Trump Proposes Eliminating Income Taxes For People Earning Less Than $150k/year.

[JohnfrmClevelan]

No, I have long understood the mindless zealotry of Orange Man Bad.

It's not so much "Orange Man Bad," which is a subjective thing. It's really more "Orange Man Full of Sh!t," which is an objective fact.

If you believe it when trump claims to have attracted trillions in new investment after putting up those crazy tariffs, may I be the first to congratulate you on waking up from your ten-year coma.

 

[Econ4every1]

(I think the banks refer to these as "fractional" reserves)

A fractional reserve is a term that describes the fact that banks do not need to hold reserves equal to the amount of money a bank lends. Banks also don't need to hold reserves equal to the amount of a days transactions because banks settle at the end of the day and only the differences between banks need to be settled, something done at the Federal Reserve.

The Federal Reserve system is a LIE. - - a SCAM against the American people created by oligarchs in the dead of night while everyone was asleep. It was signed into Law by America's first socialist president - Woodrow Wilson - in 1913.

And the moon landings were fake, JFK was killed by the CIA, fluoride in water is part of some nefarious plan to do god knows what....

This claim, straight out of Griffin's book, is pure tinfoil hattery.

Many people believe that money can be created at will and redistributed at will without any ill effects to the economy. These people are not only ignorant, they are dangerous.

Agreed, let me know who you think those people are, we can double-team them....

Oh, you meant me....I don't think that, because spending is one one side and productivity is on the other. Making decisions about spending without understanding other variables is like diving a car with your eyes closed, and we can agree that's crazy!

but all fiat currencies die at some point.

This claim is offered as some profound insight. It's not. It's no more insightful than pointing out that throughout history more nations have failed under some type of gold standard than under fiat.

Can you figure out why that's not as profound as it sounds? Now take that same skepticism and apply it to the statment you made.

All nations fail eventually and so does their system of money, but the failure of the system of money isn't what precipitates the failure, it's usually bad policy, war, corruption that precipitates the failure and money follows.

 

[SkyChief]

Billionaires came up with libertarianism.

Not true. None of the Founders of classic liberalism ( John Locke, Adam Smith, and Gustave de Molinari) were billionaires. John Locke was a physician, but physicians weren't exceptionally wealthy in the 17th century. Tulip traders were, however. Smith wrote 'The Wealth Of Nations', however he was not exceptionally wealthy himself.

Which sounded great to me until I got to the laissez faire part.

Economic freedom / Free Market / precious metal-backed currency are concepts that can be difficult for many to embrace. Many people feel a lot safer having the Government controlling the production and distribution of goods and services (which is essentially socialism). And many people cannot realize why a fiat currency empowers the government to over-print and over-inflate the currency - to the point where it becomes essentially worthless.

That single term [libertarianism] was what all the stuff aimed at stoners was created to provide cover for.

LOL

A fractional reserve is a term that describes the fact that banks do not need to hold reserves equal to the amount of money a bank lends.

Thanks.

This claim is offered as some profound insight. It's not. It's no more insightful than pointing out that throughout history more nations have failed under some type of gold standard than under fiat.

But it IS profound insight. The U.S. Dollar was the dominant World Reserve Currency during the Bretton Woods era (T Bonds were backed by gold bullion stored in vaults). In 1971, Nixon drove a stake through the heart of Bretton Woods, and the insane currency-Printing bonanza began. Naturally Inflation went UP, and the purchasing power of the Dollar went DOWN. Naturally - to expect anything different is pure stupidity.

This ALWAYS happens when government is empowered to print more currency than it has in reserves. Someone once said that the definition of insanity is "doing the same thing over and over again and expecting a different result". If the government has power to print and borrow as much as they want, then they WILL do exactly that - because they are not accountable for making stupid decisions.

Lots of people think that the big spenders in government (Congress) are really smart. I used to think that too when I was very young. However in my old age, I've come to realize that ~ half of the Big Spenders are clueless. Even the ex-Chairman of the Fed - Janet Yellen - disturbingly clueless about fundamental economic theory that bad money will always drive out good money.

Can you figure out why that's not as profound as it sounds?

It's profound.

 

[CaughtInThe]

One of the funniest things in life is tricking toddlers (or kids a little older).

You know, things like basic magic tricks or telling them that a dog is a cat instead of a dog or any of that stupid stuff. It's a hilarious and the kids end up laughing. Sometimes hysterically. It's heartwarming.

