Joe Biden wants to raid Americans’ retirement accounts

Before anybody can claim that I am circulating a conspiracy theory, or citing an unreliable “news” source, I am going to quote President Biden’s State of the Union address and his own website ( as the sources of this information.  I will then encourage readers to circulate this information as widely as possible via social media, letters to the editor, and talk radio to educate the public between now and Election Day.

The State of the Union address says in part, “Under my plan nobody earning less than $400,000 will pay an additional penny in federal taxes. ... It’s time to raise the corporate minimum tax to at least 21% so every big corporation finally begins to pay their fair share.”

The site adds, and emphasis is mine,

Corporations received an enormous tax break in 2017. While their profits soared, their investment in their workers and the economy did not. Their shareholders and top executives reaped the benefits, without the promised trickle down to workers, consumers, or communities. The President’s Budget would set the corporate tax rate at 28 percent, still well below the 35 percent rate that prevailed prior to the 2017 tax law. In addition, the Budget would raise the Inflation Reduction Act’s corporate minimum tax rate on billion-dollar corporations that the President signed into law from 15 percent to 21 percent, ensuring the biggest corporations pay more of their fair share. These policies are complemented by other proposals to incentivize job creation and investment in the United States to help ensure broadly shared prosperity.

We Have Met the Corporations, and They Are Us

Biden must really agree with Barack Obama’s position that most people who live outside deep-blue Democrat strongholds like New York City, Los Angeles, Chicago, Boston, Philadelphia, and so on as bitter, small-town people who cling to guns and religion.  He seems to add his own belief that they are too uneducated and/or stupid to recognize that “the corporations” are not shadowy monoliths run by cigar-smoking capitalists, but rather the property of every single American who owns stock or mutual funds, including in retirement accounts.  Roth IRAs are in particular supposed to be absolutely inviolable with respect to taxes.  Once we fund them with annual deposits, or rollovers from ordinary IRAs upon which we pay income tax, the Internal Revenue Service has no further claim on them.

Investments get their growth and income from dividends and capital gains, both of which come from corporate profits.  A tax increase on corporate profits is therefore a tax on every single American with investments, regardless of his income.  It is in fact a regressive tax on lower earners.

Consider for example a single person with, to keep matters simple, no ordinary income who gets less than $47,000 a year from capital gains and qualified dividends.  He would pay no tax at all on this income. Somebody who makes more than $47,000 pays a marginal tax rate of 15% on this kind of income.

Now suppose the person’s share of a corporation’s profits is $10,000 prior to payment of any corporate and individual taxes.  The current maximum corporate tax rate is 21%, so each person pays $2,100, regardless of his tax bracket, before he sees even a penny.  The lower-income person keeps the remaining $7,900.  The higher-income person pays 15% on the $7,900 in dividends and capital gains for another $1,185 and keeps $6,715.  The difference in favor of the lower-income person is the $1,185 paid by the higher earner.

Here is what happens if Biden manages to increase the corporate income tax to 28%.  Each investor now pays $2,800, regardless of income level, before he sees a penny.  The lower-income person keeps the remaining $7,200.  The higher-income person pays 15% of this remainder, or $1,080, and keeps $6,120.  The difference in favor of the lower-income person is now only $1,080 rather than $1,185, which makes the change a regressive tax.  Every single American with even ordinary taxable investment income needs to know this.

A Backdoor Tax on Roth IRAs

Remember that Roth IRAs are supposed to be tax-free, end of story.  Assume again that we start with $10,000 in corporate profits that either are paid out as qualified dividends or capital gains or can be realized as capital gains if kept as retained earnings (i.e., the corporation is worth more per share).  Right now, the owner of a Roth IRA receives $7,900 for every $10,000 in corporate profits.  Biden’s tax proposal would reduce this to $7,200.  Another way of saying this is that Biden is proposing a 33.3% ($700/$2,100) tax increase on Roth IRAs that is, however, invisible because it never shows up on the taxpayer’s Schedule B, Schedule D, or Form 1040.

If the Democrat left thinks this is a good way to raise federal tax revenues, it is certainly free to try to make this case in the court of public opinion with a jury of roughly 160 million registered voters, to reach a verdict in November.  This jury is, however, entitled to the truth, the whole truth, and nothing but the truth, and the truth, as shown above, is that the proposed tax plan affects all American investors — not just the “rich” who make more than $400,000 a year.

This information won’t have much effect on the election if it stays here at the American Thinker, so it is important to take it viral between now and November.

Civis Americanus is the pen name of a contributor who remembers the lessons of history and wants to ensure that our country never needs to learn those lessons again the hard way.  The author is remaining anonymous due to the likely prospect of being subjected to “cancel culture” for exposing the Big Lie behind Black Lives Matter.

Image: Gage Skidmore via Flickr, CC BY-SA 2.0.

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