President Joe Biden released his proposed budget for fiscal year 2025 on Monday. There’s something in his budget for everyone—everyone who loves tax hikes, that is.

Biden would raise taxes by $5 trillion over 10 years, and—based on his budget—would allow an additional $2 trillion of middle-class tax cuts to expire after 2025. Between 2023 and 2034, tax receipts would rise by 95%, according to the White House.

Biden would aim most of the new taxes at small and big businesses, entrepreneurs, investors, and job and wealth creators.

Middle-class workers and consumers would be devastated by the economic collateral damage.

The Biden administration acts as if business capital is an endless fountain that will never run dry, no matter how much the government siphons out of it, and as if no matter how severely they’re taxed, investors will invest just as much, and businesses will keep building, hiring, and raising salaries.

Unfortunately for the president, even if people were just as motivated to work and invest when the government reaps the rewards from their efforts, the simple fact of the matter is this: It’s impossible to invest what the government doesn’t allow you to keep, so the fountain eventually runs dry.

Biden’s proposal includes dozens of tax hikes. Here are “just” 10 of the ways Biden’s radical tax hikes would lead to America’s economic downfall.

1. A Tax on Income Before It’s Earned ($503 Billion)

Biden would impose a tax of up to 25% on the unrealized capital gains of wealthy taxpayers. Taxing capital gains before income is ever received would be a fundamental and detrimental redefinition of the income tax.

Take, for example, the founder of a publicly traded company who—for simplicity’s sake—holds all his wealth in his 40% share of the company stock, valued at $200 million. Suppose the stock price of the company doubles relative to the previous year. This individual could face a 25% tax on the $200 million appreciation of his shares in the company, even though he didn’t yet sell his stocks or receive any payment from the company.

To pay the $50 million tax he would owe, the executive would likely have to sell stock. His large stock sale would drag down the price of the company stock, making it more costly for the company to raise additional equity from selling shares.

The timing of the government snatching away the company’s capital is awful—the unrealized capital gains tax would slam companies right after big increases in stock price, a good sign the company was primed for growth.

2. Second-Highest Corporate Tax Rate in Developed World ($1.35 Trillion)

Biden would also increase the federal corporate income-tax rate by one-third from 21% to 28%. The median state currently adds a further 6% corporate income tax. Combined, that means a tax of roughly one-third would apply to company profits before investors could receive their share of the earnings.

The numerous investor-level taxes—described above and below—would apply on what’s left over after the government first grabs its share of corporate profits. This one-two punch would clobber Americans’ retirement accounts.

Under Biden’s budget, the combined U.S. federal and median state corporate tax rate would be the second-highest among the 38 developed countries in the Organization for Economic Cooperation and Development, behind only Colombia. These tax hikes would drive many companies and jobs out of the U.S. and drive many other companies into the ground.

3. Doubling Down (Literally) on Double-Taxed Investment Income ($692 Billion)

Biden’s tax proposal would also nearly double the tax rate on long-term capital gains and dividends. Including the net investment income-tax surtax, the current top rate on this class of income is 23.8%. Biden would raise the top rate to 44.6%. Most states layer on their own capital gains taxes, typically taxing it as ordinary income. California, for example, taxes capital gains as high as 13.3%.

With Biden’s tax increases, the investment situation would be completely untenable. Consider the accumulation of taxes on $100 of gross earnings taxed at the top rate in California. There would be:

  • $8.84 in California corporate income tax.
  • $25.52 in federal corporate income tax.
  • $8.73 in California capital gains tax.
  • $29.27 in federal capital gains tax.

Only $27.63 of the original $100 would trickle down to the investor whose capital was used to produce the profits. Federal and state government would take the rest.

But it gets worse. After factoring in inflation between investment and realization of long-term gains, investors would routinely be left with less than their original investment because capital gains taxes are imposed even on purely inflationary price increases.

Individuals would take all the risk, and the government would take the reward.

Unfortunately, such extreme taxation would disincentivize investment and shrink the economy so much that even the government’s larger share of the economic pie wouldn’t amount to much. Tax revenues would almost certainly fall, because of these policies as investors would move their highly mobile capital to avoid the excessive taxes.

4. Surtax on Small Business Income ($393 Billion)

The net investment income-tax surtax generally applies to passive investment income for those earning above $125,000 to $250,000, depending on filing status. Biden’s proposal would extend the tax to business income earned by those actively running a small business.

Under Biden’s plan, the tax on small-business income would kick in starting between $200,000 and $400,000 of income, depending on filing status.

These thresholds would not be indexed for inflation, so the tax would apply to smaller and smaller businesses over time.

5. A Higher Top Tax Rate and 28% Withholding Tax on Top Earners ($518 Billion)

Biden’s budget would increase the top statutory tax rate on wage income from 37% to 39.6%, a seemingly modest change compared with his other tax hikes.