Watching adults get tricked so easily is not funny at all.

 

[JohnfrmClevelan]

But it IS profound insight. The U.S. Dollar was the dominant World Reserve Currency during the Bretton Woods era (T Bonds were backed by gold bullion stored in vaults). In 1971, Nixon drove a stake through the heart of Bretton Woods, and the insane currency-Printing bonanza began. Naturally Inflation went UP, and the purchasing power of the Dollar went DOWN. Naturally - to expect anything different is pure stupidity.

A couple of mistakes here... treasuries were never backed by gold. The only things backed by gold were Fed liabilities - reserves and cash. The whole reason we needed to issue treasuries is so the government didn't overextend its gold obligations; when they wanted to deficit spend, they needed to borrow back some of those gold-backed reserves. Under a gold standard, even though it was a self-imposed limitation, there was some risk that the govt. couldn't come up with the gold, and interest rates on treasuries reflected that risk.

Problems with the gold standard - gold was what countries settled up with (at least theoretically), so if you ran a trade deficit, you lost some gold. Which means you had less gold-backed currency available. You can imagine the problems this would cause over time.

This ALWAYS happens when government is empowered to print more currency than it has in reserves. Someone once said that the definition of insanity is "doing the same thing over and over again and expecting a different result". If the government has power to print and borrow as much as they want, then they WILL do exactly that - because they are not accountable for making stupid decisions.

Lots of people think that the big spenders in government (Congress) are really smart. I used to think that too when I was very young. However in my old age, I've come to realize that ~ half of the Big Spenders are clueless. Even the ex-Chairman of the Fed - Janet Yellen - disturbingly clueless about fundamental economic theory that bad money will always drive out good money.


It's profound.

I think we could really use a thread on the basics of money, just to get everyone on the same page.

 

[Econ4every1]

Orange Man Bad.

I left off the "mindless" and "zealotry" because those are adjectives that aren't necessary to draw a a conclusion, but yes, he is bad. The real question is, are the people that mindlessly defend him no matter how much bad he does, no matter how depraved, cruel, unethical, illegal or immoral his actions, people follow, are they bad?

 

[Econ4every1]

The U.S. Dollar was the dominant World Reserve Currency during the Bretton Woods era (T Bonds were backed by gold bullion stored in vaults). In 1971, Nixon drove a stake through the heart of Bretton Woods, and the insane currency-Printing bonanza began. Naturally Inflation went UP, and the purchasing power of the Dollar went DOWN. Naturally - to expect anything different is pure stupidity.

Your summary captures part of the story, but it misses much of how modern fiat money really works. Here’s a more nuanced take:

1. From Gold‐Backed to Fiat:

• Under Bretton Woods (1944–1971), foreign central banks could indeed swap U.S. dollars for gold at a fixed rate ($35 / oz).
• When Nixon “closed the gold window” in 1971, the dollar officially became pure fiat—no longer convertible to any commodity.
• Crucially, the end of gold convertibility didn’t by itself force runaway inflation. Rather, it removed a mechanical cap on the monetary base (currency + bank reserves), giving the Fed more policy flexibility.

2. “Printing” vs. Credit Creation:

• People often conflate the Fed’s expansion of bank reserves (“printing”) with broad money growth (M2, M3). In reality, over 90% of the money supply is bank-created credit: when banks make loans, they create deposits out of thin air.
• The Fed controls reserves and short-term interest rates, though not directly, that's really aggregate credit decisions of private banks. In fact, the Fed can only induce banks to lend by setting the price of reserves (i.e. the federal funds rate) and by adjusting bank capital requirements.

3. Inflation Isn’t Just “Too Many Dollars”:

• Inflation measures the rate at which the average price level rises. While excess money growth can fuel it, other factors matter even more:
  • Supply shocks (e.g. oil crises in the 1970s, pandemic-era supply-chain disruptions).
  • Labor market tightness and wage dynamics.
  • Globalization (which has historically kept prices down by shifting production to low-cost factories abroad).
  • Anchored expectations—if businesses and consumers expect 2% inflation, they plan accordingly.
• Indeed, in the decades before 1971, U.S. inflation was already edging up (from 1–2% in the 1950s to 5–6% by 1969), driven by Vietnam-era fiscal deficits, wage-price spirals, and commodity shocks.

