Economy

This has to be wrong.    So many on here claimed pretty vigorously that only the rich got a tax cut.  @JJ Husker what do you think.  @Dr. Strangelove any thoughts on how these tax rates will be going up?   You were pretty adamant it was just a tax cut for the rich.   Any if you others want to chime in?    

https://www.yahoo.com/finance/news/higher-tax-rates-smaller-child-130101990.html

“It’s going to be the Super Bowl of tax law changes in less than 18 months,” said Mark Steber, chief tax information officer at tax preparer Jackson Hewitt. Changes in deductions and credits will affect people differently, but Steber said everyone’s “tax rates will be higher. That’s inarguable.”


Why are tax rates going up in 2026?


TCJA, which was initiated by President Donald Trump, lowered tax rates across the board and shifted the thresholds for several income tax brackets. Some people saw a bigger reduction than others but pretty much everyone gained at least a little, tax experts said.

For example, a married couple whose total income minus deductions is $250,000 would have had a 33% tax rate in 2017, but only 24% in 2024. An individual making $39,000 in taxable income in 2017 would have had a top tax rate of 25% but just 12% in 2024. For those in the top tax bracket, the rate dropped to 37% from 39.6%.

 
Archy1221 said:
This has to be wrong.    So many on here claimed pretty vigorously that only the rich got a tax cut.  @JJ Husker what do you think.  @Dr. Strangelove any thoughts on how these tax rates will be going up?   You were pretty adamant it was just a tax cut for the rich.   Any if you others want to chime in?    

https://www.yahoo.com/finance/news/higher-tax-rates-smaller-child-130101990.html

“It’s going to be the Super Bowl of tax law changes in less than 18 months,” said Mark Steber, chief tax information officer at tax preparer Jackson Hewitt. Changes in deductions and credits will affect people differently, but Steber said everyone’s “tax rates will be higher. That’s inarguable.”


Why are tax rates going up in 2026?


TCJA, which was initiated by President Donald Trump, lowered tax rates across the board and shifted the thresholds for several income tax brackets. Some people saw a bigger reduction than others but pretty much everyone gained at least a little, tax experts said.

For example, a married couple whose total income minus deductions is $250,000 would have had a 33% tax rate in 2017, but only 24% in 2024. An individual making $39,000 in taxable income in 2017 would have had a top tax rate of 25% but just 12% in 2024. For those in the top tax bracket, the rate dropped to 37% from 39.6%.
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My thoughts.

Yes it was an across the board tax cut….that provided higher cuts for the ultra wealthy. If it expires, yes, everyone including myself will be paying more in taxes. However, JB and the dems had promised extending the cuts and not raising taxes on those making less than $400k.

There are two sides to the debt problem. Spending and revenue. Only one of these makes it impossible to get debt under control, revenue. I don’t like wasteful spending either but some spending is necessary, right? Giving high earners and the ultra wealthy unneeded tax cuts is the best way to perpetuate the problem. The rich need to be paying a higher rate and the government needs to quit spending like drunken sailors.

 
JJ Husker said:
My thoughts.

Yes it was an across the board tax cut….that provided higher cuts for the ultra wealthy. If it expires, yes, everyone including myself will be paying more in taxes. However, JB and the dems had promised extending the cuts and not raising taxes on those making less than $400k.

There are two sides to the debt problem. Spending and revenue. Only one of these makes it impossible to get debt under control, revenue. I don’t like wasteful spending either but some spending is necessary, right? Giving high earners and the ultra wealthy unneeded tax cuts is the best way to perpetuate the problem. The rich need to be paying a higher rate and the government needs to quit spending like drunken sailors.
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Yes, it's possible to do both.  Fact is, the Trump tax cuts were very ill timed.  The economy was going just fine and had been for most of Obama's era.  We needed to get the deficit under control and they added A LOT to the deficit.  Nobody had over bearing tax burdens.  Save them for when the economy really needs a boost.

But, the Republican mantra is that tax cuts are ALWAYS good and gubment bad.

