President Biden is expected soon to announce a budget proposal totaling $6 trillion, sparking a resurgence of concerns about the “hidden tax,” which is inflation.
The New York Times explained the spending level would be a third higher than spending just before the China-originated COVID-19 pandemic hit.
The report said the $6 trillion spending in 2022 would surge to $8.2 trillion by the year 2031.
According to The Hill, “Rather than find a path to a sustainable debt, the plan would increase the country’s debt burden to 117 percent of gross domestic product by the end of the decade, exceeding its World War II record in 2024.”
The report called the agenda “an unabashed call for a bigger role for government in the U.S. economy.”
It necessarily will include a lot more taxes, including the “hidden tax,” inflation, which hits hard at the lower and middle income households.
A commentary at the Rocky Mount Telegram explained:
“Inflation is a hidden tax that everyone pays when they purchase something.”
It continued, “The Federal Reserve is not helping the little guy by printing money that is worth nothing and dumping it in the marketplace. Every dollar that is printed with nothing to back it up devalues the dollar in your pocket or bank account.”
Yahoo Finance columnist Rick Newman noted it’s already started.
“Year-over-year inflation was 4.2% in April and economists think it could go higher. San Francisco Federal Reserve President Mary Daly recently predicted this bout of inflation would persist into 2022,” he wrote, “Price hikes are hitting certain types of products suffering supply disruptions as the economy rebounds from the coronavirus pandemic much faster than many expected. A shortage of microchips has cut into new-car production, so buyers are snapping up used cars, pushing prices up 21% during the last year. Rental-car agencies slashed inventories last year, and with travel recovering, rental rates are up 82%. Lumber prices are four times higher than they were a year ago, pushing up construction costs. Home values have risen by record levels, exasperating buyers. Gasoline is up, too.”
The Hill said Biden’s plan, “demonstrates that Biden shows little interest in taming the deficit, which would remain above $1 trillion through the next decade despite an expected economic recovery. The deficit only exceeded that level in the four-year period following the Great Recession and again after the COVID-19 pandemic slammed the economy.”
The Daily Mail bluntly warned, “Major inflation fears as Biden prepares to announce a $6 TRILLION budget…”
“Taxes are also set to increase by $3 trillion over the next decade in line with Biden’s proposed hikes in corporate rates and plans targeting Americans making more than $400,000-a-year,” the report said.
The Daily Mail noted the plans are for capital gains taxes to surge from 20% to nearly 40%, and total taxes for some residents in New York and California could be well above 50%.
Corporate taxes also are planned to surge by one-third, up from 21% to 28%.
But it’s inflation that would hit everyone across the country, no matter their income, violating Biden’s claim he that no one with income below $400,000 will pay any more in taxes.
Larry Summers, the former director of the National Economic Council for Barack Obama, said, “We’re taking very substantial risks on the inflation side.”
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