| The hard part today.. is that a viable policy must be both economically viable As well as politically sustainable.
The last few elections have swerved from.. cut taxes (Trump, Bush) to.. more government spending (Biden, Obama.. etc )
With a $2 Trillion deficit and a bond market ignoring the Fed.. growing more concerned about the amount of debt being financed. Are we crossing the rubicon of no return?
Trump is jiving a Tax increase in the form of Tariffs.. “External Revenue” while pitching tax relief to grow the economy.
Sounds good.
It wont Work.
Politically too few will see tax relief.. but will see the tariff impacts. So at the next election they will vote to undo what Trump has started.
I’m skeptical that the Tariffs will generate much to close the current deficit.. Tax cuts will by themselves goose the economy.. but will they pay for themselves.. remain in effect long enough?
Will we close the deficit before the bond market spirals out of control.. ?? assuming.. we haven’t already passed that point. Gulp.
No EASY options remain.. it’s either Pain.. or more Pain.. including the fact that doing nothing drives us over the fiscal cliff.
Cheers.
https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2025/
New Internal Revenue Service data for tax year 2022 shows the US federal income tax system continues to be progressive as high-income taxpayers pay the highest average income tax rates. Average tax rates for all income groups remained lower in 2022, five years after the Tax Cuts and Jobs Act (TCJA), than they were in 2017 prior to the reform.
- In 2022, taxpayers filed 153.8 million tax returns, reported earning nearly $14.8 trillion in adjusted gross income(AGI), and paid $2.1 trillion in individual income taxes.
- The average income tax rate in 2022 was 14.5 percent. The top 1 percent of taxpayers paid a 23.1 percent average rate, six times higher than the 3.7 percent average rate paid by the bottom half of taxpayers.
- The top 1 percent’s income share fell from 26.3 percent in 2021 to 22.4 percent in 2022, and its share of federal income taxes paid fell from 45.8 percent to 40.4 percent.
- The top 50 percent of all taxpayers paid 97 percent of all federal individual income taxes, while the bottom 50 percent paid the remaining 3 percent.
Good luck to us all.
Edited by JonSCKs 5/4/2025 09:07
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And another thing.. Trumps tax cuts 49% benefit the top 5% of earners
