Bizarro Robin Hood: Taking from the Middle Class to Give to the Rich
Biden's agenda would result in massive giveaways to the rich and politically connected corporations rather than struggling Americans.
On the (virtual) campaign trail, former vice president and presidential candidate Joe Biden offers voters the same “friend of the working class” pitch he’s offered over the course of his political career.
The former vice president and U.S. Senator has repeatedly railed against income inequality, but as voters have come to realize in elections past, campaign rhetoric rarely matches reality. Biden’s current “Build Back Better” agenda would result in massive giveaways to wealthy Americans and politically connected corporations rather than struggling Americans. Biden should replace these Robin Hood-in-reverse policies with a genuine agenda to help working class Americans.
It’s understandable that politicians and presidential candidates try to market themselves as down-to-Earth and relatable. In the midst of a struggling economy and crippling pandemic, Americans want elected officials who can empathize with their plight and offer realistic solutions. Too often, these “solutions” amount to a brazen giveaway of taxpayer dollars to well-off citizens. For example, subsidies targeting “renewable” technologies disproportionately benefit affluent households who would have made green purchases anyway.
According to a 2018 analysis by Pacific Research Institute scholar Dr. Wayne Winegarden, roughly 80 percent of electric vehicle (EV) tax credits accrue to households earning $100,000 or more. This misguided policy has not only benefited higher income households, but also already-subsidized automakers with record-high stock market valuations. This tax credit has been phased out for well-heeled automakers such as Tesla, since Tesla and other manufacturers have manufactured more than the initial subsidy threshold of 200,000 EVs. But, according to a statement by the Biden campaign, “Biden will restore the full electric vehicle tax credit to incentivize the purchase of these vehicles.” President Biden would likely push to make the tax credit open-ended, ensuring that manufacturers could continue to benefit from the credit even after producing hundreds of thousands of vehicles.
The EV giveaway is one of many Robin Hood-in-reverse policies championed by the presidential contender. Under Biden’s higher education policy, undergraduate federal student loan holders would only have to pay 5 percent of their discretionary income (over $25,000) toward loans over a twenty-year period. After twenty years, the remainder will be forgiven. That generous policy disproportionately benefits the top quartile of households with the highest earnings, who hold 34 percent of outstanding education debt according to a 2019 Urban Institute analysis. The proposal puts taxpayers on the hook for the loan debt of the wealthy.
For example, if a student from a wealthy household accumulates $150,000 in debt at a 4-year college and earns a comfortable $80,000 per year in discretionary income coming out of the college, that repayment would only equal $2,750 per year. Even if the student’s discretionary income reached $130,000 per year over the 20-year repayment period, taxpayers would still be subsidizing roughly $70,000 of the student’s tuition at the end of the payment period.
Even the presidential candidate’s progressive-sounding tax plan would spell disaster for America’s working families. President Biden would hike the corporate tax rate from 21 to 28 percent, which would result in higher prices, lower wages, and fewer opportunities for struggling Americans. According to a Tax Foundation analysis, raising the corporate tax rate to 28 percent would lead to 187,000 fewer jobs and result in a nearly 1 percent pay cut for workers. It’s little wonder that American Enterprise Institute scholars Kyle Pomerleau, Jason DeBacker, and Richard W. Evans conclude that, under the Biden plan, “The bottom 95 percent of taxpayers would generally face a tax increase due entirely to the corporate income tax increases.”
Biden hardly has a monopoly on costly, regressive policies. President Trump’s tariff policies have disproportionately hit households struggling to pay the bills on time. Levying more than $400 in annual trade taxes on middle-and-lower class families is a terrible plan, regardless of the political party responsible. Meanwhile, there have been troubling revelations that taxpayer dollars from the Paycheck Protection Program (championed by President Trump and both parties) funded the endeavors of rich celebrities such as Kanye West and Robert De Niro.
It’s up to each presidential candidate to assure hard-working Americans that they won’t be forced to foot sky-high bills and fund the lifestyles of their wealthier neighbors. But that’s a hard sell, given the political duopoly’s history of Robin-Hood-in-reverse policies. The onus is on the political class to prove that they’ll serve the working class.
Ross Marchand is the Vice President of Policy for the Taxpayers Protection Alliance.