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

[devildavid]

My salary is less than $162k per year.



Makes sense.

I hope so. I've been an advocate for a National Sales Tax for years, now. But only IF the Income Taxes are eliminated entirely. . . for everyone.

National sales tax is a terrible idea. It is a regressive tax that hurts the lowest incomes and causes the economy to slow down and the cost of living to go up.

 

[JohnfrmClevelan]

tell me a reasonable plan to pay down $37 trillion in debt that's growing at 1.5-2 trillion a year

I'm all ears

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.

 

[Airyaman]

My salary is less than $162k per year.



Makes sense.

I hope so. I've been an advocate for a National Sales Tax for years, now. But only IF the Income Taxes are eliminated entirely. . . for everyone.

Not going to happen. Trump will probably try to put tariff money in his "sovereign wealth fund".

 

[JohnfrmClevelan]

Having an out-of-control trade deficit will eventually drain our country. When all the wealth is overseas buying up America we'll all be sorry. Maybe you don't mind having a Chinese boss and working for peanuts but I think this county deserves better. Thank God we have Trump that will actually do something about it.

A trade deficit drains nothing. This is trump's idiotic reasoning that eliminating a trade deficit by eliminating trade is a "win" in the amount of the trade deficit.

The value of what we import from China is far greater than the cost, considering that it gets shipped around the country, marked up and sold at retail, and/or used to produce stuff domestically. Plus the value of the stuff we export to China is greater than the deficit itself. You still think it's a good idea to eliminate trade with China?

Here's what happens with the dollars that end up in China: they buy treasuries, then sit on them. (If they didn't, it wouldn't be a trade "deficit.") It costs our government nothing to replace those dollars.

 

[aociswundumho]

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.

As the debt rises, the amount they have to pay in interest keeps going up. Interest payments are already their number 2 expense right behind SS.

 

[Econ4every1]

“It’ll take a little while before we do that, but we’re going to be cutting taxes, and it’s possible we’ll do a complete tax cut, because I think the tariffs will be enough to cut all of the income tax.” - Trump

(disclaimer: I do NOT agree with Trump's pie-in-the-sky fantasy about tariffs paying for a "complete tax cut")

So, I'll give you a 2 part answer.

Do I support lowering taxes on those that make less than $150k? In theory yes, very much so, in fact I'd go even higher than that, because I believe in a "middle-out-economy". IN fact, I'd even be for a those in the lowest income receiving more than they paid in in some cases.

But, if it's "paid for" by removing spending** and paying it back to the government, then the net/ net will likely be the same or worse especially for the people in the lowest income levels.

**When I say that I'm not for eliminating spending, there's a lot that goes unexplained when I say that.

1. I think it's good, very good to eliminate spending where the value (kind of a loaded word, but I had to pick something) per dollar spent is low, but (see #2).

2. Wherever money is cut, it should be reprovisioned in areas where the value is higher (no, Doge is not a good example, they are cutting without any consideration to the long term costs).

So, for example, if the building of an airport or a bridge or repair of the same or high speed internet or some other public project would result in many time greater economic value per dollar spent, then money cut from one area should be reallocated to another where the value realized can far exceed money spent.

Now that's not a hard fast rule, there are going to be times when returning money to the federal government might be necessary. But anyone that has their pants on fire screaming about hyperinflation is right around the corner has to realize that this claim has been around as anyone alive today. It's like predicting a meteor is going to wipe out all life on earth, which it almost certainly will, but it could be a while. It really depends on the economic variables at the time, but the fact that the debt grows each year is not, by itself, one of them.

 

[JohnfrmClevelan]

As the debt rises, the amount they have to pay in interest keeps going up. Interest payments are already their number 2 expense right behind SS.

That interest is just like any other budget item - it doesn't cost the government anything in real resources to pay it. Plus, it goes to bondholders, which is mostly U.S. citizens.

If that large pile of private sector savings bothers you, the only realistic way to slow its growth is to tax the heck out of the rich, because they are the ones with the savings.

 

[SkyChief]

Do I support lowering taxes on those that make less than $150k? In theory yes, very much so, in fact I'd go even higher than that, because I believe in a "middle-out-economy". IN fact, I'd even be for a those in the lowest income receiving more than they paid in in some cases.

That's redistribution of wealth, which is not really a valid function of government. It's Marxist nonsense, and has been going on in America since the 1930s. Government is too large, and it has become too powerful. Any collectivist ideology which relies on a centralized, confiscatory mandate (federal income taxes) is by definition authoritarian, which is always bad for liberty and freedom.

