On Wednesday, May 5, President Joe Biden proclaimed he will stand by his proposal to finance the $2 trillion infrastructure and jobs plan with tax increases on corporations and the wealthy. America’s Voice Live (AVL) recently turned to Terry Sawchuk, founder and chairman of Sawchuk Wealth, for insight on the potential implications of these plans.
“This is just an attack on the wealthy,” Sawchuk tells AVL’s Steve Gruber and Tudor Dixon. “If you go back to the corporate tax rates they were talking about, the economy was way better under Trump before COVID and the reason why we had all of these jobs before COVID is because they lowered the corporate tax rate and they brought a bunch of these companies back to the U.S. to manufacture things. So, I find it sort of ironic that they want to reverse all that and go back to where it was before.”
In fact, Sawchuk believes these corporate tax increases will ultimately not achieve its goal of more jobs for Americans but rather lead the country on a path that can be very damaging to consumers.
“The Fed balance sheet has doubled. It has gone from $4 trillion to almost $8 trillion in the past year,” says Sawchuk. “They are going to pass these increases back to the consumer. It’s going to cost more to buy a hamburger. It’s going to cost more to go have a glass of beer… All this inflation is going to get passed down to the end consumer.”
The Biden administration is also hoping to place taxes on unrealized capital gains profits and raise the capital gains tax to almost 40%. However, Sawchuk thinks this will not come to fruition since the wealthy are smart enough to work around the rules.
“An example will be, they just aren’t going to sell their assets,” he explains “What they are going to do is use them as collateral and borrow against them. You don’t pay taxes on loans and they have created the perfect environment to borrow with almost permanently low interest rates.”