A Taxing Situation

I came across an article about this back on October 31 last year, just before the election, and held on to it until now.  While it was important, there were so many other election-related stories and then election challenge stories and then insurrection stories that it wasn't necessary to write about that the time, no matter how important the news item.  But we're a bit past all that now, and I figured that once Dr. Seuss and Mr. Potato Head have become topics of interest to Republicans, then we've hit a lull and can bring the matter up.

It stems from an article in the New York Times by Nobel Prize-winning economist Joseph Stiglitz who warned that taxes for many Americans were about to go up.  And the thing is, it wasn't because of any of Joe Biden's economic plans on taxation, nor was it related at all to his plans for what would eventually be needed to fight COVID-19 -- and of course it wasn't related to this current emergency relief bill, since the article was from four months ago.  In fact, it had absolutely nothing to do with Joe Biden and Democrats, period.  It was because of a provision largely buried in the infamous Tax Cuts and Jobs Act of 2017 that cost about $2.2 trillion and seemed to be a tax cut for Americans, but really just cut taxes mostly for the very wealthy.  Stiglitz says that many low and middle income people will end up paying pay more than they had been before Republicans passed the bill.

He writes --

"President Trump and his congressional allies hoodwinked us. The law they passed initially lowered taxes for most Americans, but it built in automatic, stepped tax increases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019.

"For most, in fact, it’s a delayed tax increase dressed up as a tax cut," wrote Stiglitz. "How many times have you heard Trump and his allies mention that? They surmised — correctly, so far — that if they waited to add the tax increases until after the 2020 election, few of the people most affected were likely to remember who was responsible."​

In his article, Sliglitz goes into specific details.  He notes that the Congressional Budget Office has estimated that people with an income between $20,000 to $30,000 next year -- the people most in need of actually having a tax cut -- would owe an extra $365 next year.  (I'm not exactly sure when "next year" would kick in.  This was written in 2020, but I don't know if he meant next year's income, or next year's tax filing.  I think the latter.  He also notes that these increases will not all hit immediately, but the provisions will roll in slowly, and be fully enacted in 2027 when "the stealth tax increases" (his words) are completed. 

As Stiglitz puts it, "the country will be neatly divided into two groups: Those making over $100,000 will on average get a tax cut. Those earning under $100,000 — an income bracket encompassing three-quarters of taxpayers — will not."

Trump and the Republicans, the gift that keeps on giving.  And they like to try to position themselves as the supposed party of blue collar Americans.  Never were, never will be.  Enough of them just got suckered into falling for Trump's flim-flam.

You can read the full article here.