"The reason this country continues its drift toward socialism and big nanny government is because too many people vote in the expectation of getting something for nothing, not because they have a concern for what is good for the country." - Lyn Nofziger

Trump is trying (in vain) to eliminate government over-reach and in turn, restoring (some) liberty and freedom to the People. Naturally, as a libertarian, I respect that.

But, if it's "paid for" by removing spending** and paying it back to the government, then the net/ net will likely be the same or worse especially for the people in the lowest income levels.

"Paying it back to the government" is a bizarre concept to me. The money that govenrment takes from us (in taxes) is still OURS. . . it still belongs to us stiffs who busted our asses working for it. The government's job is to allocate OUR money - money that was taken from us (in the form of income taxes).

You and I have some VERY different ideas about the roles and functions of government!

**When I say that I'm not for eliminating spending, there's a lot that goes unexplained when I say that.

1. I think it's good, very good to eliminate spending where the value (kind of a loaded word, but I had to pick something) per dollar spent is low, but (see #2).

I think eliminating spending is the only way to reduce taxes. But no matter where spending is cut, some special-interest group starts the foot-stomping and the tantrums. Spending cuts are always messy.

"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." - Milton Friedman

Wherever money is cut, it should be reprovisioned in areas where the value is higher (no, Doge is not a good example, they are cutting without any consideration to the long term costs).

Oh dear.

Now that's not a hard fast rule, there are going to be times when returning money to the federal government might be necessary. But anyone that has their pants on fire screaming about hyperinflation is right around the corner has to realize that this claim has been around as anyone alive today.

I appreciate your taking the time and effort to express your views on taxation and redistibution of tax funding. I disagree almost completely, but I'm not trying to imply that your views are nonsense - - many Americans feel the same way you do. Very few Americans share my views about small government and lower taxes, maximizing liberty and freedom. (TOO few, actually).

"As government expands, liberty contracts." - Ronald Reagan

 

[JohnfrmClevelan]

"Paying it back to the government" is a bizarre concept to me. The money that govenrment takes from us (in taxes) is still OURS. . . it still belongs to us stiffs who busted our asses working for it. The government's job is to allocate OUR money - money that was taken from us (in the form of income taxes).

The government has its own money, you know. Not everything it spends comes from taxes; the "national debt" is basically a record of money (or bonds) that the government has created and spent into the economy and not taxed back.

 

[Econ4every1]

I've said it a million times, spending=income. Spending reductions=income reductions."

That's redistribution of wealth, which is not really a valid function of government. It's Marxist nonsense, and has been going on in America since the 1930s.

Seems the rise of America since the 1930th to the most powerful and until recently one of the most admired nations in the world.

So, "Marxist nonsense" as you put it, the results seem to speak for themselves.

"The reason this country continues its drift toward socialism and big nanny government is because too many people vote in the expectation of getting something for nothing, not because they have a concern for what is good for the country." - Lyn Nofziger

That’s a tired talking point. Wanting healthcare, education, or fair wages isn’t “getting something for nothing”—it’s investing in a healthier, more productive society. Prioritizing people’s well-being is what’s good for the country.

Trump is trying (in vain) to eliminate government over-reach and in turn, restoring (some) liberty and freedom to the People. Naturally, as a libertarian, I respect that.

Trump talks about cutting government overreach, but in reality, he expanded executive power, undermined democratic norms, and used government institutions to serve personal and political interests—not to restore liberty for all.

"Paying it back to the government" is a bizarre concept to me. The money that govenrment takes from us (in taxes) is still OURS. . . it still belongs to us stiffs who busted our asses working for it. The government's job is to allocate OUR money - money that was taken from us (in the form of income taxes).

The government creates money and spends it into the economy. Then it takes some back to manage inflation among other things.

I think eliminating spending is the only way to reduce taxes.

Eliminating gov spending reduces income.

Less income means less priv sec spending

Less priv sec spending results in reductions in real productivity

Reductions in productivity result in job losses

Job losses increase the need for basic assistance (feeding, clothing, educating and healing children as an example).

So cutting spending has decreased productivity and increased the need for government spending and reduced taxes collected.

Sounds like a Libertarian wet dream.

"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." - Milton Friedman

Friedman followed this by saying that cutting taxes should be equaled by reductions in spending and I enumerate the problem with that above.

