President Biden says that his multitrillion-dollar tax increase “will not slow the economy. It will make the economy function better, and it will create energy.”
Biden could not have been more mistaken. The threat of a massive tax increase hanging over the economy has slowed what should be a booming recovery. It has disrupted economic growth. Over the last six months, businesses and workers have been bombarded with stories out of Washington about the coming tax increases and the potential damage to the economy. Much of the congressional work on tax increases has been done in secret, with no public hearings or open discussion. New and radical tax proposals seemingly surface every week.
These potential tax increases, as well as the prospect of more deficits and debt, have created real economic headwinds, affecting investment and hiring decisions, and crushing consumer confidence.
The people are not pleased with what has happened to the economy. An NBC News poll indicates that 71% of respondents believe we are heading in the wrong direction, 57% disapprove of Biden’s handling of the economy, 65% believe the economy is in poor shape, and nearly half believe it will get even worse next year.
Most folks blame Washington for these economic problems. According to a recent Gallup poll, a majority of respondents believe “the government is trying to do too many things that should be left to individuals and businesses.” In the same survey, only 19% of respondents support higher taxes and more government spending. Half of respondents say they prefer less government and lower taxes, while 29% want no changes in tax and spending levels.
With prices rising out of control and growth slowing, it makes no sense to keep pushing massive tax increases. Let’s instead focus on economic recovery.
Bruce Thompson was a U.S. Senate aide, assistant secretary of Treasury for legislative affairs, and the director of government relations at Merrill Lynch for 22 years.