However, the plan would go much further by prohibiting companies from deducting compensation paid to top earners in the calculation of taxable corporate income. In other words, the 28% federal corporate tax rate would effectively be layered onto individual wage taxes. Like a massive withholding tax, the business would pay an extra 28% tax for the privilege of paying high-income individuals’ wages.

6. Quadrupled Tax on Companies’ Stock Repurchases ($166 Billion)

Biden signed into law a 1% excise tax on “stock buybacks” as part of the 2022 Inflation Reduction Act. It’s now a year-and-a-half later, and he’s ready to quadruple it to 4%. This may sound like a small tax, but as an excise tax, it is applied on the full value of the stock—not just the gain. Indeed, the tax applies to stock buybacks even in the event of a decline in stock value.

Companies that are not in a rapid growth mode may choose to return capital to shareholders either through dividends or stock buybacks.

Companies may prefer to repurchase stock from investors in certain situations. Investors generally expect dividends to be regular payouts. Stock repurchases allow more flexibility for both the company and the investors: Companies can do a one-time stock buyback if they have a surplus of cash in the short term, but expect their long-term growth and investment prospects to improve.

Alternatively, companies sometimes use stock buybacks instead of dividends to signal confidence in the value of the company.

Quadrupling this tax would add to the cost of moving capital from where it has less growth potential to where it has greater growth potential. It would encourage large existing companies to hoard capital, to the detriment of cash-starved startups.

Investors and innovation would suffer, and retirement accounts would take a hit.

7. Vast Boost to IRS Budget ($104 Billion)

Despite all the new taxes on capital and job creators, there is at least one employer that would be hiring if Biden’s budget were enacted: the IRS.

As recently as 2021, the IRS’ annual budget was $11.9 billion. Then, less than two years ago, Biden signed into law a massive $80 billion supplemental appropriation for the IRS to be spent over 10 years. Former IRS Commissioner John Koskinen, an appointee of then-President Barack Obama, said of the funding surge: “I’m not sure you’d be able to efficiently use that much money. That’s a lot of money.”

Yet, with Biden’s latest budget, he’s back for more, requesting an additional $104 billion boost in the agency’s funding over 10 years, enough to enable the IRS to hire enough additional auditors and other staff to fill an NFL stadium.

To give a sense of how large the IRS would grow: Only six Western Hemisphere countries would have more active-duty personnel serving in their militaries.

If Biden’s proposed taxes aren’t enough to stifle the American economy, unleashing so many additional auditors to scrutinize businesses and entrepreneurs trying to comply with the litany of tax increases should finish the job.

8. Capitulation to OECD Global Tax Regime ($514 Billion)

Biden’s budget would adopt the “undertaxed profits” rule and other changes to the U.S.’ international tax law to align with the global tax system devised by international bureaucrats at the Organization for Economic Cooperation and Development.

The OECD global minimum tax system allows high-tax countries to tax companies for their activities in low-tax countries.

There are two fatal flaws to the OECD’s global minimum tax design. First, it not only allows, but encourages, countries to implement subsidies for favored industries to get around the undertaxed-profits rule. That encourages bad policies, such as the Biden administration’s huge subsidies for electric vehicles and green energy producers.

The second and more fundamental problem is that the OECD’s schemes negate national sovereignty by taking tax policy out of the hands of elected representatives of the people and cudgeling them into conforming with the diktats of an unelected body of international technocrats in Paris.

9. End to Trump’s Middle-Class Tax Cuts? ($2+ Trillion)

Biden’s budget does not include an extension of the 2017 income tax cuts for individuals, which are set to expire after next year. Biden has hinted at wanting to extend the large middle-class tax cuts for individuals earning less than $400,000—estimated to be worth about $2 trillion over 10 years—but he failed to find room for the extension of the tax cuts in his 10-year, $86.6 trillion budget.

The administration wants to claim $2 trillion less in added deficits from allowing the middle-class tax cuts to expire, but it also wants to continue to claim it’s not directly raising taxes on everyday Americans.

It can’t have it both ways. Regardless of what it chooses, though, working Americans would ultimately pay a heavy price for the massive tax and spending spree in Biden’s budget.

10. Double Tax on Death ($84 Billion)

Death would offer no reprieve from Biden’s taxes. In fact, dying would now trigger both the already existing 40% death tax on estates larger than about $7 million (as of 2026) and a capital-gains tax on unrealized gains before an estate may be transferred. As noted above, the capital gains taxes would be extreme.


Biden’s message to entrepreneurs and wealth creators is clear. If—despite all the taxes and regulations placed in your way—you successfully manage during your lifetime to build a business or create wealth through your ideas and hard work, the government can take away that legacy in a heartbeat.

The obvious consequence of the government’s seizing people’s property at every turn to redistribute it and to fund government bureaucracy is that people would create less, work less, and innovate less.

In short, Biden’s tax-and-spend agenda is a recipe for America’s decline.

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