Very few Americans share my views about small government and lower taxes, maximizing liberty and freedom. (TOO few, actually).

That's just it, your ideas might result in "liberty and freedom" for a very select few, and for the masses they would be subjected to economic coercion masquerading as "choice".

All the while the nation as a whole would be more like Russia than the US, where a handful of wealthily oligarchs behind a dictator that uses economic coercion to control the masses. I mean, even Russia has elections and pretend to give people choice. That's the world you want, whether you realize it or not.

 

[SkyChief]

The government has its own money, you know.

And where did government GET their own money?

Somebody had to earn it, OR it had to be borrowed from a bank cartel. When the government borrows money, it lowers GDP, and in turn lowers growth. When the government overspends, and over-taxes, tax revenues go DOWN forcing them to borrow even more.

"If socialists understood economics, they wouldn't be socialists." - Friedrich Hayek

Not everything it spends comes from taxes; the "national debt" is basically a record of money (or bonds) that the government has created and spent into the economy and not taxed back.

LOL . Good lord!

 

[Hamish Howl]

Gonna pay more with tariffs than income taxes.

 

[CaughtInThe]

It's almost like the president doesn't get to write the laws. The Republican Congress people have to do this.

 

[Chomsky]

Poor people buy cheaper things, and the net NST paid on those items would be less. Also, poor people often buy Thrift Store items, which would be exempt from the NST because the NST was paid when these items were new.

Any and all used items are exempt from the NST - including motor vehicles.

NST is not imposed on Eggs which are sold at the grocery store. No foods in the grocery store would be subject to the NST. (Beer and alcohol sold at the grocery store might be subject, depending on the state)

Anyways, we're WAY off topic here. This thread is about Trump's proposal to eliminate taxes for people who earn less than $150,000 per year. What are your thoughts on that? Do you support it, or oppose it?

I'd like to respectfully chime in:

"Given that tariffs are being applied to move manufacturing back to the States, how can tariffs supplant the income tax when they're gone?"

 

[JohnfrmClevelan]

And where did government GET their own money?

Somebody had to earn it, OR it had to be borrowed from a bank cartel. When the government borrows money, it lowers GDP, and in turn lowers growth. When the government overspends, and over-taxes, tax revenues go DOWN forcing them to borrow even more.

"If socialists understood economics, they wouldn't be socialists." - Friedrich Hayek


LOL . Good lord!

It comes from the Treasury. They issue bonds in exchange for already-existing reserves, and they spend those reserves. Do you seriously believe that a government with its own currency cannot create and spend that currency?

What you think is a borrowing operation is not borrowing at all. And banks are only involved as intermediaries between buyers (who spend out of their bank accounts) and the central bank, which deals in reserves. No private sector assets are used in this operation. It is a straight addition of financial assets (treasuries) from the government to the private sector.

You can see this every single year; the government spends over and above their tax receipts, and the private sector gains exactly as much as the government deficit spends.

 

[Chomsky]

As a former technical sales person for Dell, I can tell you first hand the amount of stuff that people get to write off is absurd. Why have a businesses meeting in a stuffy downtown building? Have it at top shelf hotel, or even better a vacation destination (don't worry you can write it off as a "business meeting". We'll have a day or two of meetings, and maybe a conference where no one will miss you. The value of what get's written off on a week like that is easily the wage of a Starbucks employee get's paid in year.

Have you ever gone out to eat with start-up entrepreneurs? Little guys, not Jobs or Zuckerberg? They all fight for the check payment receipt!

 

[Econ4every1]

And where did they GET their own money?

The government created it. All you need to prove this to yourself is ask yourself, in a fiat economy what comes first, taxes paid to government or spending paid to taxpayers?

Simple, the government creates dollars and people earn them and use them to pay taxes. If you can't understand this, you will always misunderstand how government spending works. Now, even if you come to terms with the way things work, you don't have to like it, but your conception of how government spending works is wrong.

Here, this illustrates how it works.

Now I use "credit and debit. Credit is inflows, and debits are outlays. The private sector can really be thought of as the US private sector + foreign sector.



Another way to look at this is like this:

 

[Econ4every1]

Have you ever gone out to eat with start-up entrepreneurs?

I worked for Dell in Tysons Corner VA, about 10 miles from the Center of DC. It is the Mecca of small startups looking for no-bid contracts they can start a company with. Once they get their foot in the door, hell yeah.