4. The Fed’s Toolbox Today:

• Since the Global Financial Crisis (2008) and again during COVID, the Fed’s balance sheet swelled via quantitative easing (QE)—buying Treasuries and mortgages to push down long-term rates. That did “create” reserves, but broad inflation stayed subdued until 2021.
• In 2021–22, a mix of pent-up demand, pandemic supply bottlenecks, fiscal stimulus, and energy price spikes pushed inflation above 6%. The Fed responded by hiking its policy rate rapidly.

5. Why the Dollar Remains King:

• Despite leaving gold, the dollar today is the world’s primary reserve and transaction currency, thanks to:
  • Deep, liquid Treasury markets.
  • U.S. financial rule of law and legal certainty (at least for now).
  • Network effects: everyone already prices oil, metals, and commodities in dollars.

6. Thinking in Stock vs. Flow Terms:

• Stock: The Fed’s balance sheet is the stock of reserves. It hit roughly $9 trillion after COVID QE and now sits around $7 trillion as securities roll off.
• Flow: The money that actually circulates (bank deposits, cash) is far larger—over $20 trillion in M2. Changes in reserves enable but do not directly equate to changes in M2.

 

[What if...?]

Not true. None of the Founders of classic liberalism ( John Locke, Adam Smith, and Gustave de Molinari) were billionaires. John Locke was a physician, but physicians weren't exceptionally wealthy in the 17th century. Tulip traders were, however. Smith wrote 'The Wealth Of Nations', however he was not exceptionally wealthy himself.

Economic freedom / Free Market / precious metal-backed currency are concepts that can be difficult for many to embrace. Many people feel a lot safer having the Government controlling the production and distribution of goods and services (which is essentially socialism). And many people cannot realize why a fiat currency empowers the government to over-print and over-inflate the currency - to the point where it becomes essentially worthless.

LOL

Thanks.

But it IS profound insight. The U.S. Dollar was the dominant World Reserve Currency during the Bretton Woods era (T Bonds were backed by gold bullion stored in vaults). In 1971, Nixon drove a stake through the heart of Bretton Woods, and the insane currency-Printing bonanza began. Naturally Inflation went UP, and the purchasing power of the Dollar went DOWN. Naturally - to expect anything different is pure stupidity.

This ALWAYS happens when government is empowered to print more currency than it has in reserves. Someone once said that the definition of insanity is "doing the same thing over and over again and expecting a different result". If the government has power to print and borrow as much as they want, then they WILL do exactly that - because they are not accountable for making stupid decisions.

Lots of people think that the big spenders in government (Congress) are really smart. I used to think that too when I was very young. However in my old age, I've come to realize that ~ half of the Big Spenders are clueless. Even the ex-Chairman of the Fed - Janet Yellen - disturbingly clueless about fundamental economic theory that bad money will always drive out good money.


It's profound.

I was talking about the Koch brothers. It was their info where I balked at the laissez faire aspect. Might could work if we started over from scratch.

But if billionaires exist and they do what they always do, they will just continue the “who can be the richest most powerful person in the world” game.

Which is basically what the race has been doing since shortly after we locked up the food. Which created wage labor, the manager class and the rigid hierarchies we still see today and the professional soldier/guard that required.

 

[stealthycat]

Don't pay it down at all. That "debt" is held by the private sector as savings. Those govt. liabilities do NOT need to be extinguished.

that's what I'm saying, run it to $100 trillion by eliminating incomes taxes

why not ?

 

[Kushinator]

I think we could really use a thread on the basics of money, just to get everyone on the same page.

It doesn't really matter. Facts that are politically inconvenient have become disregarded as a conspiracy by the opposition, and then eventually become a rallying cry. Then they are used as a political scarlet letter... anyone who believes Fort Knox has gold is a mindless drone of the illuminati. Anyone who believes the government's economic data is legit is a brainwashed liberal. Anyone who thinks COVID wasn't created by the Chinese to get rid of Trump is being controlled by nano-implants via Pfizer's MRNA vaccine.

You can't educate people who are willfully ignorant.

 

[Kushinator]

that's what I'm saying, run it to $100 trillion by eliminating incomes taxes

It will eventually become $100 trillion. Back in 1946, the idea that we'd have a $30 trillion economy was considered science fiction. FWIW, GDP was less than $220 billion in 1946.

