This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Biden’s tax hikes could hasten the onset of a recession, experts warn
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Trending > Biden’s tax hikes could hasten the onset of a recession, experts warn
Trending

Biden’s tax hikes could hasten the onset of a recession, experts warn

Editorial Board Published April 19, 2022
Share
Biden’s tax hikes could hasten the onset of a recession, experts warn
SHARE

President Biden’s proposal to raise taxes across the board could hasten the onset of an economic recession, economists say.

The analysts say Mr. Biden’s push to raise corporate, income and other taxes by more than $2.5 trillion would kill thousands of jobs and curtail private-sector investment. 

Those effects, coupled with the Federal Reserve’s aggressive interest rate hikes, would send the economy careening into a quicker and deeper recession than most experts say is on the horizon.

“This would be like lighting a match to a forest fire,” said Steve Moore, a onetime economic adviser to President Trump. “If we were to raise taxes right now, that would have an extremely negative effect on the economy.”

Most economists say that with the nation facing a supply chain crisis and inflation climbing to 8.5% — with few signs it will slow anytime soon — Mr. Biden’s tax hikes would only exacerbate the situation for individuals and companies.

Proposed tax increases on individuals would prevent wealthy Americans from investing directly or spending enough to get the economy moving out of a recession.

“It’s been observed that should higher taxes fall on higher-income earners, investment capital will decline,” said Carl Schramm, an economics professor at Syracuse University. “This is exactly what no one would want going into a recession.”

Private-sector investment likely will plummet if Mr. Biden succeeds in raising the corporate tax rate from 21% to 28%. It would prevent manufacturers from producing more goods and services, especially those that are already in short supply.

The effect, in turn, would do little to counter inflation, which many economists say has been driven by Congress pouring too much money into the economy via coronavirus stimulus payments and a genuine lack of goods and services because of the supply chain crisis.

“If you tax businesses more, you’re going to get less output and that’s going to make inflation worse, not better,” Mr. Moore said. “If you keep letting inflation linger, it becomes like a cancer cell in the body. It grows and gets bigger, and the more it lingers, the harder it is to take out.”

The impact would not be any better for individuals. Mr. Biden’s corporate tax hike is estimated to kill more than 138,000 jobs over the next decade alone, according to the nonpartisan Tax Foundation.

Fewer jobs means less money going into the economy through consumer spending on goods and services. Economists say the latter would decrease anyway because Mr. Biden’s income tax hikes would eat away at the amount of money that upper-income individuals have to spend.

Mr. Biden’s proposed tax increases are raising concern as economists and financial institutions sound the alarm about a looming recession. Many say the Federal Reserve System’s efforts to lower inflation by raising interest rates will likely push the economy into a tailspin.

Bank of America warned its clients last week that the economy, wracked by supply chain issues and an overly generous COVID-19 relief package, appears primed to shrink as interest rates jump.

Michael Hartnett, Bank of America’s chief investment strategist, predicted a “recession shock” by the end of next year or soon thereafter.

Economists say those initial estimates are based only on the Federal Reserve’s signal that more aggressive interest rates hikes are coming. They note that few financial institutions have weighed the impact that Mr. Biden’s tax hikes, if implemented, could play.

“These calls are all based on inflation rates and interest rates. They do not appear to take into account the impact of high taxes,” Mr. Schramm said. “If President Biden were to succeed in getting tax increases … it will push us towards recession much faster.”

The warnings do not bode well for Mr. Biden and other Democrats, who retain narrow control of Congress. Democrats were already expected to lose seats because the incumbent president’s party historically has done poorly in the first midterm elections.

Still, Mr. Biden has defended his push to raise taxes. He says corporations and the wealthy need to pay “their fair share.”

“The Trump tax cuts added $2 trillion in deficit spending and largely helped the rich and the largest corporations,” Mr. Biden has said. “My budget raises the corporate tax rate to 28%, far lower than the rate it was between World War II and 2017 when it was lowered.”

At the moment, Mr. Biden’s tax hikes face long odds of becoming law.

