It’s still shocking that officials say Bidenomics is working for the middle class – Americans know better
Here's a few 'factoids' about the economy under Biden: Larry Kudlow
FOX Business host Larry Kudlow explains the reality of 'Bidenomics' on 'The Ingraham Angle.'
You could say this much for President Biden’s State of the Union address Thursday night: If you paid close attention, get ready for four more years of tax-and-spend policy with a cloak-and-dagger act we haven’t seen the days of the Renaissance.
It may be more like math checking versus fact checking, but every time we hear Joe Biden talk about tax policy, it feels more like a campaign for student council class president offering more recess and free lunch.
Here’s why Bidenomics isn’t working for the middle class and what might happen over the next four years.
President Biden traveled to Wisconsin on Jan. 25 to talk about his bipartisan infrastructure legislation and Bidenomics. (Drew Angerer/Getty Images)
Bidenomics suggests tax increases on only those making more than $400,000. Spoiler alert middle class: You will still feel it in your wallet.
Surely the fact that 40% of all Americans pay no federal income taxes can’t be fair. But it’s interesting to hear an attack on corporations in America when the president says that corporate tax should go from 21% to 28% (newsflash: a 30% increase) and the minimum corporate tax should increase from 15% to 21% (a 40% increase).
JOE BIDEN, YOU'RE NO HARRY TRUMAN
Doesn’t everyone realize already that corporations have an insatiable appetite for profits, and if you raise corporate taxes by 30% or 40%, it will end in two bad outcomes for the middle class.
One, prices continue to soar against the ever-shrinking wallets of Americans. Two, corporations cut expenses, which means middle-class Americans lose more their jobs and unemployment shoots above 5% or more.
Three, corporations let their publicly traded stocks take a nosedive on Wall Street. Obviously, number three isn’t going to happen and a 21% tax rate is well in line with most industrialized countries around the world.
Bidenomics talks about excellent wage growth, just not after-tax wage growth. That’s the big disconnect across America.
Talk to Americans the next time they check out at Whole Foods or grab a burger at Five Guys. This is the complete disconnect between the way Americans feel right now and the rhetoric that comes out of The White House.
MAJOR CONSERVATIVE GROUP UNVEILS BIDENOMICS.COM TO TARGET PRESIDENT'S ECONOMIC POLICIES
Middle-class Americans just simply can’t keep up with the cost of eating out at fast-food restaurants, casual fare restaurants, or just buying day-to-day groceries. Wages -- real wages -- can’t keep pace with day-to-day inflation no matter what the numbers say, especially after taxes.
In December 2023, wage growth was reported to be up 4.3%. At a 25% federal and state tax income rate as an example, you would keep 75% or "real wages" of 3.22%. At that time, inflation was at 3.4%.
This is why it feels so difficult for so many middle-class American families. After taxes, most folks are simply treading water or going backwards. In this latest jobs report, wage growth was only .1%, which would barely be above 1.0% on an annualized basis.
Bidenomics suggests unemployment is at an all-time low. It’s easy when printing money is at an all-time high. Higher unemployment is coming.
The M1 money supply is a measure of the most liquid assets in the U.S. money supply, including cash, checking accounts, traveler’s checks, etc. In April of 2020, the M1 figure stood at $4.79 trillion and at the end of 2023 the M1 figure stood at slightly over $18 trillion. Why? We printed lots and lots and lots of money.
DESPITE THE SPIN, AMERICANS KNOW THIS TRUTH ABOUT BIDENOMICS
When money is injected into the economy at low cost, businesses can use these dollars to expand and most notably hire more jobs. However, if you look at the recent trends in states like California, where unemployment last month was at 5.1%, and Nevada at 5.3%, the recent jobs report showing unemployment at 3.9% is the beginning of the curve in my view toward a 5% unemployment rate again because you simply can’t keep printing money to make the employment picture look good.
Whose jobs are at the most risk if companies start laying off in masses? You guessed it. The middle class.
Bidenomics warns "pay your fair share." If your taxes don’t go up middle class, your deductions might go down.
Biden put forward a billionaires’ tax that would set a minimum 25% tax for the nation's 1,000 billionaires, generating an estimated $500 billion in revenue over the next 10 years.
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First, it isn’t just on billionaires. It’s on those Americans with a "wealth" of more than $100 million.
Second, the calculations arrived at by including "unrealized gains" in the income calculations of the 400 richest families in the U.S. This means the tax could come on stock, real estate or business ownership before gains are ever realized.
Biden made it sound like the standard rate billionaires pay today is 8.2%. According to IRS data from 2019, the actual average tax rate of the top 1% of taxpayers in America is 25.6%.
Remember this, when the Tax Cuts and Jobs Act put into place in 2017 expires, the standard deduction will go backwards if no new legislation is put into place by the end of 2025. If it does, it will mostly affect the middle class and your taxes will go up.
Just talk to middle-class Americans about rent, food, car maintenance and day care. It’s still shocking that leaders like Treasury Secretary Janet Yellen says Bidenomics is working for the middle class when most Americans say they are falling behind, living paycheck to paycheck, and treading water month to month with their family finances.
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Ted Jenkin is CEO and co-founder of Oxygen Financial and president of Exit Stage Left Advisors.
