President Joe Biden has been telling lies. It's true that there's more than one lie; he's told numerous stories. However, one lie comes up repeatedly in almost all of his statements: He does not intend to increase taxes on those who earn less than $400,000 a year.
However, we've seen that Biden has increased costs for every American with inflation, which he has also described as “transitory.” Biden's Build Back Broke (BBB) plan proposed $2.5 trillion in tax increases, which would grant the U.S. the highest, or close to the highest, tax rates of the world's developed countries. It was a blessing that it didn't get passed, though the tax hike part could be alive and well.
Joe Biden has been saying that Congressional Republicans will raise taxes and abolish Social Security and Medicare. This is a big lie. Senator Mitch McConnell (R-KY) has stated clearly that Republicans will not adopt any of these measures.
It turns out that it's not possible to say the same thing about Democrats. Senate Majority Leader Chuck Schumer (D-NY) has admitted to the world, via the cat's mouth, that they're trying to push for higher taxes, even with the BBB dropping in defeat. Their plan for Americans suffering from inflation is to take even more money from their pockets. Take note that Schumer not only claims they're going to do it; he also lies regarding Trump’s tax cuts. “Reconciliation is very, very important,” Schumer recently noted. “If you're looking to eliminate inflation, one way you can accomplish it is to repeal many of Trump tax [cuts] and to increase rates. No Republican is ever going to do that. So the only way to get rid of inflation is through reconciliation.”
That's right, Republicans wouldn't vote to increase tax rates for people. Democrats need to work to pass it in the reconciliation process, so they can try to slip it through without Republican support. Democrats have fueled inflation through Biden's spending spree, and now they'll make it worse by increasing taxes, should they decide to go through with this plan.
In the meantime, they're deceiving themselves about Trump’s tax cuts, which were one of the main reasons the economy performed well under the presidency of Donald Trump. Tax cuts have helped a lot of Americans, contrary to the Democrats’ claims.
“The available evidence is clear: Based on tax data from 2017 and 2018, the Tax Cuts and Jobs Act reduced taxes for the vast majority of filers, led to substantial improvements in upward economic mobility, and disproportionately benefited working- and middle-class households, many of which experienced tax cuts topping 18 percent to 20 percent,” analysis by Heartland Institute explained.
In a bizarre way, it is ironic that the San Francisco Federal Reserve has blamed the current inflation crisis partly on Biden's COVID-related relief bill, which has injected billions into the market.
McConnell made a point that it's Democrats who are coming after your money, and big time. The Wall Street Journal pointed out that Schumer was outright wrong about tax hikes lowering inflation.
It's the same idea that claims the federal government can spend as much as it wants without worrying about the rising costs of goods and services. In the meantime, the Federal Reserve (the Fed) can simply keep lowering interest rates and fund whatever the politicians decide to spend. It's true that Congress and the Fed followed academic Stephanie Kelton's suggestion, and now we have the highest rate of inflation of the past 40 years.
The “raise-taxes” strategy puts the issue of inflation exactly backward. Congress and the Federal Reserve pumped up demand for two years until the point that the supply of goods and services could not keep up. The Fed is now doing its part to reduce demand with a delayed rise in interest rates and is planning to reduce its balance sheet. The most effective way to combat inflation is to have a better monetary policy.
Tax increases could cause inflation to rise further by restricting the demand aspect that drives the economy. This is particularly true for the corporate-tax hikes that Mr. Schumer is promoting. They'll stifle investment in productive sectors specifically when the economy requires it to counterbalance the Fed's tighter financial policies. This was the case in the 1960s and 1970s when tax increases on profits of corporations and personal incomes led to inflation through slowing the growth of investment and productivity.
Also, Schumer would not only steal money from our pockets, he'd also make the current inflation more severe, because Democrats do not comprehend the economics behind their policies.