The United States under President Joe Biden is finally about to lead the world in a major category.
But it’s not one you’ll see in many Democratic campaign ads during next year’s midterm elections, because this isn’t exactly a point of pride.
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Once the reconciliation bill is passed and Biden’s “Build Back Better” plan is enacted, the total federal-state tax burden will eventually jump to a top rate of 57.4 percent, according to a Tax Foundation analysis.
That would be the highest top rate in the developed world, and well above the average of 42.6 percent in the 38 nations that make up the Organisation for Economic Co-operation and Development (OECD).
And that, experts warn, could have a chilling effect on an already-sputtering economy reeling from the one-two punch of the supply-chain crisis and surging inflation.
“We realize it’s impolite to mention this tax history these days since we live in an era when the wealthy are supposed to be punished for their own sake,” the Wall Street Journal wrote in an editorial. “Which means we may have to learn these lessons in economic reality again the hard way—from painful experience.”
And while that 57.4 percent rate alone could have a crippling effect on the economy, millions of American could pay more.
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In some cases, a lot more.
Some states have no income tax, while others – especially Democratic-led “blue” states” – tax their residents through the teeth.
As a result, the highest earners in New York will pay 66.2 percent in combined state and federal taxes. In a sense, those New Yorkers will work the first eight months of the year just to pay their taxes.
California was right behind, where the highest earners will shell out 64.7 percent once the Democratic plan is enacted.
New Jersey, Hawaii, Washington, DC, Oregon, Minnesota, Maryland and Vermont will all have rates above 60 percent.
All 50 states would be above 50 percent in combined federal-state taxes for the highest earners.
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Eight states are tied for the lowest rate of 51.4 percent, and they’re the ones with no personal income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.
Except for reliably blue Washington and the swing state of Nevada, the rest are “red” states that tend to vote Republican. And four of those low-tax states – Florida, Nevada, Texas and Washington – are among the fastest-growing in the nation, based on the latest census.
Population growth has been so sluggish in the top two most heavily taxed states that each lost a seat in the House of Representatives as a result of the latest census – a sign that residents sick of high taxes are voting with their feet and leaving.
And that’s not the only way the Democrats plan to increase revenue.
The Tax Foundation said the IRS budget for audits will jump by 23 times, leading to 1.2 million more annual audits.
The Washington Post said the goal is to bring in between $400 billion and $1 trillion – and while Democrats claim the target is millionaires and corporate cheats, the Tax Foundation said half of those new audits will be on taxpayers who earn less than $75,000 a year.
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“Clearly, the goal of this funding is to empower the IRS to audit and harass millions of American families, self-employed people, and small businesses including cash heavy businesses like nail-salons, barbershops, and food trucks,” the organization said. “It would add a whopping 87,000 new IRS agents – enough to fill Nationals Park twice. That is a greater quantity of agents than all the personnel on all 11 U.S. aircraft carriers.”
In many ways, it’s a small army – but one that targets American workers instead of an overseas threat.