A new analysis done by Senate Republicans shows President Biden's tax plan would bring the "largest single year tax hike" since 1966.
Senate Republicans estimated that Biden's tax plan would bring "the highest peacetime tax increase" as a percent of GDP, and "the single largest in over 50 years."
Republicans said they took data from the University of Pennsylvania's Wharton School Budget Model.
Republicans said that with a Q2 GDP of 22.731 trillion the lowest revenue fiscal year(FY22 - $148.6B,) would be .65% GDP, the 10-year average ($239.2B) would be 1.05% GDP, and the highest revenue effect fiscal year (FY31 – $275.4B) would be 1.21% GDP. With that math, Republicans say all "would be higher than the .60% GDP Vietnam War financing - Tax Adjustment Act of 1966."
Republicans said that would be a larger tax hike by percentage than any that occurred since, except the 1968 tax hike which was during the Vietnam War.
"With our math, this would still be the highest peacetime tax increase (as a percent of GDP) on record," the Senate Republican said.
"If enacted, this tax hike would be the largest peacetime tax hike and the single largest tax hike in 50 years," Senate Republicans found.
"President Biden's reckless tax and spending spree would crush the still recovering economy with the largest single tax hike in 50 years," a senior Senate GOP aide told Fox News. "Americans cannot afford President Biden's socialist agenda."
As part of his administration's sweeping "Build Back Better" agenda, the president called for a slew of new taxes on corporations and the top sliver of U.S. households, including raising the corporate tax to 28%, nearly doubling the capital gains tax rate to 39.6% from 21%, restoring the top individual income tax rate to 39.6% from 37% and taxing capital gains at death.
Earlier this month, House Democrats watered down some of the most ambitious elements of Biden's original tax plan – reducing the corporate tax rate to 26.5%, and only applying to businesses earning more than $5 million in taxable income. The tax rate, under the House plan, would actually decline to 18% for small businesses earning less than $400,000; all other businesses would continue to pay the current rate of 21%.
House Democrats also weakened Biden's push to tax long-term capital gains as ordinary income for individuals earning more than $1 million. Instead of raising the top rate on capital gains to 39.6%, Democrats pushed it incrementally to 25%.
Taxes on long-term capital gains – generally classified as an asset that's held for more than one year – currently range from 0% to 20%, depending on a person's income. Wealthier investors are also subject to an additional 3.8% tax on long- and short-term capital gains that's used to fund ObamaCare. Short-term capital gains on assets sold within a year are typically taxed as ordinary income.
Congress estimates that stepping up the basis of inherited assets costs the government about $43 billion a year. Eliminating the practice – coupled with raising the top statutory rate on capital gains from 20% to 39.6% – would generate an estimated $113 billion in new revenue over the next decade, according to recent findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School.
By scaling back the size of the tax hikes, Democrats are left with less money to use toward funding a massive expansion of the social safety net, including establishing universal pre-kindergarten, free community college, paid family leave and tax credits for low- and middle-income households.
Meanwhile, Senate Republicans also cited an analysis from the Joint Committee on Taxation, which they say shows taxpayers making as little as $10,000 will see a tax hike under the Democrats' taxing package.
"In 2023, the following Americans will pay more in taxes under Biden's plan," Republicans said, listing 5% of Americans who make between less than $10,000 and $40,000l; 5% of Americans who make between $40,000 and $50,000; 9% of Americans who make between $50,000 and $75,000; 18% of Americans who make between $75,000 and $100,000; 35% of Americans who make between $100,000 and $200,000; and 59% of Americans who make between $200,000 and $500,000."
The initial headline for this story contained the wrong year of the largest tax hike.