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Trump Loses the Tax Cut Plot
Wall Street Journal ^ | August 4, 2024 | WSJ Editorial Board

Posted on 08/05/2024 2:25:50 AM PDT by karpov

Does anybody in politics understand tax policy these days? The Biden-Harris Democrats want to raise tax rates to Thomas Piketty French socialist levels. Republicans want to cut taxes, but they want to do so for specific groups to buy their votes. They’ve all lost the growth plot.

Mr. Trump’s tax fumbling is especially disappointing because his 2017 cut in tax rates was the policy foundation for the strong pre-pandemic U.S. economy. But so far in this campaign he’s proposing hugely expensive tax cuts for different voting groups that won’t do much for growth.

We’ve written about his promise not to tax tipped income. Then last week he averred on Truth Social that “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” He needs to win the senior vote against Kamala Harris by a large margin, so he’s going right for their pocket book. We favor lower taxes as a matter of principle, but not all tax cuts have equal benefit. And this one is likely to backfire in spectacular fiscal and economic ways.

Social Security benefits weren’t taxed until 1983 when the Greenspan Commission recommended the idea to shore up the program’s dwindling finances. Congress moved to require beneficiaries with more than $25,000 in income to pay tax on up to 50% of their benefits. Ten years later Congress did it again by taxing an additional 35% of Social Security benefits for seniors with income above $34,000.

Taxing benefits is expected to raise $94 billion this year for the Treasury. But here’s a fiscal twist. Social Security benefits are indexed for inflation each year, but the income thresholds for taxing benefits aren’t. This means that taxing benefits will raise much more revenue over time as inflation boosts Social Security payments and retirement distributions.

(Excerpt) Read more at wsj.com ...


TOPICS: Business/Economy; Editorial; Politics/Elections
KEYWORDS: cheaplaborexpress; christophersimpson; enemymedia; fakenews; fusiongps; murdochjournal; nevertrumpers; openborderswsj; tds; trump; wsj; wsjsedition
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When the Social Security trust fund is scheduled to run out of money in 2035, it doesn't make sense to effectively raise Social Security benefits.

1 posted on 08/05/2024 2:25:50 AM PDT by karpov
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To: karpov

Give us a small flat tax around 7 percent and eliminate the IRS


2 posted on 08/05/2024 2:37:16 AM PDT by exnavy
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And here we have the WSJ, the mouthpiece of Murdock globalism and a charter member of the #NeverTrump movement, offering a helping hand to Donald Trump. DJT would be very wise to reject this GOPe nonsense about reducing corporate tax rates and instead concentrate on ridding America of the cancerous rot and corruption that has infested both political parties. Look to help those working in the Rust Belt rather than corporate CEOs.


3 posted on 08/05/2024 2:37:24 AM PDT by JonPreston ( ✌ ☮️ )
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To: karpov

They’re talking about the taxes on tips. Trump says he’s going to stop taxing tips and they’re trying to make the case that is buying votes. It’s a hard case to make that you’re doing ‘tax cuts for the rich’ when you’re targeting the wait staff in the service industry.


4 posted on 08/05/2024 2:40:50 AM PDT by Samurai_Jack (This is not about hypocrisy, this is about hierarchy!)
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To: karpov

When you’ve lost the WSJ editorial board … you’re doing something right in an election campaign.


5 posted on 08/05/2024 2:52:34 AM PDT by Alberta's Child (“Ain't it funny how the night moves … when you just don't seem to have as much to lose.”)
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To: All

the stock market is about to crash and wsj is worried about biden, kamala and trump. bless their hearts.


6 posted on 08/05/2024 3:04:13 AM PDT by SteveH
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To: karpov

Talking about tax cuts and rises as if they’re the definitive authority but settle only on Trump’s misguided tax cut proposals. Because they benefit one group over another. I’d submit that Democrats’ tax rise proposal affect far more and do nothing but fuel a bloated government hell-bent on implementing its stupid foreign policy influences solely through that money.


7 posted on 08/05/2024 3:06:20 AM PDT by Gaffer
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To: SteveH
They wanted open borders as a constitutional amendment, don’t forget. And they still cling to it in spite of the utter disaster it’s proven to be.
8 posted on 08/05/2024 3:14:56 AM PDT by Olog-hai ("No Republican, no matter how liberal, is going to woo a Democratic vote." -- Ronald Reagan, 1960)
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To: karpov

With everything in government, when you do it on its schedule, it’s too late.


9 posted on 08/05/2024 3:15:40 AM PDT by Jonty30 (Genghis Khan did not have the most descendants. His father had more. )
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To: Samurai_Jack

“They’re talking about the taxes on tips. Trump says he’s going to stop taxing tips and they’re trying to make the case that is buying votes.”

Actually, Trump proposed removing taxes from Social Security payments. That’s what the pandering is about.


