President Biden and congressional Democrats have imposed a long list of tax increases as part of their “Cutting Inflation Act” passed in 2022.
On Jan. 1, 2023, the following Democratic tax increases will take effect:
A $6.5 billion tax on natural gas that will increase household energy bills
Think your home energy bills are high now? Just wait for the three major energy taxes in the Cut Inflation Act to hit your wallet. The first is a regressive tax on US oil and gas development. The tax will drive up the cost of household energy bills. The Congressional Budget Office estimates the natural gas tax will increase taxes by $6.5 billion.
Tax hike violates the president Biden’s tax pledge to any American earning less than $400,000 a year. Biden administration officials have repeatedly admitted Taxes that raise consumer energy prices are in violation of President Biden’s $400,000 tax pledge.
A letter at the American Gas Association Congress warned that the methane tax would represent a 17% increase in the natural gas bill of an average family. Democrats included a tax in the bill despite retail energy prices topping multi-year highs in the United States.
$12 billion crude oil tax What will increase household spending?
Democrats impose a 16.4 cents a barrel tax on imported crude oil and petroleum products that will be passed on to consumers in the form of higher gasoline prices.
Tax hike violates the president Biden’s tax pledge to any American earning less than $400,000 a year.
As noted above, Biden administration officials have repeatedly admitted Taxes that raise consumer energy prices are in violation of President Biden’s $400,000 tax pledge.
As if that weren’t enough, the Democrats have indexed their oil tax increase to inflation. As inflation rises, the level of taxation also rises.
The non-partisan Joint Committee on Taxation (JCT) estimates the provision will increase $12 billion in taxes.
A $1.2 billion coal tax that will increase household energy bills
The tax hike more than doubles the current excise taxes on coal production. Under the Democratic proposal, the tax rate on coal from underground mining would increase from $0.50 per ton to $1.10 per ton while the tax rate on coal from mining surface mining would drop from $0.25 per tonne to $0.55 per tonne.
JCT estimates that will increase $1.2 billion in taxes that will be passed on to consumers in the form of higher electricity bills.
$74 billion Stock tax that will hit your nest egg – 401(k)s, IRAs and retirement plans
When Americans choose to resell stock to a company, Democrats will impose a new federal excise tax that will reduce the value of household nest eggs. Rising taxes and restricting stock buybacks hurt the retirement savings of anyone with a 401(k), IRA, or retirement plan.
Union pension plans will also be affected.
The tax will put U.S. employers at a competitive disadvantage compared to China, which does not have such a tax.
Share buybacks help grow retirement accounts. Raising taxes and limiting buy-backs would hurt the 58 percent Americans who own stocks and more 60 million workers invested in a 401(k). An additional amount of 14.83 million Americans are invested in 529 college savings accounts.
According to Tax foundation.
In 2017, corporate-sponsored funds were worth $4.45 trillion in market value; union-sponsored funds accounted for $409 billion; and public funds, which benefit teachers and police, totaled $4.25 trillion.
When companies buy back shares, it is these investors who benefit. A tax on redemptions could deter companies from taking this action and negatively impact retirement savings.
American companies will face significant compliance costs – a boon for expensive law firms – the burden of which will be passed on to working households.
$225 billion Increase in corporate tax which will be passed on to households
Democrats have imposed an alternative minimum tax of 15% on income from financial statements of U.S. companies reporting $1 billion in profits over the past three years. These American companies employ millions of Americans.
The cost of this tax increase will be borne by working families in the form of higher prices, fewer jobs and lower wages.
A Tax Foundation Report Since last December, a 15% tax on books would reduce GDP by 0.1% and kill 27,000 jobs.
Congressional Budget Office Preliminary Cost Estimates found the provision would raise taxes by more than $225 billion.
According to JCT’s analysis, 49.7% of the tax would be borne by the manufacturing industry at a time when manufacturers are already grappling with supply chain disruptions.
Tax foundation also warned that current supply chain problems could be compounded by the disproportionate burden of the book tax on key industries. The report concluded that “the coal industry faces the heaviest burden of the minimum tax on the books, facing a 7.2% net tax increase in its pre-tax book income, followed by manufacturing of automobiles and trucks, which faces a 5.1% tax hike.
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