3% in August and above market expectations of 5.3%. What is hard for most consumers to grasp is that inflation is a hidden, insidious tax that affects everything. It affects low-income families who struggle to pay for food and services, and harms the vital middle-class needed for a stable society.

Not only does it eat away at the value of the dollar, it devalues other assets such as real estate. A 5% rate of inflation will lessen the value of a person’s home by 5% regardless of market value, without the owner’s being aware of it.

Biden’s proposed spending bill is in the trillions of dollars.  Whether it is partly funded by tax increases or not, it will cause massive inflation over and above the present rate and will bring back painful memories of the inflation that ravaged the country under the administration of peanut-farmer Jimmy Carter (D).

Washington politicians are very skillful at raising taxes through inflation. Politicians love inflation because creating money from nothing makes it easy to finance wars and pork. Whenever money is needed by the federal government for wars or pork, the Federal Reserve will buy securities from the U.S. Treasury by means of a check drawn on itself. The Treasury then uses this new money to finance increased federal spending. The Fed is the only entity that can legally create money from nothing. Created by anyone else, it is called counterfeiting.

Newly created money from nothing floods the economy and makes all assets, whether liquid or not, worth less. If Biden’s spending bill becomes law, even consumers in the middle-class will struggle to pay their bills and the entire economy of the U.S. will suffer.


The Free Market Punishes Failure And Rewards Success

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By: Val W. Zimnicki

The free market punishes failure and rewards success. What can be fairer than that? Its counterpart, government bureaucracy, often does the reverse with its rules, regulations and mandates. The ups and downs in a true free market shake themselves off and allow any failures to try again. Free markets establish the value of goods and services. Conversely, bureaucratic central planners can only guess at product values. These uninformed administrators “who know what’s best for us” can only guess at product usefulness and will over-tax it.

A free market is the result of voluntary actions, not regulated directives. Ironically government mandates do not penalize those who make them and uninformed administrators are not held accountable for their bad decisions. Indeed, anti-business government resolutions often lead to promotions and bigger departments. Absurdly, government mistakes are rewarded with more government.

A free market is the result of voluntary actions by independent citizens. However, government approval of these goods and services is expensive and often takes a long time. Profit and loss are not important to government bureaucrats because there is plenty of money to print and even more to tax. Even unpalatable government services force the public to pay for them. This waste does not discourage federal and state agencies from their unnecessary protocols. This, of course, does not deter administrators from their unnecessary activity. After all, success, for them, is measured by the growth and size of the various government departments and their growing budgets. Waste grows government and is inherent in a bureaucracy.

High taxation is used to pay for this while simultaneously imprisoning economic and personal freedom.
The solution to growing government market intervention is to reduce taxes that support unnecessary government behemoths. Voting for fiscally responsible representatives is essential.

We should be allowed to buy whatever we want, to buy from whomever we want, and at market prices. Some think this is too much freedom and prefer to be told how we should lead our lives while being overtaxed doing it. They often work in government jobs.