2020 US Elections: The Tax Foundation Warns That Joe Biden's Economic Plan "Would Truncate US Recovery"

The economic plan that Democratic Party candidate Joe Biden wants to carry out if he wins the presidential elections would truncate the US recovery, according to the Tax Foundation’s 2020 Fiscal Competitiveness Index. The report, which assesses the design of tax regulations in the different OECD countries, argues that the tax burden designed by Biden would sink its tax competitiveness below that of Spain. “The ‘Biden plan’ would lead us back to the position 30 of the OECD countries behind Spain, Greece and the least competitive countries in Europe, “says Scott A. Hodge, president of the Tax Foundation. QUESTION: One of the points that most concerns both businessmen and US citizens are the tax burdens that Joe Biden carries on his electoral program. In your opinion, what is the most damaging part of Joe Biden’s economic plan? ANSWER: The ‘Biden plan’ is heading the US fiscal policy in the wrong direction. Mr. Biden would increase the tax rate on income, large companies and on investments and savings. All this, when we add it to our fiscal model, we see that it would damage long-term growth in the United States, reduce the size of our economy by around 1.5%, destroy 1.2 million jobs, in addition to reducing the workers salary. Ultimately, the standard of living of Americans would plummet as a result of Biden’s tax plan. Q .: If you look at the detail of this tax increase, Biden wants to raise taxes almost twice the levels at which has Trump.R .: Biden’s proposal tries to make the tax system more progressive.You want to skyrocket the tax burden on those with higher incomes, but there are economic impacts if you do that. And while it tries to raise taxes on the rich, it is hurting workers through those taxes, especially those that affect large companies. A few years ago, the US cut tax burdens on large companies to make them more competitive in the economy. global and we did it. Now we are much more competitive. However, Biden would raise tax burdens, take us in the opposite direction, and we would be less competitive in the global economy. We are seeing countries that are cutting taxes on large companies to incentivize investment and job creation. Biden, therefore, would lead the US economy and fiscal policy on the wrong path. Q .: When we look at the ‘Biden plan’, it is almost inevitable to draw a parallel with what is happening in Spain. All of Biden’s tax increases are included in the General State Budget. What do you think of the Spanish tax system? A .: The Spanish tax system is not competitive. Not only at the European level, but also at the global level. Your income taxes are very high, which in essence make it less attractive to invest or work in Spain. Taxes on large companies are also very high and this makes it less profitable to do business in Spain. In turn, it reduces the incentive to invest in material, production and hiring workers, and the Spanish government is acting on taxes at the wrong time. For example, applying tax charges on digital services.This punishes the new investors that the Spanish economy needs so much, such as online investment and digitalisation. We must not forget that it also wants to pay taxes on financial services and this hurts this sector. Therefore, the Spanish tax system is on the wrong track. I think the Spanish government is making a mistake with the fiscal policies it is carrying out. Q .: If Joe Biden finally wins the elections and becomes the next US president, what do you think would happen to the US economy? : Over the years, the US tax system has become a very competitive system globally. Now, if Joe Biden’s plan becomes law, it would lead the US in the wrong direction. Currently, among the industrialized countries of the OECD, the US is in position 21 in the Fiscal Competitiveness Index 2020. The ‘Biden plan’ would take us back to position 30 of the OECD countries behind Spain, Greece and from the least competitive countries in Europe.