E.J. ANTONI And CADEN WOLF: The Middle Class Is Collateral Damage In Biden’s War On Wealth

The Biden administration’s hackneyed talking point of “the rich paying their fair share” sounds appealing at first. Who could be against fairness?

But there is nothing fair about a political agenda that punishes the middle class and lowers everyone’s standard of living — rich and poor alike.

In his proposed budget for 2025, President Joe Biden plans to not only increase income tax rates across the board, but also radically change the rules governing retirement accounts with large balances. What is being sold as a way to soak the rich will severely damage the average American’s ability to save for retirement.

Wealthy individuals with large retirement accounts will be forced to withdraw any savings over the government’s predetermined limits. To add insult to injury, those withdrawals will be taxed at a penalty rate.

This disincentivizes putting savings in financial assets like stocks. The result will be less money flowing into these traditional investments — vehicles which are ubiquitous among middle-class retirement accounts.

But Biden’s proposed changes would effectively force those with large savings accounts to liquidate their holdings and forbid those savers from rebuilding their drained balances. That represents a significant drop in demand for stocks and other financial instruments.

With that decline in demand comes lower prices. Thus, middle-class Americans will not see their retirement savings grow as quickly. But it gets worse for these folks.

Instead of owning things like stocks held in a retirement account, the wealthy will have to use other vehicles for investment, like housing. The essential mechanics work the same whether a person invests in equities or real estate: you buy an asset today with the anticipation of selling it in the future at a higher price.