10 posted on 08/05/2024 3:17:20 AM PDT by EQAndyBuzz (Paging Dr. Bandy Lee. Dr. Lee please pick up the white courtesy phone.)
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To: karpov

“But so far in this campaign he’s proposing hugely expensive tax cuts...”

“Expensive” for who? Answer: the filthy Union government! That’s the way these bastards think! Any break for taxpayers is viewed as an “expense” and is to be dealt with as such. Got to keep squandering billions on useless garbage don’t you know.


11 posted on 08/05/2024 3:18:22 AM PDT by Bonemaker (invictus maneo)
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To: JonPreston
JonPreston: "DJT would be very wise to reject this GOPe nonsense about reducing corporate tax rates and instead concentrate on ridding America of the cancerous rot and corruption that has infested both political parties."

Tax cuts are almost always a good idea, since they stimulate the economy and so generate more tax revenues.
But "tax cuts for the rich" is the Democrats' often effective response to any conservative Republican proposals.

I think that's why DJT concentrates on eliminating taxes on tips and social security, since those are clearly not aimed at "the rich".

The WSJ's opposition to Trump's tax cut plan is not necessarily a bad thing for Trump politically.

What will actually happen in Congress in 2025, regarding taxes or corruption, is anybody's guess today.

12 posted on 08/05/2024 3:23:43 AM PDT by BroJoeK (future DDG 134 -- we remember)
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To: Bonemaker
Got to keep squandering billions on useless garbage don’t you know.

Keep it down will ya? That Ukie leprechaun will show up again! There always after me lucky charms !!!

13 posted on 08/05/2024 3:26:55 AM PDT by Kudsman (Baby Lives Matter)
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To: EQAndyBuzz

Oh I didn’t know about that. Trump is talking exempting SS benefits?
That would be really something.


14 posted on 08/05/2024 3:46:41 AM PDT by Samurai_Jack (This is not about hypocrisy, this is about hierarchy!)
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To: karpov

1. It doesn’t matter whether his economic policy makes sense. Trump is our guy.

2. If you want a coherent, pro-growth tax plan, look to Ted Cruz (or even Rand Paul).

Cruz proposes to eliminate (1) the federal personal income tax, including tips and capital gains, (2) the corporate income tax, and (3) social security taxes, both employer and employee, and replace them all with ... a value-added tax.

Furthermore, this VAT would act as a border tax for countries that tax our goods via their VAT.

So, the Cruz plan delivers on Trump’s promises. I wonder if Trump, with his genius for communicating to middle class voters, has the Cruz plan in mind.

I myself wonder whether a VAT at a “reasonable rate” could actually do the job, and think a personal tax that kicks in at a multiple amount of national median income might be needed to generate the revenue needed to balance the budget (even after making huge cuts in spending).

As far as most people would be concerned, they’d be free of tax, including free of tax on tips and on social security benefits. Free of the paperwork as well as the tax itself. They’d get 100 percent of their earnings, including tips and social security. This would maximize their incentive to work and save for retirement (or any other purpose).

For those at the top, their personal income tax rate would still be cut, just not to zero.

For everybody, we’d have to pay VAT. For many people in the middle, they’d essentially break even. But even people who break even will benefit from the reduction of paperwork and strong economic growth.

And, for people at the bottom, there’d be huge incentive to move from dependency on government programs to independence. While each of us is rightfully concerned about how we’re being effected by economic policies, including the burden of taxes, the availability of good jobs, the rate of inflation and interest rates, I think that, deep down, we know that providing opportunities to our fellow Americans at the bottom has to be a part of making America great again.


15 posted on 08/05/2024 3:48:44 AM PDT by Redmen4ever
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To: Samurai_Jack

Yes, he is.


16 posted on 08/05/2024 3:53:52 AM PDT by vivenne
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To: karpov

People who rely on tip income and social security retirement payments tend to be both economically vulnerable and suffering badly from Biden’s government-caused inflation. Select tax cuts make equitable sense and are a politically pragmatic way to help get a pro-growth Trump administration back in power.


17 posted on 08/05/2024 4:03:12 AM PDT by Rockingham
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To: exnavy

Absolutely

Trump has the chance to revolutionize our country

Why should seniors pay taxes on money you’ve kept from ue


18 posted on 08/05/2024 4:04:35 AM PDT by nikos1121
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To: exnavy

Absolutely

Trump has the chance to revolutionize our country

Why should seniors pay taxes on money you’ve kept from ue


19 posted on 08/05/2024 4:04:42 AM PDT by nikos1121
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To: exnavy

That is exactly right. That is truly fair and simple to boot.

The tax code is only a mechanism to redistribute wealth and modify people’s behavior. Most recently it’s used to punish or reward people for political purposes.

I bet if someone ran on that issue alone he/she would have huge support.


20 posted on 08/05/2024 4:05:06 AM PDT by Thorium90
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