I heard that Trump wants to eliminate federal income tax for anyone earning less than $150,000. Now isn’t that remarkable. I can’t pretend that I know how that would impact the federal budget and debt but I’m pretty sure it will make him, at least in the short run, the most popular president in the last two hundred years.
I think this will raise several questions. Will this force state income taxes to triple? How will this impact the income taxes of people earning $150,000 to $300,000? Will my social security and healthcare benefits be paid to me in monopoly money?
But all kidding aside, I know that Trump is considering many radical changes to the tax code. A while ago I heard he was thinking about replacing income taxes with a federal sales tax increase. Is this part of the same plan? Between these ideas and the tariff stuff and the DOGE initiative to cut back the size and cost of the federal government we seem to be looking at a re-invention of government. Or maybe it would be fair to call it a recalibration. We all know the cost of government is out of whack and that we can’t possibly sustain the service on the debt indefinitely. As it is now it’s something like $600 billion. That’s insane. What it means is that what Trump is doing isn’t revolutionary madness to the body politic. He’s applying a tourniquet before the patient bleeds out.
But there’s no guarantee all of this will succeed. The American voters are fickle and they have no patience. Unless Trump gets most of his program in place in the next year, the mid-terms will be upon him and he will lose the ability to get legislation through Congress. So, he’s threading a needle.
But these are exciting times. People have awakened from a decades-long-dream to find their government is a malignant force that threatens their lives and livelihood. And their only hope is a crazy man like Donald Trump. Well, at least it’s not boring. It’s more like a three-ring circus. We’ve got wars and tariffs in the first ring. We’ve got DOGE and the Swamp in the second ring. And in the third ring we have crime and the illegal aliens. And Trump is the circus master in the top hat, tails, boots and whip trying to keep the whole circus moving at top speed like an infernal calliope-carousel steam engine. And hoping that the whole thing doesn’t fly apart in all directions.
I will say I am guardedly hopeful. Just seeing how much can be done when an energetic and fearless approach is taken, provides encouragement that I can’t remember feeling since Ronald Reagan told us in 1981 that the Carter malaise was over and it was morning in America again. So maybe it will fail and the whole thing will fall apart and the bad guys will be back in power afterward.
But what have I got to lose by rooting for Team Trump? Can I be any more blacklisted than I already have been? Will it matter if they tax me any higher if the money is already becoming worthless? Can they possibly know any more of my words, deeds or thoughts than they already do?
No! I have nothing to lose by betting on Trump. Go for it, Donald. Give it your best shot.
I don’t think the nature of the taxation is THE problem. A problem certainly, because some forms are more onerous than others. The REAL problem is the magnitude of the “needed” taxation to feed government that, on all levels, is approaching 50% of GDP and shows few signs of abating.
Frankly, I think taxation should be as onerous as possible and then some and spread out to cover the entirety of the population to cause the widespread pain and anger needed to force changes. For that reason, I don’t like the proposal.
Everybody should have skin in the game.
Regardless of its efficacy in solving budget problems or its fairness, I think eliminating taxes on the working and middle classes will be wildly popular. I think that’s why he’s doing it. He will tick off the people making $200,000 a year but he’s trying to make a point. The working classes have been taking it on the chin for fifty years and so he’s making a gesture in their direction.
What I think will be of greater economic importance is reducing the federal payroll and onshoring manufacturing jobs in this country.
I’m within a month of writing a 5 figure check to the IRS, so believe me that I’m in favor of reduced taxation. Not taxing SS would be a good start for me. Thank the lord that military disability isn’t taxed too. Most of my tax burden isn’t for income, and I suspect that people like me would be the target in a post income tax world. Problem being that if you detax (to coin a word) the great portion of the US population, they will cease to care. And they jolly well need to care if this nation is… Read more »
I appreciate your logic and sympathize with your check writing. I had a mid-four-figure check to the IRS this year. I think the way out of our mess is shrinking government radically. And that will not be without pain. Everyone has a favorite government program. But this government needs to be severely pruned. And the military is going to have to be a big part of that. No more hundred billion dollar fighter aircraft projects. No more ten billion dollar aircraft carriers that will be sunk by a swarm of $300 drones.
For me, writing 5 figure checks to the IRS hasn’t happened often or at all in the years I’ve been (semi) retired. But earlier this year, I asked my FA to reposition some of my investments to lessen volatility and that resulted in a lump of capital gains, but I knew that going in. It was done earlier in 2024 when it looked a good possibility of the Dims retaining power and jacking capital gains taxes into the stratosphere. My career was done in a setting that, other than SS and some military disability, I don’t have a pension. And… Read more »
My sin was not anticipating some extra income and adjusting withholdings to cover it. I even had to pay them penalties which is kind of galling. Well at least there is still a roof over our heads.