 
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JJ Husker said:
However, JB and the dems had promised extending the cuts and not raising taxes on those making less than $400k.
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Thanks for the reply, however, JB promised to get rid of the Trump tax cut which INCLUDES tax cuts for those under $400k.  I don’t believe he or congress can let only a portion of it to expire.  
 

JJ Husker said:
Yes it was an across the board tax cut….that provided higher cuts for the ultra wealthy
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According to the article I linked to, the top marginal rate went down 2.6%.   Others got 9% and 12% reductions respectively.   What you are referring to I think is the cap gains tax rate probably which everyone can be a part of.   
The thing I don’t understand really is why the super wealthy aren’t caught up in the AMT if their rate is supposedly below 25%.  It’s kinda why that is even a thing in the first place.  
 

 
Archy1221 said:
This has to be wrong.    So many on here claimed pretty vigorously that only the rich got a tax cut.  @JJ Husker what do you think.  @Dr. Strangelove any thoughts on how these tax rates will be going up?   You were pretty adamant it was just a tax cut for the rich.   Any if you others want to chime in?    

https://www.yahoo.com/finance/news/higher-tax-rates-smaller-child-130101990.html

“It’s going to be the Super Bowl of tax law changes in less than 18 months,” said Mark Steber, chief tax information officer at tax preparer Jackson Hewitt. Changes in deductions and credits will affect people differently, but Steber said everyone’s “tax rates will be higher. That’s inarguable.”


Why are tax rates going up in 2026?


TCJA, which was initiated by President Donald Trump, lowered tax rates across the board and shifted the thresholds for several income tax brackets. Some people saw a bigger reduction than others but pretty much everyone gained at least a little, tax experts said.

For example, a married couple whose total income minus deductions is $250,000 would have had a 33% tax rate in 2017, but only 24% in 2024. An individual making $39,000 in taxable income in 2017 would have had a top tax rate of 25% but just 12% in 2024. For those in the top tax bracket, the rate dropped to 37% from 39.6%.
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First, let me say these are the kinds of discussions I wish I could have more of with you, Archy. Once Trumpism is done convulsing on the ground and lets go of it's last gasp, I hope conservatives go back to nominating candidates that advocate for traditional conservatism -- like the discussions above. 

Additionally, let me start off by saying I don't have a personal issues in paying taxes. If my taxes go up, I only care that it's going to causes that I believe in. I don't have a belief that all government spending is bad or wasteful. There are smart, impactful ways government can use it's immense spending power in ways that: 1) Benefit marginalized communities, often rural America which is otherwise prohibitively expensive to invest in. 2) Benefit the national security interests of the United States while simultaneously creating jobs. I personally believe that the Biden administration did an excellent job with points 1 and 2, and I hope that a Harris administration can continue building on those accomplishments which I can detail in a later post.

With that being said, the TCJA did primarily benefit the wealthiest Americans. While the raw percentages paid by the lowest tax filers was lower after TJCA passed, because of changes to itemized deductions, the standard deduction, and other changes... the real world impact on low income tax filers was modest. This is because the amount they paid in taxes prior to the TCJA was also quite low. Frankly, for 50% of American earners, they don't have much in taxes to cut so any law that attempts to lower their taxes has limited impact. 

Thus, any tax cut bill almost always benefits the wealthiest Americans by virtue of the fact that they pay most of the tax burden in the United States. The issue I have with the TJCA are things like: Gift and estate tax exemptions, which allowed ultra-wealthy Americans to pass their assets tax free by $27.22 million for married couples. There's no reason for this. There are other examples like this as well.

What we disagree on, Archy, is the fundamental role of Government when it comes to spending. I'm okay with increasing the tax burden on the wealthy, because Government can use that money to boost investment in areas that serve the national security interests of the United States - while simultaneously boosting growth. The CHIPS Act is a great example of this. Your view, of course, is that Government is an inefficient spender of monies and it's better off being in the hands of individuals who can invest it wisely. I don't disagree with this; what I disagree on is that private investments don't always serve the interests of the United States in ways that we need it to. 

 
Archy1221 said:
Thanks for the reply, however, JB promised to get rid of the Trump tax cut which INCLUDES tax cuts for those under $400k.  I don’t believe he or congress can let only a portion of it to expire.  
 