When you say stuff like what you posted above, you can't be taken seriously, and have absolutely no business discussing this topic.

 

[JohnfrmClevelan]

that's what I'm saying, run it to $100 trillion by eliminating incomes taxes

why not ?

Because the extra demand would swamp the domestic economy's ability to meet demand.

There are good reasons to levy taxes - creating fiscal space into which the government can spend is one of them. There are also logical reasons (savings) why we run deficits and continue to grow our national debt. The problem that is much more difficult to solve is the structure that shunts way too much income to the rich and leads to our large deficits and debt.

The reason many of us liberals want to lower taxes on the poor is because they spend all, or almost all, of their income. That means they are not a drain on the economy, they are the engine. And even without income taxes under $150K they still pay more tax than what is best for the economy. FICA taxes start with the first dollar earned. If you are a free agent, double that tax to, what, 15-16% of your income? Sales taxes and tariff taxes on consumption fall on the lower end harder. The notion that the poor aren't paying any taxes, or enough tax, is criminally incorrect.

All of these regressive taxes hurt the economy because they remove demand from the income-consumption-production cycle. But tax the rich, and consumption is hardly affected.

 

[P_T]

3 years from now we will feel screwed again.

 

[aociswundumho]

The reason many of us liberals want to lower taxes on the poor is because they spend all, or almost all, of their income. That means they are not a drain on the economy, they are the engine. And even without income taxes under $150K they still pay more tax than what is best for the economy. FICA taxes start with the first dollar earned. If you are a free agent, double that tax to, what, 15-16% of your income? Sales taxes and tariff taxes on consumption fall on the lower end harder. The notion that the poor aren't paying any taxes, or enough tax, is criminally incorrect.

For workers too, not just the self-employed. Since they are regressive, do you support eliminating payroll taxes?

 

[aociswundumho]

Because the extra demand would swamp the domestic economy's ability to meet demand.

Nonsense. It would increase disposable income which could raise demand, but "swamp" is an extreme exaggeration. High earners save a lot. Plus more demand would be met with more production, that's how markets work.

 

[JohnfrmClevelan]

For workers too, not just the self-employed. Since they are regressive, do you support eliminating payroll taxes?

I do, with the caveat that eliminating FICA taxes would make SS politically vulnerable.

 

[JohnfrmClevelan]

Nonsense. It would increase disposable income which could raise demand, but "swamp" is an extreme exaggeration. High earners save a lot. Plus more demand would be met with more production, that's how markets work.

The post I was answering suggested a $100 trillion national debt (with no timeline) and eliminating income taxes completely. Some tax is necessary to keep demand at a level the economy can meet.

 

[stealthycat]

It will eventually become $100 trillion. Back in 1946, the idea that we'd have a $30 trillion economy was considered science fiction. FWIW, GDP was less than $220 billion in 1946.

When you say stuff like what you posted above, you can't be taken seriously, and have absolutely no business discussing this topic.

no country in the world has the debt we do - nowhere even close and while its true everything goes up ..... adding 1.5-2 trillion a year in debt is unsustainable

eventually we'll default and that will be global chaos don't ya think ?

 

[stealthycat]

Because the extra demand would swamp the domestic economy's ability to meet demand.

There are good reasons to levy taxes - creating fiscal space into which the government can spend is one of them. There are also logical reasons (savings) why we run deficits and continue to grow our national debt. The problem that is much more difficult to solve is the structure that shunts way too much income to the rich and leads to our large deficits and debt.

wealthy/rich are not the reason we have 37 trillion debt

The reason many of us liberals want to lower taxes on the poor is because they spend all, or almost all, of their income.

they do

That means they are not a drain on the economy, they are the engine

who do you think spends more, as a group .... the upper 20% of earners or the bottom 80% ?

. And even without income taxes under $150K they still pay more tax than what is best for the economy. FICA taxes start with the first dollar earned. If you are a free agent, double that tax to, what, 15-16% of your income? Sales taxes and tariff taxes on consumption fall on the lower end harder. The notion that the poor aren't paying any taxes, or enough tax, is criminally incorrect.

income tax its true

but for every $50,000 in houses and cars that the bottom 20% buy, what you think the top 80% buy? real estate taxes? personal property ? upper 20% own far far more than the bottom 80% combined don't they ?

