Democrats’ Budget is “Progressive” but Not Conducive to Economic Progress
Progress isn’t really progress when it’s hurting people and slowing down the economy. Heritage explains just how backward the Senate Democrats’ Budget, drafted by Sen. Patty Murray (D-WA), truly is:
Murray’s tax plan singles out corporations and individuals that are already faced with high tax rates. While most industrialized nations are moving to reduce their corporate tax rates, Murray plans to increase America’s effective corporate tax rate.
Higher corporate tax rates are the exact opposite path taken by most other industrialized countries. The United States has the highest corporate tax rate in the world, and its competitors have been reducing their corporate tax rates. For example, Germany has reduced its top tax rate from 45 percent to 15 percent over the past 13 years. Overall, the European Union has reduced its average corporate tax rate by almost 10 percentage points since 2000. Many economists deem the corporate tax as the most harmful tax to economic growth.
We’re human beings and incentives affect how we operate. The same can be said for disincentives. And in a nation that thrives on businesses small and large, this type of taxation can only harm us.
Why and by how much?
Heritage experts estimate that increasing taxes on capital and corporate income would slow business investment by $82 billion annually over the 10-year forecast.
If decreasing sustainable, private-sector investment is what goes for “progressive” these days, we probably need to change the definition of “progress.”
But don’t think that businesses will be negatively affected in isolation. Heritage experts also explain that Murray’s new taxes would “leave households with an average of $1.8 trillion less net wealth annually.”
This whole scheme is going to come back to bite the federal government. When the economy slows, as it did in 2008, it means less revenue for the federal government.
As Heritage concludes quite rightly, this budget is just insulting:
It is bad enough that the Senate Budget Committee has abdicated responsibility on fixing entitlements, but the salt in the wound is the harmful higher taxes that would impact American businesses, individuals, and families.
It would be disgrace if after standing on the sidelines for nearly four years, the Senate passes a budget that looks anything like Patty Murray’s tax-and-spend budget.