According to the article I linked to, the top marginal rate went down 2.6%.   Others got 9% and 12% reductions respectively.   What you are referring to I think is the cap gains tax rate probably which everyone can be a part of.   
The thing I don’t understand really is why the super wealthy aren’t caught up in the AMT if their rate is supposedly below 25%.  It’s kinda why that is even a thing in the first place.  
 
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To put it in real $ numbers.

2.6% of $1,000,000 is $26,000.

13% of $39,000 is $5,070.

So, two things.

1) IMO that $5k is a lot more valuable to the person making $39k than $26k is to the person making a Mil.

2) One of these has a much larger impact on the revenue needed to fund the government.

In my anecdotal business experience, not enough revenue is a much more serious problem than some (I said some) frivolous spending. I believe we should be increasing taxes on the top 5% to 10%, maintaining the cuts for those below $400k income AND reducing spending.

Of course there are a lot of different spending categories. The most significant difference between Ds and Rs is, Rs just don’t like social spending that benefits lower income folks. That is always where they want to start cutting. Howabout we start cherry picking the larger potential savings of military spending.  And IMO again, social security and medicare need to remain viable. There just aren’t that many places to cut once you accept that debt service is a function of prior spending and certain social programs can’t be touched without negatively impacting the least resilient members of society. That leaves raising taxes on those who can afford it and won’t notice and cutting spending that won’t hamstring the most vulnerable. 

 
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JJ Husker said:
So, two things.

1) IMO that $5k is a lot more valuable to the person making $39k than $26k is to the person making a Mil.

2) One of these has a much larger impact on the revenue needed to fund the government
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I agree on both accounts. 
 

JJ Husker said:
In my anecdotal business experience, not enough revenue is a much more serious problem than some (I said some) frivolous spending. I believe we should be increasing taxes on the top 5% to 10%, maintaining the cuts for those below $400k income AND reducing spending.
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I think in every business, not enough revenue is a bigger problem than some frivolous spending.  Though the kicker to that statement is what is “some” for each individual entity.   When does “some” become large enough to outweigh the limited loss in revenue?

We also need to consider how more revenue (not profit) is generated when the current amount is not enough.  Work more to bring in additional revenue, hire more to bring in more revenue, or automate.  The last two require additional monies which some can theoretically come from less tax exposure and using that for investment to further the revenue side.  
 

If people want me to be for tax increases, then show me where wasteful spending will be cut in a meaningful way (I understand that is subjective).  Otherwise what’s the point in bringing in more revenue when it gets wasted?  Show me spending cuts and I’ll change my mind on tax increases for the wealthy.   Just don’t increase my taxes :)  

JJ Husker said:
Of course there are a lot of different spending categories. The most significant difference between Ds and Rs is, Rs just don’t like social spending that benefits lower income folks. That is always where they want to start cutting. Howabout we start cherry picking the larger potential savings of military spending.  And IMO again, social security and medicare need to remain viable. There just aren’t that many places to cut once you accept that debt service is a function of prior spending and certain social programs can’t be touched without negatively impacting the least resilient members of society. That leaves raising taxes on those who can afford it and won’t notice and cutting spending that won’t hamstring the most vulnerable. 
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I believe military spending is a place where waste can be cut….Medicare is also a place where waste can be cut.  You wouldn’t believe what the government pays for when it comes to health benefits that are just money makers for Dr.’s and healthcare companies.   Patients agree to it because “well Medicare will pay for it” 

Some social programs do need cut or people cut off from them.   For someone who is otherwise healthy to be perpetually on Medicaid unemployment, and food stamps, etc…is quite crazy IMO and not what those programs were designed for.   It’s my opinion those programs are for those who need temporary assistance (0-15 months maybe) while they get back on their feet/find a new job, etc..

I think some-much of the “emergency” bailout spending is wasteful.   Companies take risks and enjoy the benefits and they need to be allowed to fail when those risks don’t work out.   Government needs to regulate and make sure there is no such thing as a company too big to fail.   If there happens to be one, then they need additional oversight by the government in order to operate as that type of business or get broken up.   

 
Archy1221 said:
I agree on both accounts. 
 

