What will change for Americans with Biden’s tax plan
Good luck to the Republicans if Biden's plan for families becomes law, writes The New York Times
Conservatives beware: if the main elements of Joe Biden's American Family Plan become law, it will be very difficult to repeal them. Why? Because they will offer millions of people huge, truly revolutionary benefits – writes Paul Krugman in the NYT.
I mean, imagine trying to take away affordable childcare, universal pre-K, and paid leave for new parents once they become part of the fabric of our society. You would face a far worse backlash than what followed Republican attempts to drop protection for coverage of pre-existing health conditions in 2017. And that backlash quickly gave Democrats control of the House and set the stage for their current control of the state. Senate and also the White House.
So what's the republican counter-argument? Well, much of the party seems uninterested in discussing politics, preferring to lash out at imaginary plans to ban red meat or give immigrants Kamala Harris' children's book .
The official GOP response to Biden's Wednesday speech by Senator Tim Scott seemed lackluster; Scott is still complaining about the "government" and suing Biden for spending money on things other than roads and bridges. The closest thing to a real argument was the claim that Biden is proposing "the biggest job-killing tax hikes in a generation" – presumably a reference to Bill Clinton's tax hike in 1993.
Indeed, Biden intends to pay his proposals with higher taxes on corporations and high-income individuals, including a nefarious plan to give the Internal Revenue Service enough resources to crack down on the tax cheating of the rich.
It is important, therefore, to realize that the family plan, if implemented, would be a great job creator. That is, it would increase the number of Americans – women in particular – in paid work substantially, probably by several million.
To understand why, the first thing you need to know is that while Republicans always argue that raising taxes on the rich will destroy jobs, they were never right. Scott's rejoinder to Biden seemed to suggest that the 1993 Clinton tax hike killed jobs; in fact, the United States added 23 million jobs under Clinton's eyes. People also seem to forget that Barack Obama presided over a significant high-end tax hike early in his second term; the economy continued to add jobs rapidly, at a rate of around 2.5 million per year.
Oh, and the California occupation exploded after Jerry Brown raised taxes on the rich in 2012, challenging conservative claims that the state was committing economic suicide.
It is also instructive to compare the United States with other advanced countries, almost all of which have higher taxes and more generous social benefits than we do. Do they pay a price for these policies in the form of job cuts?
Many Americans, I suspect, would be surprised to learn that the truth is that many high-tax, high-profit countries are quite successful in creating jobs. Take the case of France: Adults between 25 and 54, the best years to work, are more likely to be employed in France than in America, especially since French women have a higher paid work rate than their American counterparts. . The Nordic countries have an even greater employment advantage among women.
How can employment be so high in countries with a lot of job-killing taxes? The answer is that taxes don't visibly kill jobs – but a lack of childcare does. Parents in many rich countries are able to take paid work because they have access to safe and affordable childcare; in the United States, such assistance is prohibitively expensive for many if they can get it at all. And the reason is that our government spends next to nothing on childcare and kindergartens; our spending as a percentage of GDP puts us a little below Cyprus and Romania.
The American Family Plan would completely change this picture, providing free preschool for all 3- and 4-year-olds and limiting the cost of childcare to no more than 7% of income for low- and middle-income parents. If this increased the employment of early American women to French levels, it would add about 1.8 million jobs; if we went to Danish levels, we would add three million jobs.
Just to be clear, making it possible for more women to get paid work is not the main point of this plan – and there is nothing wrong with parents choosing to stay at home and take care of their children. Instead, it's primarily about improving the environment in which children grow up, partly as a matter of social justice, partly so that they eventually become healthier and more productive adults.
But more employment – jobs generally expand to satisfy the available workforce – would be a significant and more immediate side benefit. And it would also offer partial tax compensation at the direct cost of childcare, both because new working Americans would pay taxes, and because they would be less likely to need the support of security programs like meal stamps. No, Biden's spending plans won't pay for themselves. But they will cost taxpayers less than the headline numbers might suggest.
And if these plans improve the lives of millions of Americans, will anyone other than professional ideologues care if they are "a big government"?
Article taken from the foreign press review of Eprcomunicazione
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/che-cosa-cambiera-per-gli-americani-con-il-piano-fiscale-di-biden/ on Sun, 02 May 2021 05:56:14 +0000.