Nobody likes to pay more at the pump or on their tax bill, but if Washington policymakers have their way, American workers and businesses will be doing both soon.
Gas prices have skyrocketed to their highest level in more than seven years, leaving many of us distraught as to how to pay and budget for increased fuel prices. Americans are now paying about $3.40 per gallon of fuel compared to about $2.10 per gallon just a year ago. In West Virginia, our state currently ranks 9th among all states in gas price increases, tied with Washington, D.C., Virginia, Kansas, and Iowa at a 3-cent-a-gallon hike.
On top of this, Washington Democrats were more than happy to pile on tax hikes to help pay for the Build Back Better plan, including raising the Global Intangible Low Tax Income (GILTI) rate, which would impact any American business with operations or supply chains abroad. If there is one thing that Washington bureaucrats do not understand, it is that American workers and businesses cannot afford these extra cost burdens. Thankfully, West Virginia’s Senators know we need to prioritize pocketbook issues, the ones that really matter and affect real Americans, instead of throwing more money at our problems.
Americans across the country are still feeling the effects of slow economic rebounds from the pandemic and do not have high hopes for our economy in the future. Gallup’s Economic Confidence Index — which captures Americans’ views of the economy, their evaluation of current economic conditions, and their perception of whether the economy is getting better or getting worse — found that 60% of U.S. adults say the economy is getting worse.
As spending power dwindles and Americans are forced to allocate more of their paychecks toward necessities like fuel and food, this figure is likely to only grow, reflecting just how disastrous many of the economic approaches by federal policymakers have been.
These economic sentiments are also shared by small business owners. A poll from the National Federation of Independent Businesses (NFIB) found that 77% of our nation’s small business owners reported that federal business income taxes, which would include fees like GILTI, were very or moderately burdensome.
Given that the pandemic created massive job loss that forced many into starting their own small businesses as a means of survival — something that West Virginia Secretary of State Mac Warner said was “critical” to our state’s economy and recovery — it seems ridiculous to implement more taxes on Main Street enterprises.
In particular, the GILTI tax would have wide-sweeping consequences for businesses small and large alike across the country. GILTI is a tax placed upon the foreign earnings of American companies abroad, which means that any business that sells products abroad or utilizes foreign partners in supply chains would be subjected to this fee. At the moment, the U.S. is the only country that taxes the foreign profits of its companies, already putting many at a competitive disadvantage abroad.
Currently, 136 countries belonging to the Organization for Economic Cooperation and Development (OECD) are considering implementing their own version of GILTI through a global minimum tax effective in 2023. But we will not know for sure until at least 2024 if these nations have actually implemented such a fee. Raising GILTI before the OECD process plays out only inhibits U.S. economic growth and further places our businesses at a competitive disadvantage against rivals like China, while simultaneously hurting the enterprises that form the backbone of our communities.
Analysis from the National Association of Manufacturers emphasizes the economic consequences of raising GILTI and other federal taxes, as over one million jobs and close to $20 billion in economic activity would be lost at a time when workers and businesses need jobs and income the most.
Shelley Moore Capito and Joe Manchin made us proud by standing up against Build Back Better that do not hurt American workers and businesses. If gas prices and other expenses continue to rise, adding more taxes will not offset those costs. Washington lawmakers are simply digging deeper in the hole they have created for us, and it is about time we climb out.