The progressive hits keep coming back from the Biden Administration, and the latest one is the $ 1.8 trillion American Families Plan that rolled out on Wednesday. It is more accurate to call this the scheme to make the middle class dependent on the government from cradle to grave. The government will tell you some time later after you are connected with the state how they are going to force you to pay for it.
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We’d call the price tag staggering, but what’s now $ 2 trillion? Add about $ 2 trillion each to the bills for Covid and green energy (“Infrastructure”), and that’s $ 6 trillion in new expenses in 100 days. That doesn’t include the regular federal budget of more than $ 4 trillion a year. Don’t worry, buddy, the Federal Reserve will monetize the debt.
But the costs fluctuate, but not the only or even the biggest problem. The destructive part is the way the plan tries to incorporate government money and the rules that come with it into all major family life decisions. The aim is to expand the entitlement state so that Americans can rely on the government and political class for anything they don’t yet offer.
The White House talking points underscore this in the suffocating love of the welfare state: “making care affordable”; free medical and family vacation; “free education”; two years of “universal pre-school”; “Invest in the nurses.” Subsidies and millions of new caregivers, all licensed and unionized, will help you meet the challenge of making a living and raising a family.
One question is: haven’t we tried this yet? What is a head start if not state pre-school education and childcare? Weren’t school lunches and the program for women, infants and children intended to prevent child hunger? Grocery stamps, social checks, childcare allowances and an income supplement and social housing. Shouldn’t all of these programs and more from previous decades end poverty?
Why did the trillion dollars spent on these programs fail? And if they didn’t work, why do we need more?
For the straight answer, listen to Rahm Emanuel, the Chicago Democrat, who explained the political calculation to the Washington Post this week: “Once everyone is there, all parents want in. Then it is not a program for poor people or a poverty program. It’s an educational program. . . . This is important to me. It changes focus once it’s there for everyone. “
So much for the “safety net” for fighting poverty. The point here is to improve the benefits for middle class families so that they become dependent on the government – and on the Democratic Party, which has become the government’s sponsor.
Democrats love this principle of “universality” because it has helped maintain the popularity of Social Security and Medicare despite their failed finances. However, these programs promise benefits in return for lifelong work. The Biden New Deal is not a deal at all. Most of its programs are free handouts modeled on the Great Society of the 1960s.
The new preschool entitlement applies to all families, as does the free community college. The expansion of the tax credit to $ 3,600 per child in the Covid bill, which Mr Biden wants to make permanent, comes on top of the other social assistance subsidies. The Biden plan also provides for a permanent expansion of ObamaCare subsidies for wealthier adults, removing the 400% subsidy ceiling for poverty. A new right to paid family leave is an incentive for companies to remove vacation benefits that already cover most workers.
All of this results in a healthy guaranteed annual income that is largely independent of the social contract that requires work. This is the real path to independence and self-respect.
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The White House is also less than honest about how it’s going to pay for all of this. The short answer is that more taxes on the rich and more IRS audits will do. But that doesn’t come close.
According to our friends at Cornerstone Macro, permanently increasing the child tax credit over 10 years would cost $ 1.6 trillion. The White House says it will only cost $ 420 billion, but that’s because it only spans four years to 2025. New entitlements are slowly rising but exploding in the later years, while tax increases are immediate and do not increase expected revenues.
This is especially true for the increase in the top tax rate on capital gains to 43.4%, which, according to all historical experience, would lose money. The White House is trying to get around this by eliminating the top-up base for paying capital gains on death, which means that an heir would pay the tax based on accrued value over a lifetime. This is a back door addition to the current 40% death tax rate.
The White House also predicts the release of thousands of new IRS agents will create $ 700 billion in unpaid tax bills. However, this forecast is based in part on old IRS data prior to the 2017 tax reform, which removed many tax loopholes, particularly in corporate tax legislation. The only benefit to the IRS auditing army is that their $ 700 billion bogey replaces another tax hike.
The new taxes are destructive, but it will take time for their effects to be felt as the post-pandemic economy picks up. The GOP shouldn’t ignore taxes and expenses. A stronger political goal, however, could be for the bill to triple a welfare state that despises the dignity of work and seeks to turn Americans into government districts.
Wunderland: Negotiations with the opposition, the left concluded, only hinder the achievement of their political goals. Images: AP / Bloomberg News / Getty Images Composite: Mark Kelly
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