President Joe Biden’s tax plan to raise the corporate income tax rate will not only affect the top 1% of the nation’s taxpayers, Grover Norquist, the president of Americans for Tax Reform, said on Newsmax TV Saturday.
“I tend to believe Biden in his campaign,” Norquist said on Newsmax TV’s “The Count.”
“He said he wanted to take the corporate rate from 21% up to either 28% or 35%; he vacillated between the two. But economists understand that 70% of the corporate income tax is paid in lower wages by workers.”
This means a “massive reduction in what people would be paid,” said Norquist, which would be the opposite of what happened when former President Donald Trump and the Republicans reduced the corporate tax rate in 2019.
At that time, the median income went up by 6.8% or $4,400, said Norquist.
But with Biden’s plan, “we’re going to, unfortunately, roll back from that,” he said. In addition to lower wages, the costs of utilities will also go up because the companies will pass on their costs to their consumers, he added.
“You saw your utilities drop billions of dollars in lower costs because you were no longer paying the corporate income tax,” said Norquist.
“So when Biden says ‘I would increase the corporate income tax,’ he’s going to increase your water utility bill, your electricity bill, your natural gas bill.”
Biden also wants taxes on people’s AR-15s, said Norquist, and there are about “16-plus million of those and most of them are not owned by billionaires. He also wants to double the capital gains tax, and last year, 25 million people filed capital gains returns. So that’s not the top 1%. That’s a number of people who are going to be paying Biden tax hikes.”
Joe LaVorgna, the former chief economist for Trump’s National Economic Council, who was also part of the panel discussion, pointed out that if Biden comes in with an infrastructure plan, there will simply not be enough money brought in through tax hikes to pay for it.
“They are saying (it) is going to be roughly $3 trillion in size,” LaVorgna said of the infrastructure plan. “The people that make, let’s say over $400,000 is the number President Biden mentioned that will pay the higher taxes, there are just simply aren’t enough of those people to tax to pay for the things that the administration wants to do.”
The concerns are being reflected in the financial markets, he added.
“We’ve seen a tremendous increase in interest rates, just to give you an example, in the first quarter,” said LaVorgna.”The 10-year Treasury note had its worse quarter since the 1970s. Rates are low, they’re still low, but they’ve gone up dramatically and partly in response to fears that we will have either inflation and/or inability to finance what looked to be impressive, the deficits.”
Meanwhile, the recently passed $1.9 trillion COVID relief bill includes a provision that keeps states from lowering taxes, and Norquist said that’s because Sen. Joe Manchin, D-W.Va., has a “personal dislike” of GOP Gov. Jim Justice, who wants to phase out the state income tax by looking at revenue that is coming in and using that to bring down taxes.
“About 10 states are looking to do the same thing, but because Manchin has a personal fight with Gov. Justice, he stuck it in there for all 50 states,” said Norquist, adding that Democrats in Georgia, New Hampshire, Arizona, and other states all voted to stop their states from phasing down their income taxes.
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