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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At End of Trump Tax Cuts, Progressives See Leverage to Target the Rich

6/9/24
from The Wall Street Journal,
6/7/24:

Democrats prepare for policy fights with Republicans with the 2017 tax law set to lapse next year.

Huge pieces of Republicans’ 2017 tax law are scheduled to lapse after next year, and Democrats see that deadline as a rare chance to reset fiscal policy and raise taxes on corporations and high-income households. Policymakers and analysts expect a yearlong fight and Christmas-season negotiations to prevent tax increases from hitting most Americans after Dec. 31, 2025, when the law’s cuts end. Lawmakers are starting to think through what leverage they have—and how and when to use it. “Tax policy will be front and center on the 2025 agenda because the system will undergo an earthquake even if Congress does nothing,” said Sen. Elizabeth Warren (D., Mass.). “We must have our own agenda and we will.” The shape of the 2025 tax fight hinges on the 2024 election results, with the House, Senate and White House all up for grabs this November. Divided control of the government could yield familiar brinkmanship on tax policy, like the frequent deadline-driven fights over the debt ceiling and government spending. If neither party has enough power to impose its will, a multitrillion-dollar stare-down could bleed into 2026.

Some progressives say no deal might be better than a bad one, at least temporarily, to force Republicans to split tax cuts for households making under $400,000 from those making more than that. “Democrats are in a position to isolate the fight on taxing the rich and corporations, an issue on which they have a really strong advantage,” said Bharat Ramamurti, a former Biden White House aide who recently met with congressional progressives about the coming tax debate. Progressives and Democrats should clearly lay out conditions, favoring an extension for most Americans but recognizing that the impact of expiration isn’t that large for many low-income households, said Michael Linden, a former Biden administration official. “I don’t think we should think of this as a cliff,” Linden said. “Democrats should feel very comfortable drawing a clear line that rich people’s taxes cannot go down.”

Republicans generally favor extending expiring tax cuts and see all of the 2017 law as a success that should continue. “If President Biden allows the Trump tax cuts to expire, he will be responsible for decimating middle America and small businesses with a mountain of new taxes,” Rep. Jason Smith (R., Mo.), chairman of the House Ways and Means Committee, said on social media Thursday. One challenge for Democrats in divided government would be separating tax cuts for the top sliver of households from the rest. “You just say no. You just say no,” to extending tax cuts at the top, said Rep. Pramila Jayapal (D., Wash.), who chairs the Congressional Progressive Caucus. “You have power and you have leverage and you make sure that that happens.” The effects of blowing past the tax-cut deadline would be significant—but more gradual and predictable than a debt-ceiling breach that could spark a financial crisis. Both sides might have incentives to stop tax-cut extension bills they oppose if they are confident they can win the political aftermath in January 2026.

Unless Congress acts, taxes would rise on about 62% of American households, according to the Tax Foundation, which favors lower rates and fewer deductions.

Republicans have been warning about the harms of full expiration, criticizing a Biden campaign tweet that said he favored letting the tax cuts lapse and highlighting the potential tax increases on middle-class families.

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