EXCLUSIVE: The chairman of the House Ways and Means Committee warns that the tax increases in President Biden’s proposed budget would have a “devastating” effect on Americans across the country.
“It means that a working class (American) will have to pay more to put food on the table, clothes on their backs, and gas in their cars, because these incredible expenses only fuel inflation. These Biden taxes will bring home the paycheck for all Americans,” Rep. Jason Smith, R-Mo., told Fox News Digital in an interview Friday.
“Whether you make less than $400,000 a year or more than $400,000 a year, the policies in this proposal will be devastating.”
Smith was referring to one of the main points of Biden’s 2024 progressive fiscal agenda: an income tax increase from 37% to 39.6% for Americans whose income falls in the top tax bracket. In all, the plan calls for more than $2 trillion in tax increases for the wealthy that the White House claims will offset federal deficits by the same amount over 10 years.
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Committee Chair Jason Smith, R-Mo., questions U.S. Treasury Secretary Janet Yellen at a House Ways and Means Committee hearing on Capitol Hill on March 10, 2023 in Washington. (Drew Angerer/Getty Images)
Biden is also proposing to raise the corporate tax rate from 21%, which it was rolled back to during the Trump administration, to 28%.
Smith also pointed out the proposal from the president to roll back fossil fuel subsidies and other measures that House Republicans say would result in a $37 billion tax increase for the U.S. energy industry. Taken together, these changes would trickle down to consumers, driving up prices across the board.
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“That will affect every American,” the chairman said, adding that Biden’s call to increase IRS funding by 15% after $80 billion was already allocated last year under Biden’s Inflation Reduction Act would also make economic conditions more difficult for Americans. to make.
“And what’s that for? Enforcement. Just to check the bank accounts of working class Americans,” Smith said.
He argued that “everything in this budget hurts middle-class Americans,” citing calculations predicting a $4.7 billion tax increase if Biden’s plan were passed.
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The hearing focused on President Biden’s proposed budget for fiscal year 2024 (Anna Geldmaker)
Smith also cited House GOP calculations showing Main Street businesses would pay $1.8 trillion more under Biden’s plan through an expansion of the small business allowance and other resources.
“The last thing this economy needs for working-class families right now is more spending and more tax increases. Right now for the past two years they have lost … months of their paychecks just because of the cost of inflation. … That happened because of reckless government spending,” Smith said.
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Treasury Secretary Janet Yellen was on Capitol Hill earlier Friday for a hearing to defend Biden’s budget before Smith’s Ways and Means Committee.
Republicans have been calling on Biden to release his budget proposal since he missed the formal deadline for it last month, urging him to consider spending cuts before agreeing to raise the $31.4 trillion debt ceiling.
But the GOP has ruled out supporting tax increases as a way to help reduce the deficit. And Smith said Friday that Yellen’s testimony and Biden’s plan show that the administration is “clearly not” serious about getting government waste under control.
Janet Yellen, U.S. Treasury Secretary, center, departs after a House Ways and Means Committee hearing in Washington, DC, Friday, March 10, 2023. (Al Drago/Bloomberg via Getty Images)
“This is the largest tax increase Biden has ever presented, and it is the largest expenditure he has ever contemplated. So if he really wanted to cut spending and get the fiscal crisis we’re in under control, he would have presented a budget that would balance out at some point. This budget will never balance,” Smith said.
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The congressman was referring to the House Budget Committee leaders when asked if the Republicans own tax blueprint was in the works, but said talks were underway on how to move forward with the debt limit.
“There are a lot of conversations going on right now between members of the Ways and Means committee, between all members of Congress, including with senators. And there are multiple options for raising the debt limit,” Smith said.
He declined to go into details, explaining that Republicans “don’t pigeonhole themselves.”
“They just know we have a tough job ahead of us, and that is we have to deal with the fiscal madness that is going on,” Smith said.
Elizabeth Elkind is a political reporter for Fox News Digital.