Sen. Steve Daines: Biden’s tax-and-spend agenda will hurt not help America recover from COVID

As we work to lift ourselves out of the coronavirus pandemic-induced recession, America needs a plan that will reward hard work, boost our small business owners, and help Americans get back on their feet. 

What President Joe Biden has presented to us instead is a plan for keeping folks at home and dependent on government handouts. 

We saw in 2017 how tax reform championed by Republicans increased new investment and led to historic economic growth. President Biden is ignoring what we know works and going back to the old tax-and-spend playbook of the Democrats—something that is already showing signs of failure with the recent jobs report’s dismal numbers. 

Before the COVID-19 pandemic, the United States was experiencing one of the biggest economic booms in our history. Unemployment reached a 50-year low and real incomes reached record highs. 

This was made possible because Republicans worked to cut taxes and reform the tax code which put more money in the pockets of Americans and spurred new investment and economic growth. 

In contrast, according to the well-respected Penn Wharton Budget Model’s analysis, President Biden’s latest massive spending proposal would shrink long-run GDP by 0.8%. Even without the tax hikes, President Biden’s proposed spending provisions would shrink GDP by 0.3%. 

As things are now, China’s economy could surpass ours in the next five to 10 years, and Biden’s tax-and-spend agenda is putting America at an even greater disadvantage. 

Biden’s promises of increasing taxes and his massive welfare boosts are disincentivizing work and keeping Americans on the sidelines of our economy.

I’m hearing from businesses across Montana about the challenge of finding workers to fill open positions. This isn’t an unusual problem when you think about it—why would people go back to work when they are making more money staying home? 

Thankfully under Gov. Gianforte’s leadership, Montana is leading the way in reversing this trend by offering a back to work bonus and ending the expanded unemployment payments. 

It’s working. Within days of this announcement, one Helena business went from receiving about 1-2 job applications a week to receiving 60 applications in just three days. 

Biden is solidifying his efforts of keeping Americans out of the workforce with his tax hike proposals. Biden wants to raise the income tax. He’s disregarding studies that have shown doing so leads people to either work less or drop out of the workforce altogether. 

As we come out of this pandemic, taking money out of the pockets of hardworking Americans is not the solution. We don’t have a revenue problem; we have a spending problem. 

Biden wants to double the capital gains tax. When you combine the state/local capital gains rates with the Medicare surcharge, what Biden is proposing could reach north of 50 percent in many states. That’s higher than any other country in the world—including China. 

Doubling the capital gains tax will be a net loss for both revenue and the economy, as well as savings and investment. 

The Penn Wharton Budget Model has said proposals like this could actually reduce tax revenue as Americans will hold on to their investments to avoid these sky high tax rates. 

If Americans choose to hold on to their funds, that’s less money being reinvested back into the economy and in our communities to help speed the recovery. This isn’t a new phenomenon. 

In fact, when President Clinton was in office, he actually lowered the capital gains tax by 29%. What happened after he did so? Revenue increased. 

Biden also wants to increase the corporate tax rate, which Republicans lowered in 2017. Republicans’ work to reform the tax code, close loopholes, and incentivize investment helped finally end the trend of American companies moving overseas. 

Biden is claiming that increasing the corporate tax rate will “end the race to the bottom.” The truth is, it will just restart the corporate inversions we saw under President Obama as businesses flee to countries with friendlier tax environments. 

Americans are hungry for a strong economic recovery. However, Biden’s tax hikes coupled with his massive spending proposals won’t deliver this. 

Not only will they kill jobs and reduce wages, they will hurt America’s global competitiveness. We will see our jobs and businesses go overseas, and we’ll be taking a back seat to China. 

No matter how you look at it, at a time when we most need economic growth, Biden is proposing a plan for economic stagnation. 

Inflation has risen to a 13-year high, and none of us want to see our pandemic recovery threatened or stunted by Biden’s reckless tax-and-spend plans that will do nothing to combat it. 

In 2017, Republicans showed the nation the path for economic revitalization. President Biden should follow it.