How Joe Biden’s Tax Hikes Will Damage the Economy and Hurt the Middle Class

As Joe Biden and Kamala Harris continue their tour across the country this week to tout their tax-and-spend “infrastructure” plans, studies have shown that Biden’s proposed tax hikes to pay for the packages will hurt economic growth.

To offset the costs of his $1.8 trillion American Families Plan, President Biden has called for nearly doubling the capital gains tax rate and repealing the “step-up in basis” tax benefit on inherited assets that have appreciated in value.

What does this mean for middle-class Americans?

According to a recent study conducted for the Family Business Estate Tax Coalition, if you inherit family-owned land, a house, a business, or any asset under Biden’s tax plans — you will be forced to pay taxes on the capital gains accrued by the previous owner. This could leave many Americans with big bills that put their financial futures at risk during some of their most vulnerable moments.

The study also revealed that repealing the “step-up in basis” tax provision would:

• Kill 80,000 jobs in each of the first 10 years
• Eliminate 100,000 jobs each year thereafter
• Reduce workers’ wages by $32 for every $100 raised by taxing capital gains at death
• Reduce GDP by approximately $10 billion annually and $100 billion over 10 years

While Joe Biden may claim his tax hikes will only affect the rich, an analysis from the University of Pennsylvania’s Wharton Business School shows that wealthy Americans will avoid paying 90 percent of Biden’s capital gains tax increase.

CBS News: “‘We don’t think that the proposal has a lot of teeth,’ said John Ricco, director of policy analysis at the Penn Wharton Budget Model, a non-partisan fiscal policy research group at the business school. ‘There are a lot of games you can play to avoid paying this tax.’”

Some rank-and-file Democrats are also voicing skepticism over Biden’s tax proposals, saying it would be difficult to justify the negative economic impacts to their constituents.

The Wall Street Journal: “‘For me, it is what you’re doing, the totality of the package, and how does it affect the ability of growth to continue to take place. That’s how I’m judging it. Right now it seems like a rather high rate to me,’ said Sen. Bob Menendez (D., N.J.), a member of the Senate Finance Committee, of the proposed capital-gains rate.”

Bottom line: Increasing the capital gains tax rate and repealing the “step-up in basis” provision is not simply a tax on the rich. It is a middle-class tax hike that could crush business owners, farmers and ranchers, and blue-collar workers across the country.