Willie R. Tubbs, FISM News
An independent, though right-leaning, organization that advocates for “tax policies that lead to greater economic growth and opportunity” said President Joe Biden’s “Build Back Better” plan will carry with it a burden unmatched in the developed world.
The Tax Foundation, founded in 1937 and comprised of economic and tax experts, said in a press release that Democrats’ social spending bill will lead to all 50 states and the District of Columbia having a top tax rate of more than 50% by 2026.
The average top tax rate is a calculation of the percentage the wealthiest members of an area are expected to pay and combines the tax burdens levied by local, state, and federal entities. This number does not factor in or predict what lower-earning people would face.
According to the Tax Foundation, “Build Back Better” would result in a nationwide average top tax rate of 57.4%, which would rank as the highest among the 38 nations that make up the Organisation for Economic Co-operation and Development.
The OECD was founded in the late 1940s and is comprised of North American and Europe nations, as well as Japan, Australia, South Korea, Israel, Colombia, and Chile.
The Tax Foundation calculates the nation’s current average top tax rate at 42.9%, which ranks in the bottom half of the OECD.
“As policymakers explore options to raise revenue, they should keep in mind how the U.S. compares to other countries and what the economic effects might be,” the release reads. “Raising the top marginal tax rate on ordinary income to the highest in the OECD will damage U.S. competitiveness. It will also reduce incentives to work, save, invest, and innovate, with broad implications for the U.S. economy.”
The top tax rate percentage varies from state to state in the U.S., and the Tax Foundation predicted that the states facing the steepest top tax rates under “Build Back Better” would be New York (66.2%), California (64.7%), New Jersey (63.2%), Hawaii (62.4%), and Oregon (62%). Washington, D.C., was predicted to have a top tax rate of 62.2%.
According to the Tax Foundation, the states in which the top tax rate would be lowest would be a collection of eight states – Alaska, Texas, Tennessee, Florida, Washington, Nevada, Wyoming, and South Dakota – all of whom were predicted to face a 51.4% top tax burden.