“The solution to the national debt lies in reevaluating and cutting back on unnecessary and wasteful programs, reforming entitlement programs such as Social Security and Medicare, and implementing a more efficient tax system that encourages economic growth.
But none of this can even begin to happen until politicians perceive a demand for it from the American people. Rising debt reduces investment and can slow economic growth, while increasing worries about inflation and the strength of the U.S. dollar. It reduces confidence in the social safety net and increases the risk of a fiscal crisis. Perhaps when these problems manifest, the voters will demand that politicians take the issue seriously. But by then, it may well be too late for the economic stability and growth we have taken for granted.”
“For decades, New York City has been trying to enact an ambitious experiment to reduce traffic and pollution on some of the most congested roads in the world by charging cars a fee to drive in parts of Manhattan and using the revenue to better fund public transportation.
It’s known as congestion pricing, and after many hard-fought political and legal battles, lawmakers and transit officials had finally agreed on a plan that was set to launch later this month. Mere weeks before the new fees would go into effect, however, New York Gov. Kathy Hochul postponed the implementation of the plan indefinitely, citing economic concerns.
Supporters of the long-planned, much-discussed effort are fuming. The plan’s ultimate goals were to get cars off the road, reduce carbon emissions, and improve public transit, including the New York subway and regional rail. Congestion pricing would have, in other words, made the city safer, cleaner, and easier to get around for the people who live there.
“The really frustrating thing about this is that Trump is fundamentally wrong about how tariffs work. He has been for a long time. Taxes on Americans are not going to change China’s behavior. That’s not theoretical. We have six years of real evidence. Tariffs are not saving American manufacturing. The trade deficit didn’t fall like Trump promised it would. China didn’t buy the larger share of American imports that were part of Trump’s supposed “phase one” deal. In the middle of Thursday’s debate, Trump even managed to confuse the trade deficit with the federal budget deficit (a mistake he’s been making for years).
If only Biden were in a position to highlight Trump’s clearly misguided views on trade and tariffs. But that would have required different choices over the past three-plus years (and a stronger debate performance from the president, who struggled at times on Thursday to be articulate).
Biden chose this outcome, and now we’re left with a choice between a candidate who doesn’t understand the fundamentals of trade policy and one who has foolishly gone along with that fantasy for political gain.”
“In a recent paper titled “Industrial Headwinds: Reducing the Burden of Regulations on U.S. Manufacturers,” published in the May 2024 Club for Growth Policy Handbook, economist Daniel Ikenson writes, “For manufacturing firms, the cost of federal regulations in 2022 was roughly $350 billion, or 13.5% of the sector’s GDP—a burden 26% greater than the inflation-adjusted cost of regulatory compliance in 2012.”
He adds that while the average U.S. company pays a regulatory compliance price of $13,000 per employee, large manufacturers shoulder a cost more than twice as much—$29,100. However, even some small-sized manufacturers face annual compliance costs of $50,100 per employee. This helps explain why manufacturing automation is so popular and why our fastest-growing companies are in service-sector tech, not manufacturing.”
“A set of new tariffs proposed by former President Donald Trump would cost the average American family an estimated $1,700 annually—and lower-income households would be hit relatively harder, a new analysis warns.
Trump has called for a 10 percent across-the-board tariff on all imports combined with higher tariffs (potentially as high as 60 percent, he’s claimed) aimed specifically at imports from China. Together, those two policies would cost Americans about $500 billion per year, according to the Peterson Institute for International Economics (PIIE), a trade-focused think tank.”
“Do you want to pay less taxes? Great. Step one, be a rich person. Then, buy a yacht. Or a sports team. Give a lot to charity. Lose some money in the stock market. Above all, make sure most of your money exists in the form of assets, not cash — stocks, real estate, a Dutch master painting, fine jewelry, or whatever else strikes your fancy.
They say that money is a universal language, but it speaks at different volumes. When you have a fathomless bounty of wealth, money doesn’t quite register as an expense until you add a lot of zeros to the end — so spending a lot to save a lot is a no brainer. It’s why the mega-rich often hire expensive tax lawyers, wealth managers, or even set up a whole office dedicated to tax strategy. “It’s not just preparing the return,” says Paul Wieseneck, a tax accountant and director of the Fuoco Group. “There’s so much more involved in planning, in accumulating, offsetting, and trying to mitigate the taxes as best as possible.””
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“Jeff Bezos, when he was still Amazon CEO, had a base salary of around $80,000 a year. Elon Musk doesn’t take a salary at all at Tesla. Apple CEO Tim Cook does get a $3 million salary, but it’s a small slice of the $63 million he received overall last year. Most wealthy entrepreneurs are paid in bountiful stock rewards; Musk is currently fighting to keep his record-breaking Tesla pay package, made up of a bunch of stock options and now valued at almost $56 billion. ProPublica found that, because their income fell below the threshold, at least 18 billionaires got a Covid-19 stimulus check.
Paul Kiel, a ProPublica reporter who was an integral part of the newsroom’s billionaire tax return stories, says the income versus wealth divide was crucial in helping the public understand how differently the wealthy operate. “If you can avoid income as it’s defined in our system, and still get richer, that’s the best route,” he tells Vox.
Stocks aren’t taxed until they’re sold — and even then, what’s taxed is the profit on the sale, called a capital gains tax. Billionaires (usually) don’t sell valuable stock. So how do they afford the daily expenses of life, whether it’s a new pleasure boat or a social media company? They borrow against their stock. This revolving door of credit allows them to buy what they want without incurring a capital gains tax. Though the “buy, borrow, die” strategy isn’t quite as sweet right now because interest rates are high, a Wall Street Journal piece from 2021 notes that those with $100 million or more could get interest rates as low as 0.87 percent at Merrill Lynch. The taxable value of a stock also resets when it’s passed on to an heir, so that if a wealthy scion chooses to sell their inherited stock, they’d only pay a tax on the increase in value since the original owner’s death.”
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““We’ve talked to a lot of former IRS agents, and they would often hear the line that for wealthy taxpayers, their tax return is like an opening offer,” says Kiel.”
“About one in every five dollars that passes through the federal welfare system ends up right back where it started, according to a new report.
It’s not robbing Peter to pay Paul. It’s more like “robbing Peter to pay Peter,” wrote the report’s author, Judge Glock, director of research at the Manhattan Institute.
As the federal welfare state has grown to a point where many middle-class and even some upper-income households receive benefits, it has become more common for the same households to both pay federal taxes and collect federal transfer payments. Glock’s paper shows how significant that overlap is: About 20 percent of the annual funds in the federal welfare system are simply returned to households that paid that amount in federal taxes.”
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“Dollars returned in the form of welfare transfers are often restricted—food stamps can only be used for certain purchases, for example—in ways that dollars never taxed away from someone’s paycheck aren’t. Or the funds might only be available at certain times of the year, as is the case with welfare delivered via refundable tax credits. There’s also the cost of cycling that money through the system: paying for the IRS to collect it and various bureaucrats in other places to oversee its return.”