WASHINGTON, DC, Sep 23 — Happy birthday has a different meaning when you turn 50. You suddenly realize you have joined the ranks of “mature American citizens.” The not-so-good news is you’re old. The good news is that you’re getting old enough to start planning for retirement. Not so fast, say President Biden and his progressives in Congress; they need you to contribute more in taxes. In fact, they are proposing $2,000,000,000,000 worth of tax increases — $2 Trillion– “Trillion,” with a capital T.
After all, they need to increase taxes in order to fund a $3.5 trillion spending package loaded with socialist freebies. “The massive tax hike being pushed by President Biden and congressional Democrats would be the largest tax increase since 1968, and almost no aspect of the tax code is left untouched,” says Senator Rob Portman [R-OH].
In remarks he made on the Senate floor recently, Portman pointed out that It’s not just income taxes that would be increased. If you have a retirement account, it will be taxed at a higher rate. If you have a small business, it will also suffer the burden of higher taxes.
And then there are Estate Taxes. AMAC takes the position that these so-called “death taxes” should be repealed. Instead, Portman notes that the Biden tax plan calls for a substantial increase. Capital gains taxes will be increased as well, and the Senator says this is problematic because it would inhibit investment, and what this country needs right now is an increase in investments that create jobs and make us more productive.
The experts will tell you that the two elements that can upset your retirement apple cart are inflation and taxation, and under Biden and his progressive cronies in D.C., both are on the upswing. The likelihood that both will continue to rise is certain, bearing in mind that inflation and taxes were checked at reasonable levels by President Trump and GOP members of Congress.
But things started going awry within just two short months after Biden took office. The rate of inflation under President Trump remained at tolerable levels — between 1.4% and 2.3% — during his presidency. But then, in February, inflation began an upswing. The rate was at 2.6% by March and continued to rise. Right now, it stands at about 5.3% — the highest level in a dozen years or more.
As for taxes, as has been discussed, you can make a bet that the rates of taxation will rise to new, higher levels. Among other things, Mr. Trump lowered tax rates, allowed taxpayers to take higher standard deductions, and doubled the estate tax exemption. Mr. Biden has unabashedly declared that he will be raising taxes in the coming year.
In his Senate speech, Senator Portman reminded us that big businesses and megabuck citizens have options we poor mortals don’t have in the high inflation and higher tax Biden era. He pointed out that during the Obama administration, American companies started moving to foreign lands. At the time, our tax laws were so bad that countries with more reasonable corporate tax structures became very attractive to them, and they left town. The 2017 Trump tax cuts brought them home.
Over the past several years, we’ve seen an exodus of the very wealthy seeking to reduce their tax burdens by renouncing citizenship and relocating to tax havens around the world. In fact, it’s become a lucrative business for international tax attorney David Lesperance who specializes in helping people renounce U.S. citizenship. It’s been that since the Biden tax hikes were revealed — including a proposed a hike in the top capital gains tax to 43.4% — he’s been receiving “lots of calls” from rich would-be ex-pats seeking his advice and help.
As for inflation, rich folks are not particularly worried about inflation. And they have an advantage when tax rates get too high. They can renounce their citizenship, leave the country and take up residency in a cozy tax haven where governments will welcome them with arms wide open.
Mr. Portman concluded his speech before the Senate by noting that in 2017 President Trump’s tax reforms created economic growth on a large scale. It launched an era of growth for businesses large and small. In turn, it empowered America’s workforce. The Trump tax reforms of 2017 “helped usher in an economy powered by workers, empowered by small businesses, empowered by more competitive, larger businesses. It wasn’t powered by big-spending here in Washington, D.C.”
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