Nobel-prize-winning economist Milton Friedman famously quipped that there’s no such thing as a free lunch. Well, despite the Biden administration’s rhetorical spin, there’s also no such thing as a multi-trillion-dollar spending plan that costs “zero dollars.” Indeed, Biden’s plans include a vast suite of tax hikes to “pay for” the proposed spending—hikes that would leave the US with the highest top income tax rate among developed nations, according to one analysis.
The right-leaning, nonpartisan Tax Foundation examined the updated details of the president’s “Build Back Better” tax proposals. It reviewed the new proposed tax surcharges on high earners, proposed redefinition of certain tax bases to include more people, and already-scheduled increases in income tax rates. Under this tax regime, the Tax Foundation warns that accounting for federal, state, and local taxes, the US would reach a 57.4 percent top income tax rate—meaning that above a certain level of income, nearly 60 cents out of each additional dollar earned must go to the IRS.