A new study from Stanford University’s Hoover Institution reveals that Democratic presidential nominee Joe Biden’s economic plan would have a damaging impact on household income and job growth.
“We estimate that the full Biden agenda will reduce long-run real GDP per capita by more than 8 percent as a result of reducing full-time equivalent employment (FTEs) per person by 3 percent, the capital stock per person by 15 percent and total factor productivity by 2 percent,” read the study, published Sunday.
A decade from now, median household income could very well decrease by $6,500.
“Relative to the [Congressional Budget Office’s] 2030 projections for these variables,” the study explained, “this suggests there will be 4.9 million fewer employed individuals, $2.6 trillion less GDP, and $1.5 trillion less consumption in that year alone.
A major reason why Biden’s agenda would be detrimental has to do with his proposal to increase the corporate tax rate to 28 percent.
Corporate tax hikes usually result in higher prices for consumers, lower wages and layoffs.
“The problem is that they will have a long-term corrosive impact by raising the cost of capital, reducing the incentive to work and invest, and reducing productivity across the economy.
“Americans will pay the price in a lower standard of living than they otherwise would — and that they deserve.”
While some no doubt wonder why we should care about tax hikes on the rich, they may forget that the wealthy tend to be the largest job providers and pay the most income taxes already.
As David Wessel of the Brookings Institution wrote in October 2019, “The rich generally pay more of their incomes in taxes than the rest of us. The top fifth of households got 54% of all income and paid 69% of federal taxes; the top 1% got 16% of the income and paid 25% of all federal taxes.”