Now I work within (not for) the government, but I'm subject to all the same rules. I cannot accept a lunch, but the Prez can accept a $400 million dollar flying f--k palace

Wait...I can hear the clicking of eager responses...."Your just jealous!". Yeah, I'm pissed that in my meeting this afternoon to discuss upcoming RFC's with a vendor, and I still had to pay for my own Ruben and fizzy water.

But I digress.

 

[SkyChief]

It's almost like the president doesn't get to write the laws.

No president can write the laws. A president has power to make Executive Orders.

The Republican Congress people have to do this.

And Democrat Congress people, too.

The government created it. All you need to prove this to yourself is ask yourself, in a fiat economy what comes first, taxes paid to government or spending paid to taxpayers?

Yes, fiat money is created by government. But taxpayers make the GDP that allows government to create it. If nobody produced anything to warrant the creation of new fiat money, and the government kept creating it, then the money (and the economy) would collapse in a matter of hours or days.

Taxes are by far the largest source of revenue for the federal government. The government does receive income from other sources (like fees and interest), but those sources are dwarfed by what they take in income taxes.

Simple, the government creates dollars and people earn them and use them to pay taxes. If you can't understand this, you will always misunderstand how government spending works.

O dear. "If socialists understood economics, they wouldn't be socialists." - Friedrich Hayek

 

[Chomsky]

there literally isn't a feasible plan with $37 trillion in debt

it will never stop now - our Democrats and Republican's in our Fed Govt have spent us into a spiral that will NEVER stop

if you can link me to ANY valid plans to tackle this national debt I'd love to see it - seriously - because I have yet to read anything that can show how it can be fixed. Not now

You forget that after Reagan tripled the National Debt, Clinton not just balanced the Budget - but actually ran a surplus!

Of course that quickly ended with the war-happy GW & Cheney. But it shows it is indeed possible.

 

[JohnfrmClevelan]

The government didn't "create" the money that they take from taxpayers. Those monies are taken from the taxpayers who worked hard for it. We actually earned that money. It was not "created" and it did not just magically pop into existence.

Money certainly doesn't "pop" into existence. It is created on ledgers. So what makes you think that the government, with their own central bank, cannot create its own money on its own ledgers?

You sure have peculiar ideas on how government is funded.

Maybe they seem peculiar to you, but they are correct.

 

[Chomsky]

The government created it. All you need to prove this to yourself is ask yourself, in a fiat economy what comes first, taxes paid to government or spending paid to taxpayers?

Simple, the government creates dollars and people earn them and use them to pay taxes. If you can't understand this, you will always misunderstand how government spending works. Now, even if you come to terms with the way things work, you don't have to like it, but your conception of how government spending works is wrong.

Here, this illustrates how it works.

Now I use "credit and debit. Credit is inflows, and debits are outlays. The private sector can really be thought of as the US private sector + foreign sector.

View attachment 67570157

Another way to look at this is like this:

I appreciate your efforts, here. Thank you.

During my undergrad I took Micro & Macro as electives (for my own desires), and was slated to take the next class in the sequence - Money & Banking. It was taught by one of the local Fed directors.

Unfortunately I ran out of electives outside my major, and it broke my heart to not take the class. I still regret it 'till this day. Very much so.

 

[JohnfrmClevelan]

I appreciate your efforts, here. Thank you.

During my undergrad I took Micro & Macro as electives (for my own desires), and was slated to take the next class in the sequence - Money & Banking. It was taught by one of the local Fed directors.

Unfortunately I ran out of electives outside my major, and it broke my heart to not take the class. I still regret it 'till this day. Very much so.

Here is a good primer on banking...

Money and Banking-Part 8: The Private Banking Business

By Eric Tymoigne The US financial system is extremely complicated and this series shades light only on some corners of that system by focusing on the banking sector. Here is a broad picture of the …

neweconomicperspectives.org

 

[Kushinator]

My guess is they will just try to inflate the debt away.

It doesn't really work that way.

Sure, if inflation keeps up with economic growth, debasement doesn't bother people as much. But if inflation begins to outpace real growth, people will feel the need to substitute... and it pisses the population off to no degree.

You can successfully outgrow debt.

 

[Mr. Invisible]

This is definitely cause for concern. If the income tax is eliminated, then I would expect them to cut spending massively, using the lack of tax revenue as an excuse as to why we can't have a social safety net. If this happens, then say goodbye to Medicare, Medicaid, and Social Security. There were obviously already making moves on those programs, but this may just serve as a pretext to finally take the axe to all of them.