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 ...
"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."
IOW: "Hey, we're gonna just take this right back and call it normal."
“I think that’s why DJT concentrates on eliminating taxes on tips and social security, since those are clearly not aimed at “the rich”.”
Exactly. Trump’s playing chess while the MSM is playing checkers.
Hi Lurker. The federal budget was 2 percent of GDP back in the day when the tariff was the main source of revenue. The federal budget is now 20 percent of GDP.
A tariff deigned to raise 20 percent of GDP wouldn’t raise any revenue. Such a high tariff rate would cut off imports and then there would be no imports on which to apply the tariff.
This correlation of tax rates and tax revenues is sometimes called the Laffer Curve. But, it goes wa-ay back. I could cites Ibn Khaldun. I notice wikipedia see the connection:
https://en.wikipedia.org/wiki/Laffer_curve
Khaldun says when great nations are in the ascendancy, they use low tax rates to generate large revenues; but, then they are descending, they use increasingly higher tax rates to generate smaller tax revenues.
The whole idea of Trump is to reverse the course of the U.S., to put us back on the road of greatness. But, there’s no magic wand to undo the Laffer curve.
Besides, if we cut off imports, we cut off exports. The Smoot-Hawley Tariff of Herbert Hoover did not prevent the Great Depression. For the temporary benefit it provided to domestic manufacturers, it devastated our farm economu. The Smoot-Hawley Tariff in conjunction with the negligence of the Federal Reserve turned what might have been mere recession into the Great Depression. In particular, the Smoot-Hawley Tariff devastated the ag regions of the country, contributing to the Dust Bowl, and lead to hundred of failures of rural banks.
Republican Senators and Congressmen are mostly from the rural parts of the country. I don’t think they will go along with another Smoot-Hawley Tariff.
Cut spending. Spending = taxing + borrowing + inflation. Cut spending abroad. Cut spending at universities and colleges. Reduce US Government employment by 50%, 90% reduction for DOJ and EPA. Cut welfare and other social spending programs.
Tax remittances to Mexico and elsewhere.
Corporate taxes are paid by people: customers through increased prices, employees through reduced wages and bonuses, employees through reduced employment, and stockholders. Corporate taxes are smoke and mirrors. There is no tax on corporations as the tax is passed on to people. Any corporate tax should be uniform, one rate for all, with no exceptions.
Undo all regulations from the past four years.
Sounds like these complaining elites need their taxes raised. I’m all for taxing the living hell out of the millionaires and billionaires.
The founders taxed tariffs because the country and people were so poor there was nothing else to tax
“ The federal budget is now 20 percent of GDP.”
Therein lies the problem. Cut off the revenue to the Federal leviathan and cast it back into the Constitutional prison designed for it.
L
“Sounds like these complaining elites need their taxes raised.”
Yes I agree with this but lets ensure we make a distinction between taxing ‘the elites’ and taxing ‘the corporations’. Because democrats possess a special inability to comprehend the basic economic principle that the cost of goods always gets passed to the consumer. So a tax on ‘the corporation’ means a tax on the consumer. That’s what they mean by ‘tax the rich’. That blindness stems from a sophistry that is absolutely astronomical in scale.
Then that gets muddied because the corporations easily purchase the politicians from both camps. Then the democrats can say “oh... well both sides are guilty!”.
Do you always just make things up?
At the Founding, the states generally taxed land. Indeed, they tended to tie the vote with land ownership (and hence tied the vote with paying taxes).
As for the federal government, it had three sources of revenue: (1) the tariff, (2) excise taxes (e.g., on alcohol), and (3) land sales.
As for poverty, by current standards, just about everybody in our country and all throughout the world was in extreme poverty by current standards back in those days.
Standards of living of working class people rose with the industrial revolution. A couple hundred years of growth, albeit interspersed by recessions, brought about the standard of living we now enjoy.
To illustrate this tremendous change, back in the early to mid 19th Century, Karl Marx and others criticized capitalism because of the low standards of living of the working class. They argued that continuing low standards of living, combined with deteriorating social conditions, would bring about their coveted communist revolution.
Well, guess what, it became clearer and clearer that capitalism was raising the standards of living of the working class. So much so, that by the mid 20th Century, Herbert Marcuse and the so-called New Left, criticized capitalism on other grounds. Racism, sexism, and other forms of alienation replaced economic division.
Today, the neo-Marxists criticize capitalism because it is too successful. They say we’re living at an unsustainable level of income.
This is like somebody crossing the street who is so afraid of being run over by a passing vehicle, that he throws himself in front of a truck. These people say they’d be happier in Cuba or Venezuela, than in the U.S.
But, I don’t notice any of them moving.
Some Hollyweirdos tell us they’re going to leave if Donald Trump is re-elected this fall. If anybody is wavering, just tell them about the Hollyweirdos leaving. I know they lied about leaving back in 2016, and probably are lying again this time. Still, one can always hope.
Nice going, Lurker. Did you know you were being facetious in your original post? And, what proof can you give that you’re not being facetious this time?
He’s done both, and I’d rather see tipped employees be required to follow the same wage laws everyone else does, sans Ag companies.
I fail to see a reason to tax SS. Considering it is repayment on decades of interest free loans to Fedzilla.
The perverse inverted pyramid of taxation (fed, state, and local) needs to be toppled.
All essential services are provided at the local and state level, and the percentages of taxes paid for each level of service should reflect the degree of importance of the service to our daily lives, local tax highest, state tax amount lower than that, and fed taxes lowest of all.
If we are going to allow all citizens to vote then ALL citizens need to pay fed income taxes, regardless of income.
Make it a flat tax and let the lower 50% decide how much they are willing to pay to fund the federal govt. This constitutes equal treatment under the law.
I say set the fed tax level at 3%. I am very confident the lower 50% will not vote to make it any higher because to do so is to will hurt themselves more than the successful members of society that they are so willing to punish and steal from.
It also means that the size of fed govt will quickly collapse to its rightful size, which is minimal.
The corporations should be taxed as well. On worldwide income. If they don’t want to pay their employees a decent wage, there should be an additional tax for every employee they have receiving government benefits to recoup the cost. The problem is, these mega corporations profiteered extensively from Covid while the small businesses went under. It’s time for a reckoning and to relieve the tax burden on the middle class.
Do you write comedy?
Wall Street RINO journal.
You can’t cut taxes to the multitude of libtarded welfare-sucking freeloads because they don’t pay any. You can only cut taxes on those that actually pay taxes.
How about stopping giving out welfare, especially to the illegals that keep crashing our border (and put the freaking military on the borders with live ammo like should have been done 30 years ago). 95% of the deadbeats would start working to earn their keep. The 1 out of 20 that can’t, well make them prove their case and then they can be supported. maybe...
The WSJ is a Never Trumper hive. Cutting taxes on gratuity and SS is the right thing to do. Doing the right thing is an alien concept to the ruling class.
The WSJ long ago quit being a place for good economic advise. They have for the most part gone the way of other woke and semi woke organizations spouting leftist ideas.
And thus we begin a circular argument.
The corporations never pay taxes. The taxes are always paid by the consumer of the goods. So more expensive goods means that corporations need to increase wages passing that cost along to the consumer again. And so the inflationary spiral escalates as the goods again become unaffordable.
Most democrats will respond that there’s no evidence that corporations pass their costs along to the consumer. At which time i disengage from the discussion.
that too
When Democrats talk about social security, the LAAP-dog media frames it as poor little old ladies who desperately wait for their monthly checks to live on.
When Republicans talk about social security, the LAAP-dog media frames it as rich retirees who don't need the benefit and should be means-tested before receiving it.
-PJ
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