President Joe Biden’s plan to raise taxes on the American middle class and the wealthy is estimated to cost upwards of one million jobs in the first two years of its implementation, according to a newly released study by the National Association of Manufacturers.
Breitbart reports that the study estimates the long and short-term economic damage that Biden’s proposed tax hike plan will cause. The plan includes repeals of former President Donald Trump’s economic policies, which enabled U.S.-based manufacturers to increase the size of their workforce.
In a summarization by Jay Timmons, the CEO and president of NAM, stated that undoing Trump’s reforms will put American manufacturing at “significant risk.”
“After decades of advocating for a tax system that provided competitive rates and modern international tax provisions, manufacturers in America kept our promises following the enactment of the 2017 tax reforms: we raised wages and benefits, we hired more American workers, and we invested in our communities,” said Timmons.
“If we undo those reforms, all of that will be put at significant risk,” he added. “Manufacturing workers will lose out on jobs, growth, and raises. We should be building on that progress, not rolling it back. But the conclusion of this study is inescapable—follow through with tax hikes that give other countries a clear advantage and we’ll see far fewer jobs created in America.”
The study, which was co-authored by Rice University economists John W. Diamond and George R. Zodrow, calculates the effects of increasing the corporate tax rate to Biden’s proposed 28 per cent, increasing the top marginal tax rate, repealing the 20 per cent pass-through deduction, repealing some expensing provisions and taxing capital gains as ordinary income for top earners.
The study found that in the first two years alone, the GDP of the United States would be slashed by $117 billion by 2023. Furthermore, investments in equipment and structures would be $80 billion less in the same period.
“There are some who are well-meaning and have suggested that the U.S. corporate tax rate should increase, but not by as much as the 28% proposed. Unfortunately, what that means is that America will still lose jobs and investment, just not quite as much. America just can’t afford that, especially now,” Timmons said.