I think in every business, not enough revenue is a bigger problem than some frivolous spending.  Though the kicker to that statement is what is “some” for each individual entity.   When does “some” become large enough to outweigh the limited loss in revenue?

We also need to consider how more revenue (not profit) is generated when the current amount is not enough.  Work more to bring in additional revenue, hire more to bring in more revenue, or automate.  The last two require additional monies which some can theoretically come from less tax exposure and using that for investment to further the revenue side.  
 

If people want me to be for tax increases, then show me where wasteful spending will be cut in a meaningful way (I understand that is subjective).  Otherwise what’s the point in bringing in more revenue when it gets wasted?  Show me spending cuts and I’ll change my mind on tax increases for the wealthy.   Just don’t increase my taxes :)  

I believe military spending is a place where waste can be cut….Medicare is also a place where waste can be cut.  You wouldn’t believe what the government pays for when it comes to health benefits that are just money makers for Dr.’s and healthcare companies.   Patients agree to it because “well Medicare will pay for it” 

Some social programs do need cut or people cut off from them.   For someone who is otherwise healthy to be perpetually on Medicaid unemployment, and food stamps, etc…is quite crazy IMO and not what those programs were designed for.   It’s my opinion those programs are for those who need temporary assistance (0-15 months maybe) while they get back on their feet/find a new job, etc..

I think some-much of the “emergency” bailout spending is wasteful.   Companies take risks and enjoy the benefits and they need to be allowed to fail when those risks don’t work out.   Government needs to regulate and make sure there is no such thing as a company too big to fail.   If there happens to be one, then they need additional oversight by the government in order to operate as that type of business or get broken up.   
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I agree.

Like I said (and JB was saying forever) no tax increases for those making under $400k. I have always assumed that meant extending the current tax rates for those under $400k.  There’s room to grow revenue above that level though. Historically this country had higher rates on top earners and it coincided with better economic times for all.

But yeah, I’m not for increasing taxes only to spend more in areas that are already wasteful.

 
I found this interesting, not that the top was answered in the way it was but how little people mentioned some things at the bottom like child care costs.  or that taxes was mentioned more than college expenses/debt 
 


 
For all the GOP gloom and doom, whoever becomes President will be handed an economy on the uptick by Biden. 

article quoted in part below

https://dnyuz.com/2024/07/25/2025-could-be-a-great-time-to-be-president-economically-speaking/

The next couple of years are shaping up to be solid for the U.S. economy. Inflation is returning to normal. As that happens, the Federal Reserve is preparing to cut interest rates. A huge burst of infrastructure spending under the Biden administration has taken time to ramp up, but projects both small and large are likely to break ground in earnest in 2025 and 2026.

Things can always go wrong — the job market could cool more than expected, financial market problems could surface, and risks tied to the election in November could stoke uncertainty — but the base-case outlook is bright. The question now is who will get to take credit for it.

One clear answer: It won’t be the person who shepherded some of the policies that are laying the positive groundwork. President Biden announced on Sunday that he was ending his candidacy for re-election, passing the Democratic baton to Vice President Kamala Harris.

Mr. Biden isn’t entirely responsible for the sunny outlook. White House officials play a relatively minor role in slowing inflation and exert no direct control over interest rates. But big policy packages passed on his watch are helping to fuel a burst in green-energy, manufacturing and infrastructure investment that is expected to continue over the next several years. Expansions of dams and locks will be underway. Dozens of airport upgrades will be completed. Semiconductor factories will begin churning out chips.

It’s a reminder that big and potentially transformative public investments can take time — and multiple political cycles — to play out. It could also be an opportunity for the next resident of the White House to take a victory lap.

Former President Donald J. Trump is already hinting at an optimistic future on the campaign trail. The Republican platform, which he had a heavy hand in shaping, pledged to “destroy inflation” and vowed that interest rates would be lower while declaring that the Republican Party will be one of infrastructure and manufacturing. If economists’ most likely projections come true, those promises should be well within reach.

“It’s a good base-line outlook,” said Julia Coronado, the president and founder of MacroPolicy Perspectives, a research firm.

Most economists agree that inflation is likely to remain cooler over the coming years.
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