MORICI: Biden’s tax policy would hurt investment, jobs and innovation | Notice

For family businesses, the bite would be particularly onerous. Biden wants to both tax capital gains on death and levy inheritance tax. This would impose a death tax on many businesses of over 70%.

In most cases, it would be simply too expensive to buy enough life insurance on the founder and his spouse to cover these taxes, and these would force the sale of many car dealers, general contractors and other businesses. decent size. Their kids might find themselves out of work in family businesses and might wonder why mom and dad worked so hard to build a legacy.

In the high-tech industry, venture capitalists are betting on startups that promise to solve tough engineering problems. Often the goal is a big payoff from an initial public offering or by selling to a giant like Google GOOG, + 0.76%, Amazon AMZN, -0.14% or General Motors GM, +0.57 % with the product taxed at preferential capital gains. rates.

Entrepreneurs are good at spotting consumer interests and solving difficult design problems. They lack Elon Musk’s flair for marketing or Tim Cook’s skills in government and international diplomacy. Higher taxes on capital gains would encourage founders to keep their businesses longer than their broader management skills warrant.

At the same time, this foreclosure effect would reduce the value of startups to venture capitalists, discourage investment in new high-risk, high-yield companies, and slow the diffusion of new technology into the U.S. economy and sales. in foreign markets. These would reduce the aggregate contributions of new firms to US productivity growth, higher wages, and international competitiveness.


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About Perry Perrie

Perry Perrie

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