By John Ubaldi, “Ubaldi Reports”
Economics is the central theme of the 2020 presidential election, so during a campaign event at the United Auto Workers Region 1 headquarters in Warren, Michigan, Joe Biden outlined his economic jobs message.
This is in sharp contrast to the economic policies of President Donald Trump.
Throughout his time in Warren, Biden spoke often that getting a good job should be an “expectation” and if elected his administration would stop the “offshoring” of jobs overseas.
What the media failed to ask or report is how would Biden bring these jobs back from overseas when his tax proposal seeks to raise $4 trillion in new taxes on both individuals and corporations?
Why should the American people believe Biden now when he voted for every trade deal and supported every effort to bring China into the western economic system including granting Beijing “Most Favored Nation” status, and supporting entrance into the World Trade Organization?
His support for every trade deal had the cumulative effect of shipping millions of jobs overseas which hollowed out U.S. manufacturing. This left economic ruin and devastation in much of the mid-west and the rust-belt regions of the country.
Even CNN’s Jake Tapper questioned Biden’s past approval of NAFTA and during the back and forth encounter the former vice president reluctantly agreed that the U.S.-Mexico-Canada trade agreement negotiated by President Trump was better.
In the interview Tapper placed a different spin on Biden’s past support of previous trade deals.
Tapper stated, “I’m sitting here listening to your pitch and I’m thinking, ‘I like what he has to sell but he’s part of the establishment that has been selling my jobs down the river. He supported NAFTA, he supported Most Favored Nation status for China and Trump renegotiated NAFTA and Obama and Biden didn’t.’”
His only response was political rhetoric as “We inherited the greatest recession short of a depression.”
Nothing was mentioned of his support for the Trans-Pacific Partnership agreement the Obama-Biden strongly supported which was eventually revoked by the Trump administration. Like Hillary Clinton in 2016, Biden flip-flopped first supporting it while serving as vice president then changed his mind by stating he would advocate changes to it, but never stating what changes he would make.
In his address in Michigan Biden’s plan called for a 28% corporate tax rate, an increase from the current 21% rate. It would create a 10% “offshoring penalty surtax” on those taxes for profits U.S. companies make on goods made overseas and sold in the U.S., which would result in a 30.8% tax rate.
A Biden economic surtax would apply to all call centers or services that have been outsourced by American companies, but service U.S. consumers, when they could have established these centers in the United States.
Various economic experts have questioned the viability of Biden’s plan, as it may have the opposite effect by pushing companies to have foreign companies supply the products, and as we have seen in the Obama-Biden administration making the U.S. a less attractive place to invest.
Also problematic is that the nonpartisan Tax Foundation has reviewed Biden’s proposed tax strategies, which it says would include raising individual income taxes and payroll taxes on individuals with incomes above $400,000. The Democrat’s plan would raise $3.8 trillion over the next decade, the foundation estimates. Unfortunately by raising the corporate tax rate and on individuals you inherently are affecting the middle class, as was the case during the Obama-Biden administration.
James R. Hines Jr., research director at the University of Michigan’s Office of Tax Policy Research and economics professor stated “If you want to provide good jobs for Americans and you want an attractive place to do business, you need to make it competitive with the rest of the world and increasing the rate from 21% to 28% does not make you more competitive with the rest of the world. That’s putting it mildly.”
One aspect of Biden’s economic plan does include a 10% tax credit for certain investments that can incentivize manufacturing jobs in the United States. Biden’s “Made in America” tax credit would be available to companies who rejuvenate closed manufacturing facilities, hire more U.S. workers, and incentivize bringing jobs back to America.
Patrick Anderson, principal and CEO of Lansing-based Anderson Economic Group stated that “If you made it less expensive to invest in the United States, more people would invest in the United States.”
One only has to look at California as an example of progressive Democratic polices in action, as the state has made it more expensive to do business and ironically is the last place any business would relocate or set up a manufacturing facility.
A prime example Elon Musk is now relocating his Tesla manufacturing facility to Austin, Texas because of the pro-business environment provided.
Anderson sees the offshoring tax as “completely unworkable sentiment-based tax policy that even a Democratic-controlled Congress would be unlikely to adopt because it would have the effect of reducing the number of jobs in America.”
The Biden plan, Hines says, doesn’t push foreign companies that sell in the U.S. to have production here.
“All that’s going to do is if there is some product where the most efficient way to manufacture it is to make it in Canada and sell it in America, there will only be Canadian companies that do it … and American companies won’t,” Hines said. “But have you really achieved anything if you’ve stopped American companies from doing it, but you’re not stopping Canadian companies?”
Biden fails to mention that his plan would have to renegotiate the current USMCA which he stated was better than NAFTA which he supported.
Biden touts his working class roots having been born in Scranton, Pennsylvania, but his family left the area at the age of ten, and spent the rest of his life in Delaware. Biden routinely mentions he is the friend of the working class, but the facts tell a different story.
Since his election to the Senate in 1973, Biden has supported every trade deal, every facet of Chinese engagement that resulted in millions of well-paying manufacturing jobs outsourced overseas.
Very little has been made of Biden’s close relationship with China, and how his son Hunter Biden benefited while he served as vice president.
After forty seven years in Washington, why should we believe anything Biden is proposing?