All of these regressive taxes hurt the economy because they remove demand from the income-consumption-production cycle. But tax the rich, and consumption is hardly affected.

taxing the rich solves nothing

 

[JohnfrmClevelan]

wealthy/rich are not the reason we have 37 trillion debt

Then why do you think we have so much debt?

who do you think spends more, as a group .... the upper 20% of earners or the bottom 80% ?

I'm not sure, because I can't find a good breakdown of how much total income each group earns.

Better (and easier) question: who do you think saves more as a group? What group is responsible for that demand leakage?

but for every $50,000 in houses and cars that the bottom 20% buy, what you think the top 80% buy? real estate taxes? personal property ? upper 20% own far far more than the bottom 80% combined don't they ?

No doubt they have amassed more wealth. That's what tends to happen when you collect an outsized share of the income pie. But amassed wealth doesn't drive the economy, consumption does.

 

[JohnfrmClevelan]

no country in the world has the debt we do

Why do you think that is? We seem pretty prosperous.

adding 1.5-2 trillion a year in debt is unsustainable

Why do you say that? And give some explanation of what you foresee happening, and not just a display of meganumerophobia.

eventually we'll default and that will be global chaos don't ya think ?

You make it sound inevitable. Why?

 

[stealthycat]

Then why do you think we have so much debt?

because the US Fed Govt has spent trillions more than they brought in

I'm not sure, because I can't find a good breakdown of how much total income each group earns.

but logic and reason .... you can see that people owning $800,000 homes and having second homes and boats and 6 cars etc are spending more money, right ?

Better (and easier) question: who do you think saves more as a group? What group is responsible for that demand leakage?

sure, rich save more too, and spend more, of course they do

No doubt they have amassed more wealth. That's what tends to happen when you collect an outsized share of the income pie.

there is no "outsized share"

if anything, blame the lower income for not doing better and getting wealth

But amassed wealth doesn't drive the economy, consumption does.

AI Overview
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Yes, it's generally true that richer people consume and spend more money than those with lower incomes. The top 10% of earners in the U.S. now account for nearly half of all spending. This spending is driven by factors like gains in stocks, real estate, and other assets. Additionally, the wealthy are more likely to spend on luxury goods, travel, and experiences



The top 10% of earners in the U.S. now account for nearly half of all spending, a record in data going back to 1989. The spending surge among the wealthy is being driven by gains in stocks, real estate and other assets, while the bottom 80% of earners have seen their spending barely keep pace with inflation.Feb 23, 2025

 

[stealthycat]

Why do you think that is? We seem pretty prosperous.

Why do you say that? And give some explanation of what you foresee happening, and not just a display of meganumerophobia.

You make it sound inevitable. Why?

If our national debt isn't a big deal, then eliminate income taxes

simple


don't tax anyone ..... why tax anyone? let cities and states and the US Fed Govt shoulder massive debt. Take it all the way to me and you - why not ?

massive debt is good, right ?

 

[JohnfrmClevelan]

If our national debt isn't a big deal, then eliminate income taxes

simple


don't tax anyone ..... why tax anyone? let cities and states and the US Fed Govt shoulder massive debt. Take it all the way to me and you - why not ?

massive debt is good, right ?

Your flip answer shows that you don't understand why we run deficits and amass debt in the first place.

I started a thread on the subject not so long ago. Few were interested in the why, compared to the number who have strong opinions on the subject.

 

[AZRWinger]

I left off the "mindless" and "zealotry" because those are adjectives that aren't necessary to draw a a conclusion, but yes, he is bad. The real question is, are the people that mindlessly defend him no matter how much bad he does, no matter how depraved, cruel, unethical, illegal or immoral his actions, people follow, are they bad?

After the failed Mueller witchhunt, 2 failed impeachments, a KGB style House select committee show trial, a lurid fake dossier, and 4 sets of blatantly political criminal indictments, along with dozens of fake news phony scandals like Trump endorsed white supremacists as good people, the mindless zealot followers of Orange Man Bad continue to reflexively oppose anything Trump. Bitter deadender Bad Orange Man disciples unable to cope with the election loss have taken to defending illegal alien MS-13 and other gang members as well as "students" advocating ethnic cleansing of Israel by flooding selected district courts with lawsuits. Strip out the adjectives only necessary for demagoguery and you are left sputtering condemnation for anyone who doesn't join the Orange Man Bad lynch mob.