I thought I would be protected from having to pay for the barrage of spending programs that Congress has passed or is considering. After all, I was promised that I would not see my taxes go up even a nickel if I earned less than $250,000. Heck, I was even safe with the Biden revision to $200,000 as the definition of “rich”.
But now I am beginning to see the con, the semantic dodge, the switch behind the curtain.
We will soon be told the president meant “income taxes” only. 95% of us got a tax cut? Well, even it that were true, how about the other taxes? Mandating employer provided health care will definitely cause money wages to fall and the prices of goods and services to rise (25% of employees of small businesses would prefer cash to a health care plan).
That’s a tax.
Then there are higher sin taxes being considered, on cigarettes, soda, and the like. And “cap and trade”, estimated to add thousands to the electric bills of consumers and to raise gasoline prices to pay for the permits. Sales taxes are being raised by states and even cities. This is the stealth taxation that Congress loves. Instead of being angry at Congress for raising taxes, consumers will rail against utilities, refiners, snack food manufacturers, and every business that will have to raise its selling prices to cover the increased costs imposed by this legislation.
Bottom line, consumers will notice that their incomes buy less stuff because prices are up everywhere, ultimately filling the tax coffers. Governments will have more, consumers will have less. It’s as inevitable as the bankruptcy of GM (that I predicted in commentaries a decade ago, I have a friend who ignored that warning and bought a dealership!). The unions used their market power with government backing to tax the purchasers of cars – until imports arrived to expose the extortion. That’s what markets do well.
And how about the $50 billion taxpayer investment in GM? Well, GM’s market value will have to reach an all time record high to give taxpayers their money back. Want to put odds on that?
Well, at least there are “jobs saved” – union workers still get paid above market wages and benefits at the old Big 3. There will be few new hires at the agreed upon lower “market rate” since these old companies are not going to grow much if at all.
Now were stuck with it.
William Dunkelberg is an Economic Strategist, Boenning & Scattergood and Chief Economist, National Federation of Independent Business.