Given universal Republican opposition to raising taxes, the only hope for the proposal making it through the evenly split Senate is via a party-line process known as budget reconciliation. The process allows some spending and tax measures to pass by a simple majority of 51 votes rather than the more customary 60 votes needed to avert a filibuster.

Democratic unity is not assured, however. Sen. Kyrsten Sinema, Arizona Democrat, has expressed opposition in the past to raising corporate and income taxes.

Although most political insiders expect the opposition to hold, Republicans say that even the threat of raising taxes could damage the economy during this tenuous time.

“We ought to be driving more investment in the U.S.,” said Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee. “New innovation is what the administration [should be] championing, but they are still stuck … talking about a trillion and a half dollars of tax hikes on job creators at the worst possible time. [Businesses] pay attention to this.”

TAGGED:RSS
Share This Article
Twitter Email Copy Link Print
Previous Article Ezra Miller, ‘The Flash’ actor, arrested again in Hawaii Ezra Miller, ‘The Flash’ actor, arrested again in Hawaii
Next Article From YouTube to Rutube. Inside Russia’s Influence Campaign. From YouTube to Rutube. Inside Russia’s Influence Campaign.

Editor's Pick

I attempted Google’s new Search Dwell function and ended up debating an AI about books

I attempted Google’s new Search Dwell function and ended up debating an AI about books

Google’s new Search Dwell function lets customers maintain real-time voice conversations with an AI-powered model of Search The Gemini-powered AI…

By Editorial Board 6 Min Read
AI at Scale: Mohammed’s Revolutionary Architecture Behind the World’s Fastest Website Builder
AI at Scale: Mohammed’s Revolutionary Architecture Behind the World’s Fastest Website Builder

In an extraordinary technological breakthrough, Abdul Muqtadir Mohammed has fundamentally transformed how…

7 Min Read
Bobby Flay Pays Tribute to Anne Burrell: She was Unforgettable…
Bobby Flay Pays Tribute to Anne Burrell: She was Unforgettable…

Studying Time: 3 minutes Bobby Flay is the newest movie star to…

5 Min Read

Oponion

Now two San Quentin jail staffers have been indicted over previous two months

Now two San Quentin jail staffers have been indicted over previous two months

SAN QUENTIN — Federal prosecutors have been uncovering alleged crimes…

November 11, 2024

Peloton, Marathon Digital, Coinbase, Spirit Airlines: What to Watch in the Stock Market Today

By James Willhite Close James Willhite…

February 7, 2022

Brian Wilson Reason behind Loss of life: Seashore Boys Founder Passes Away at 82

Studying Time: 3 minutes A founding…

June 11, 2025

Every little thing You Must Host the Final Christmas Film Evening

I stay (sure, LIVE) for film…

December 14, 2024

Asking Eric: My husband’s sturdy emotions about my yearbooks increase a pink flag

Pricey Eric: I wish to eliminate…

September 16, 2024

You Might Also Like

Model With a Mission: In Conversation With Maurice Giovanni
EntertainmentTrending

Model With a Mission: In Conversation With Maurice Giovanni

There are models who simply wear clothes—and then there are models who wear the weight of experience, resilience, and purpose…

4 Min Read
Global Security and Health Resilience: How AI-Driven Systems Could Reinvent National Safety—And the Visionary Behind the Shift
Trending

Global Security and Health Resilience: How AI-Driven Systems Could Reinvent National Safety—And the Visionary Behind the Shift

By Sarah K. McMillan | Enspirers Inc Imagine a world where your Provider is just an algorithm, and why that…

7 Min Read
How AI Is Being Used to Enforce Modern Kleptocracy
LifestyleTrending

How AI Is Being Used to Enforce Modern Kleptocracy

The Evolution of Kleptocracy in the Age of AI Historically, kleptocratic systems relied on bureaucratic manipulation, political prejudice, and covert…

7 Min Read
We’ve Cracked the Code to Reality — And It Changes Everything
LifestyleTrending

We’ve Cracked the Code to Reality — And It Changes Everything

By Nat Marconi The Matrix is broken. Or maybe more accurately, it’s been decoded. A sequence—unlike anything we’ve ever seen—is…

4 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?