President Joe Biden recently introduced several plans in his State of the Union address aimed at large corporations and the wealthiest Americans.
He said the measure would reverse many large tax cuts enacted by the Trump administration.
The president said he wants the corporate tax rate to rise to 28% and the minimum corporate tax rate to 21%. Biden has also taken aim at multinational corporations, seeking to raise the tax rate to 21%. Other proposals included raising taxes on stock buybacks, limiting CEO compensation and cracking down on tax loopholes for corporate jets.
The Wall Street Journal Editorial Board criticized the speech as partisan, saying that Mr. “Large landlords who operate their cars in violation of antitrust laws by manipulating prices,” he said, are being demonized. such as rent increases. ”
Q: Is President Biden's tax increase plan on the right track?
Caroline Freund, School of Global Policy and Strategy, University of California, San Diego
yes: It makes sense to tax the rich and big corporations more heavily to reduce soaring inequality while improving access to health care and education. However, details matter and investment implications require further scrutiny. Additionally, passing this budget without Congressional control is a complete dud. This proposal is a campaign story, and while it is a laudable goal, it is more extreme than appropriate or achievable.
Kelly Cunningham, San Diego Economic Institute
no: President Biden's partisan attacks will further weaken the economic prosperity his administration has already derailed. The economic costs of the proposed tax increases on highly productive companies would be borne primarily by average Americans and workers. Companies respond to tax increases by raising prices, suppressing wages, and reducing job creation rather than absorbing the taxes themselves. The result is lower economic growth, fewer new business starts, and less job creation. Penalizing production does not increase a country's wealth.
Lynn Reaser, economist
yes: While the 2017 tax cuts did stimulate investment, they did little to raise the funds themselves. Fairness and equity advocate rebalancing. Raising the corporate tax rate to 28% and setting a floor at 21% would be a step in that direction. Setting the foreign tax rate at 21% would bring it in line with international standards. Keeping tax rates low for people with incomes below $400,000 and raising them above that threshold should move toward reducing income inequality.
Phil Blair, Manpower
yes: There is no reason why someone could have a net worth of hundreds of billions of dollars and not pay heavy taxes. With so many people struggling in the lower and middle classes every year, we need to consider some kind of tax equalization mechanism to distribute all of that extremely excessive wealth around. I'm specifically talking about additional taxes on net worth of $250 million or more.
Gary London, London Moder Advisors
yes: SOTU proposals have always been ambitious confectioners, tempered by the passage of time and the opposition Congress. However, I think various proposals to reduce housing costs are important. Raising corporate taxes, a minimum tax on billionaires, eliminating loopholes, and reducing the deficit are among the most laudable ideas. In the long term, there must be a plan to reduce the national debt.
Alan Ginn, University of San Diego
yes: Data shows that the federal budget deficit increased significantly after each tax cut in the Reagan, George W. Bush, and Trump administrations. Many of the benefits of these tax cuts went to high-income earners. At the same time, corporate profits soared despite (or perhaps because of) moving millions of American jobs offshore. Therefore, if spending cuts are needed to address budget deficits, they should be accompanied by tax increases on those who have benefited from previous tax cuts.
Bob Rausch, RA Rausch & Associates
no: Tax increases will curb personal consumption and business investment, reducing disposable income. When that happens, consumer confidence declines. If pork were removed, the tax rate would already exceed the rate needed to pay the U.S. bill, and raising the tax rate could make companies less competitive internationally. Higher taxes reduce the economic rewards for taking risks and starting new businesses, discouraging entrepreneurship and innovation. This was his preview of wealth distribution in 2025 — taxpayers beware.
James Hamilton, University of California, San Diego
no: A company's profits are either paid out to shareholders as dividends or reinvested in the company. Because dividends are taxed directly as shareholder income, taxing corporate profits would double tax the same income and take away money that could be invested in America's future. Investments paid for by corporate profits have given us the information and communications revolution, electric cars, drugs to solve obesity, Alzheimer's disease, and many other serious problems.
Austin Newdecker, Weave Growth
yes: President Biden's tax proposal represents a positive move toward addressing economic inequality and funding essential services. Measures such as closing tax loopholes, enforcing a corporate minimum tax on multinational corporations, and funding the Medicaid program and the IRS are laudable. However, care should be taken when pursuing other aspects, such as higher corporate tax rates or penalties on corporate executive compensation. Striking the right balance is important to foster economic growth while ensuring tax fairness.
Chris Van Gorder, Scripps Health
no: Tax increases will generally suppress growth, and slower growth will affect employment and employment. I understand the political position of the tax company rather than the voters, but the cost is always passed on to the customer in the form of an increased burden.
Jamie Moraga, Franklin Revere
no: Raising taxes is not the solution. The president has to make difficult decisions and cut government spending, but he lacks the political will, especially in an election year. The US debt is estimated at $34 trillion and rising. You can't target specific groups or companies and remove their debt from your taxes. These proposed tax increases could jeopardize economic growth, make the tax code more complex, and increase government spending. The national debt has increased by more than $6 trillion since President Biden took office. We must stop raising taxes and instead cut out-of-control spending.
Norm Miller, University of San Diego
no: We must be careful not to overtax large corporations. Otherwise, large companies will move to low-tax countries. Pay for CEOs of public companies is increasing at a much faster rate than for the average employee, but rather than tinkering with the cap rules, they could simply raise the marginal tax rate for the highest earners. Residential landlords do not determine the price of rent. They charge what the market will bear and have many uncapped costs such as insurance. We would be better off with less market intervention, lower inflation and interest rates, and more housing supply.
David Ely, San Diego State University
no: The president's budget proposal would increase tax revenues as a share of GDP from 16.5% in 2023 to 20% by 2031. It would also increase federal spending as a percentage of GDP. Changes to the tax code are worth discussing, but we should be concerned about the federal government becoming a bigger part of the economy. Additionally, some of the high taxes collected from businesses will definitely be passed on to consumers.
Ray Major, Sandag
no: Raising taxes is not the solution to the economic woes facing this country. It's easy to target multinationals and successful companies, but that doesn't solve the real problem. The solution lies in cutting spending. The current economic climate, with inflation twice the federal target, high interest rates, and unaffordable prices, is largely due to the trillions of dollars injected into the economy over the past four years. That's the root cause of the problem.
Not participating this week:
Honey Hong, San Diego County Taxpayers Association
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