Calls from the Biden administration and from Democrats to raise taxes do not come from a plan to generate money for more government spending, but for redistributing wealth, Rep. James Comer said Tuesday.
“You used to hear liberals say we want to raise taxes to be able to have more money to spend on more government programs,” the Kentucky Republican, who appeared on MSNBC’s “Squawk Box” along with Rep. Ro Khanna, D-Calif, to discuss President Joe Biden’s call to hike taxes commented. “Now we have seen in Washington, for the past few years, you can spend and you don’t even have to come close to balancing the budget.”
Biden is planning the first major tax hike in the United States since 1993, with increases in the corporate tax rate and in the individual tax rate for people earning more than $400,000 per year. The changes are expected to include a repeal of some of former President Donald Trump’s 2017 tax cut legislation. It is expected to include an increase in the corporate tax rate from 21% to 28%, expanding the estate tax, and raising the capital gains tax for people who earn more than $1 million a year.
Comer commented that the plans are “bad policy.”
“The Democrats in Washington have just really drifted so far to the left that they’re not even recognizable,” he said.
Democrats are also calling for repealing the cap on federal tax deductions for state and local taxes, SALT, which went into effect under Trump’s tax law, and Comer said that is a bad idea.
“A lot of the people in the Biden administration forget about property taxes and the people that live in the high property tax states,” said Comer. “They were the losers in the Trump tax cuts. I think this is something they need to think long and hard about. We’re just now getting the economy back on stable footing and a big tax increase is not the way to go.”
Khanna said the move to repeal the cap has “huge support” among Democrats, and while he has no issue with wealth generation, he does believe that for people who have done well, “let’s all invest so everyone has a decent shot at the American dream.”
He also said that he doesn’t understand the reluctance to invest so the nation can grow.
“We have to be more creative with the private sector and show success,” said Khanna. “I don’t understand why we can’t invest and make sure battery factories are in America, not China, that critical technologies are in America, not China … I think Americans should decide, not just the people in Silicon Valley who made the wealth,” he said. “A lot of their philanthropy is outside of the United States.”
Comer, meanwhile, said he does agree with Heather Boushey, a member of the White House Council of Economic Advisers, who said on MSNBC Monday that what the Biden administration knows is that the nation needs a tax system “that values work over wealth, that makes sure everybody pays their fair share and where we’re incentivizing things are going to be good for the economy in the short, medium and long-term.”
“I think the government should look at the tax credits and make sure that people are paying what they are supposed to pay before we tinker with the tax rates again,” said Comer. “With respect to the Biden plan, just increasing tax rates with no clear economic plan or vision, I think is more just to please the liberal base.”
He added that if he were a Democrat wanting to make sure the wealthy pay more taxes, he would focus on the IRS and its auditing, and look more at depreciation.
“I will tell you, the guys in real estate take advantage of the depreciation, and a lot of people that make a lot of money own a lot of real estate,” he said. “Real estate appreciates in value (and) they take the depreciation and don’t pay taxes. Those are the areas the Biden administration should examine and not just increase the tax rates significantly.”
Source: Newmax
