We’re getting real life pictures of how the new world will look like under the Biden regime. A friend passed on information from a CPA tax update seminar reviewing changes expected to come out of the Biden-Harris administration’s liberal bag of tricks.
It’s not a pretty sight, but really no surprise. The Left’s primary strategy is to go after businesses and the more affluent. There is an expectation that the corporate income tax for business will rise to 29% (from the current flat rate of 21%). The individual maximum tax rate is expected to rise from 37% to 39.6%. And the federal government would reduce the gift and estate tax exemption to the 2009 Obama-era level and increase the rate from 40% to 45%.
Recent articles reflect the liberal shift. According to Bloomberg.com last week, “a 100-day tax agenda has been put together by the liberal Americans for Tax Fairness.” This plan calls for Biden to “increase IRS enforcement, require presidential candidates to release their tax returns, and start rolling back tax preferences for wealthy individuals and businesses.”
The Bloomberg article goes on to cite other pushes by liberal groups to radically shift the tax code. “Democrats can’t lose sight of the fact that Biden ran on a really boldly progressive tax agenda, and he won decisively by more than 7 million votes. And I think that’s something we shouldn’t forget,” Seth Hanlon, a senior fellow at the left-leaning Center for American Progress, said. “Democrats have the public on their side.”
Considering one of the main elements of Biden’s tax plans includes increasing taxes on those earning at least $400,000, the Americans for Tax Fairness group is hopeful that public sentiment will pave the way. They base their hope on “a November New York Times-Survey Monkey poll that shows raising taxes on that segment of the population is popular with 85% of Democrats, 70% of independents, and even 45% of Republicans.” According to the Bloomberg article, Democrats also point to a 2019 Gallup poll that showed only 27% of the respondents agreed that high-income individuals pay their fair share in taxes, and “only 23% said that of corporations.”
How does that affect us here in North Carolina? The Reform Majority won back majority control of both the NC Senate and the NC House. The House vote margin is even better than before the election. So there shouldn’t be a shift in state tax laws. One caution however is that if the national press is as strong for the Biden agenda as expected and liberal groups are on the march in support of tax changes, there could be significant pressure on the NC legislature to “do something” to show they are sympathetic and reasonable.
Governor Cooper will surely be in lockstep with his ideologically “progressive” brethren and will add tax increases to his seemingly daily mantra of Medicaid expansion.
We expect the Reform Majority to hold fast and hope they will be as “shrewd as serpents” as they deal with a changed NC liberal leadership with members that we believe will be even more vocal as they try to echo the emboldened leftist Gang in Washington.