Does anyone remember the last time the government paid all it’s bills and had money left over? Stay tuned….
What should we do about taxes? Well, I’d start with the immediate repeal of the “Tax Cuts And Jobs Act”, passed in 2017 by the Republican Congress and signed into law by President Trump, which, even back then, they knew that it would return us to Trillion Dollar Deficits (like the ones Bush left for Obama).
This was bad from the get-go as all the enormous corporate tax breaks are permanent while the minuscule individual cuts are temporary. Don’t believe me? It’s right here. Add to that the fact that people now have to pay taxes on their other taxes. How? SALT limits. This was directly targeted at ‘blue’ states that typically have higher rates on “State And Local Taxes” (like state income, property, sales, etc) and on the alimony that they paid to an ex-spouse. This caught me. Because I live in a state with no state income tax, it has high property taxes. Explain to me why a business is allowed to deduct more than $10,000 in property (and other) taxes, but not me… Because I work in a state that DOES have an income tax, I have to pay that tax (at a higher non-resident rate) as well. Combined, they’re over $10,000 so I end up paying taxes on my taxes. This kills any benefit I had from lower tax rates. About the only positive I can find in this is that I’m unlikely to be audited because this law made it so that, for the first time since 1985, I didn’t have enough deductions to itemize and took the ‘standard deduction’.
So, in this proposal, not only will these bogus cut be reversed, but tax rates will be restored to what they were in the 1990s when (remember when I said to ‘stay tuned’?) we were actually running a governmental SURPLUS. If not for the policies under George W. Bush (tax cuts, wars, Farm Bill, Prescription Drug Bill), they were predicting, in 2001, an elimination of the entire Federal Debt by 2010.
Don’t believe for a minute when conservatives tell you that high marginal tax rates will chase companies away. The same people who want to bring America back to some idyllic 1950s setting conveniently forget that the top tax rate in the 1950s was 91% and that being in the “top 1%” was a lot different back then than it is now. I mean – back then (until 1982 and Reagan) – stock buybacks were ILLEGAL and there’s good reason to make them illegal again!
And, finally, who’s really carrying the freight when it comes to taxes?
In the 1950s, corporations paid 49% of all Federal tax receipts.. By 2003, that was down to 7.4%
In 1960, the top 1% of households earned 9% of all income, and paid 13% of all taxes. To be in that top 1%, back then, you had to earn $24,435 or $244,606 today. To be in the 91% bracket, you had to earn $200,000 or just over $2 million today (double for married filers).
Today, the top 1% earns 21% of all income and pays 24% of the tax receipts – but that’s income and doesn’t reflect stock/wealth appreciation (which, if you hold it for over a year is taxed at the lower capital gains rate). To be in the top 1% now, you have to be earning just under $600,000/year.
So since “the good old days”, the top 1% ‘threshold’ has gotten more exclusive (fewer people, relatively speaking, making more money) and instead of there being a 31% gap between the percentage of income they got and the percentage of taxes they paid – that gap is now 12.5% (again, not being able to count things like stock compensation). …and let’s not forget that, for 2022, after you earn $147,000 you’re not paying Social Security taxes, either.
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