President Biden’s recent State of the Union address has come under criticism from conservative voices, including Gary Cohn, IBM vice chair and former Trump economic adviser. Cohn argues that Biden’s claim that billionaires pay a lower tax rate than teachers is flawed, as billionaires with income in the U.S. actually pay at least 20% in taxes.
During his appearance on CBS’s “Face the Nation,” Cohn pointed out that the bottom 50% of earners in the United States pay only 2.3% of the taxes collected, while the top 10% pays over 70%. He credits this discrepancy to the tax code reforms implemented by the Trump administration in 2017.
Cohn also highlighted a problem with Biden’s focus on billionaires, noting that being a billionaire is a measure of net worth, not taxable income. He explained that someone could have a high net worth but no taxable income, or vice versa.
“We do a very good job in this country of taxing income,” Cohn said. “There is no income in this country, unless you buy a tax-free bond, that doesn’t get taxed at a minimum of 20%, whether it’s interest or dividends or capital gains. So, there’s no billionaire in this country that has income that is not paying at least 20%.”
Biden’s proposal to impose a 25% tax on the wealthiest Americans has been met with skepticism by conservatives. They argue that the focus should be on creating a favorable environment for economic growth, rather than targeting specific individuals or corporations with higher taxes.
In addition to the proposed tax on billionaires, Biden also aims to increase the corporate tax rate from 21% to 28% and raise the corporate minimum tax for companies reporting over $1 billion in profit to 21%. These proposals have raised concerns among conservatives about the potential impact on businesses and economic growth.
While Biden’s State of the Union address may have resonated with some, critics like Cohn argue that the portrayal of billionaires paying a lower tax rate than teachers is misleading. They argue that the focus should be on comprehensive tax reforms that promote economic growth and benefit all Americans, rather than singling out specific groups for higher taxes.
As the debate over tax policy continues, conservatives will likely continue to push for a more business-friendly approach that encourages investment and job creation, while criticizing proposals that they believe could hinder economic growth.
