Apparently being unaware of simple economics, White House media secretary Jen Psaki said this week that the White House thinks it is “absurd and unfair” if businesses increase prices after the Biden White House increases corporate tax liability.
The Biden administration has been promoting the absurd idea that its $3.5 trillion spending plan really “costs zero dollars.” They say that tax increases will help pay for the spending.
Biden has promised not to increase taxes on Americans earning under $400,000. But as a reporter noted in talking to Psaki during a White House media briefing, analysis from the Joint Committee on Taxation states that the spending bill would lead to tax increases for “over 16% of taxpayers.”
When asked whether Biden would want changes to the spending bill to keep his promise, Psaki said how terrible the White House believes it is for corporations to offset their tax increases by increasing prices to make up the difference.
“The president’s commitment is to not raise taxes for anyone earning under $400,000 per year,” Psaki said.
“There are some — and I’m not certain if this is in the report — who say that, in the past, companies have given these costs on to consumers. I’m not sure if this is the argument being made in the report,” she said. “We feel that is absurd and unfair, and the American people will not stand for that.”
Jen Psaki: It’s “unfair and absurd” that companies would increase costs for consumers in response to us taxing them more. 😳 pic.twitter.com/rHilrYdj4j
— Jason Rantz on KTTH Radio (@jasonrantz) September 28, 2021
What is really going on?
Basic economics means that corporations often do raise their prices to cover higher taxes or more wage increases.
In fact, contrary to Biden’s claims, someone will always be forced to pay for increased corporate taxes. “It is crucial to remember that corporate taxes have to be paid by people. Any corporate tax increase will be paid by shareholders, employees through lower wages, or customers through higher prices,” Forbes said.
This fact aside, the WSJ explained that the $3.5 trillion spending plan does not “costs zero dollars,” nor does it raise enough funds through tax increases to pay for its cost.
And the Committee for a Responsible Federal Budget says that the net cost of Biden’s “Build Back Better” agenda is over $4 trillion over the next decade.
Author: Scott Dowdy