Congressional Democrats are negotiating a $3.5 trillion spending bill they hope to finalize in the coming days.
The proposal amounts to the largest expansion of the federal government since the Great Society programs of the 1960s. The plan would be paid for by an increase in the corporate tax rate (reduced under the last administration), but it also includes provisions that would hurt a small business like mine.
Sen. Joe Manchin, D-W.Va., is one of America’s only hopes in preventing this legislation from becoming law. He is one of the few Democrats in Congress to put sober analysis of the bill ahead of partisan interests. He’s wisely called for a “strategic pause” in moving forward. A closer look at the legislation’s provisions demonstrates that West Virginians should support his position.
The bill would implement vast new government programs that would exacerbate the current labor shortage. It calls for free college and the standardization of the current monthly child tax credit that acts as a de facto universal basic income. Such provisions force small businesses to compete against the government for employees — always a losing battle. The bill also would expand Medicare to younger people, threatening its already precarious solvency just as millions of Baby Boomers turn 65 each year.
The legislation would be especially harmful to West Virginians, because its numerous green energy mandates would further devastate Mountain State energy producers and raise energy costs on ordinary residents. For instance, the proposed Clean Electricity Performance Program would eliminate coal-powered electricity by the end of the decade. Also, the proposed Civilian Climate Corps would fund thousands of climate activists to attack traditional energy producers and users.
These misguided programs would be paid for through one of the largest tax increases since the 1960s. For example, the legislation calls for a massive tax hike on corporations, including the 1 million American small businesses that structure as corporations. The bill calls for greatly curtailing the 20% small-business tax deduction that companies have used to hire new employees, raise wages and expand. And it would raise other taxes, such as the capital gains rate, which would make it more difficult for successful employers to hire and invest.
President Joe Biden and congressional Democrats claim these tax increases won’t hit ordinary people. Yet, even left-wing economists admit that most of the cost of increased business taxes is paid for by workers, in the form of lower compensation.
Even those not in the labor market will suffer from the legislation’s inflationary effects. Manchin highlights how existing recent federal spending “has imposed a costly ‘inflation tax’ on every middle- and working-class American … bleeding the value of Americans’ wages and income.” West Virginians can see this inflation every day, when they go to the grocery store or gas station.
This inflation is especially painful for our state’s retirees and those on fixed incomes, and it would only worsen if this spending bill is passed and dilutes the value of the dollar even more.
The economy is at a turning point. The vaccine-induced economic recovery from the pandemic has stalled. Stagnation has begun. A few trillion dollars in additional federal spending and taxes will reverse recent economic progress, especially in West Virginia, where the energy sector is in congressional Democrats’ crosshairs.
Manchin is right to oppose this big government bill. West Virginians should wholeheartedly support his position.
Dr. Chris Stansbury is a partner at West Virginia Eye Consultants and a member of the Job Creators Network. He is a former Republican member of the West Virginia House of Delegates.