Taxes
To help eliminate our budget/debt problems, the debate includes taxation, increase taxes or decrease taxes the left and right will say respectively. Both will say we have a need for a new tax code, but will not agree on a proposal for a new code. Everyone who manages a checkbook has seen budget problems before and knows how to correct it - reduce expenses and increase income. Everything else we here about this subject beyond these two facts is just noise and should be ignored. The political left and right cannot agree on how to correct this problem. Doing something is also better than doing nothing, which is what this stalemate is giving us now. The left's solution to our problem is to increase taxes on the rich to increase income. Currently the top 20% of income earners pays 80% of the federal tax burden. So do we want them to pay 100%? 110%? 120%? Maybe just write the check every year for the entire cost of government, whatever it is? Clearly this is not the solution. You have also heard that in the booming 1950's the top tax rate was 90% so decreasing taxes for growth is false. First, it is true that in the 1950's top tax rates were 90%, but no one paid it. Second, marginal tax rates are a better comparative statistic and are much higher today than in the 1950s. Third, the statement is oversimplified, incomplete and the conclusion is wrong, as proven in the 1980s. The left also consistently disparages the Bush Tax Cuts, as causing income inequality and the deficits we currently enjoy. Yet these tax policies actually reduced taxes at all income levels. Plus, when faced with a chance to end them, the left extended the cuts as a positive factor on the economy. The right wants us to reduce spending and taxes, which is also a poor solution in a recessionary economy. But the truth is we must do both (reduce expenses and increase income), we must do it now and it will not be easy. Untouchable entitlements are the problem and must be restructured. Adding another entitlement, Obamacare, to this mix just makes the problem worse. All the political hot air outside these facts is simply a distraction from the difficult but obvious answer. As to a new tax code - a must. The current tax code is over 60,000 pages long! A 2012 report estimated that it took 6.1 billion hours preparing taxes. What a waste. See the 2017 Income Tax tables for your information.
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A debate on the right about the 'bi-partisan tax deal'

1/27/24
from The Gray Area,
1/27/24:
Two conservative organizations have decidedly different views of the 'bi-partisan tax bill'.  According to the Heritage Foundation, it appears the 'bi-partisan tax bill', The Tax Relief for American Families and Workers Act, is moving through the House in near-record time. It was introduced on January 19th, reported out of committee on the 23rd, and could receive a vote on the House floor next week. While this bill has been branded as full of middle-class tax cuts and pro-growth reforms, a closer look reveals concerns. They list a myriad of problems including:
  • Enabling an increase in subsidies for single parents rather than promoting and strengthening married, two-parent households.
  • 90%+ of the bill’s projected cost would go toward welfare expansion - not “tax relief”.
  • Both programs are already riddled with fraud. The improper payment rates for ACTC and EITC were 31.6% and 15.8% respectively. Expanding and altering its function will only make this worse.
  • The work requirements are so weak that to qualify for the benefits it would be enough to work part time, part of the year, even if you only work every other year.
  • It fails to close an existing loophole, allowing illegal immigrants who have children born in the U.S. to be eligible to claim these welfare benefits.
John Goodman of The Goodman Institute has an article in Forbes which is titled; Two Cheers For The Bipartisan Tax Deal. Goodman says; A rare bipartisan agreement in Congress would create a larger child tax credit for parents and extend some key business tax breaks in the 2017 (Trump) tax reform bill that have expired. Democrats are said to favor the former and Republicans the latter.
  • Business tax cuts. The latest studies show that the 2017 corporate tax cuts have had a major impact on domestic investment. The Tax Foundation estimates that extending the provisions that have expired would increase the capital stock by about 1 percent and add more than 100,000 jobs.

On the other side of the aisle, the Democratic IRA bill has all kinds of tax subsidies for green business. So, both parties implicitly agree that taxes affect business behavior. The most meticulous scholarly study of the matter, [says] a cut in corporate income tax leads to higher worker wages and higher corporate taxes lead to lower wages.

  • Critics of the budget deal on the right claim that the work requirements for the child-care credit are too weak and that the proposal is not fully funded. However, when the credit had no work requirement at all (during the pandemic), it apparently had no impact on labor market participation. At a minimum, the new proposal is work- neutral.
Congressional Democrats are apparently willing to sign on to a proposal that spends half the money on business tax cuts and the other half on what is essentially a Republican approach to poverty amelioration. That’s a deal Republicans should seriously consider accepting. Sources told Fox News Digital that Speaker Mike Johnson, R-La., and Ways & Means Chairman Jason Smith, R-Mo., aim to push it straight to the House floor under "suspension of the rules," bypassing procedural steps in exchange for raising the threshold for passage to two-thirds.... means he'll need at least 75 Democrats on board if the House is in full attendance. "I'm sorry. I was sent here to cut spending and to secure the border," Rep. Chip Roy, R-Texas, said. "Some of the tax policies I firmly support, but we should be making tax policy permanent, not these, like, temporary little additions. I think that's a problem. And importantly, the child tax credits . . . going to children of people here illegally, and there not being real brakes on that possibility." That last point, 'credits for children of people here illegally', needs to be negotiated out. Otherwise, the two sides should be able to come together. More From Forbes: More From Daily Signal: More From FoxNews:


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