Election 2024 puts $6 trillion in taxes on the November ballot
$4 trillion in tax cuts expire and Biden could add in $2 trillion in additional burdens
{{#rendered}} {{/rendered}}If the upcoming election in November is reminiscent of the 1993 movie "Grumpy Old Men" with Jack Lemmon and Walter Matthau, you might want to also rewatch "The Bad News Bears" with another four years governed under what we colloquially call Bidenomics. It isn’t a dollar’s worth of difference between the two parties, it’s more like $6 trillion at stake when you pull the lever in November.
Embedded within this discourse between the two parties lies some potential deception when you peel back the artichoke and really analyze the numbers. You should never be fooled by percentages and always look at the real dollars coming out of your pocket.
Consider, for instance, a purported 5% increase in capital gain rates for 20% to 25% — a seemingly modest adjustment. However, a deeper examination reveals that this type of tax change would translate to a 25% increase in taxes in actual dollars and not 5% as might be reported. This basic arithmetic underscores the gravity of the electoral choices right around the corner.
{{#rendered}} {{/rendered}}INFLATION CONCERNS PUSH BLUE-COLLAR WORKERS TO VOTE RED IN 2024
Here's an example. If you had a $100,000 gain and paid 20%, you would owe $20,000. If you had a $100,000 gain and now paid 25%, you would owe $25,000. The difference between $20,000 and $25,000 isn’t 5% ... it’s 25%! Here’s why this simple math problem should have you think twice come November.
Depending on how the presidential election goes, taxpayers might be paying Uncle Sam trillions more. (iStock)
As a retrospective glance, the "Tax Cuts and Jobs Act of 2017" ushered in a sweeping paradigm of pro-growth tax reforms, marked by several pivotal provisions. Noteworthy among these were the reduction of top marginal tax rates from 39.6% to 37%, a significant expansion of the standard deduction, and the implementation of State and Local Taxes (SALT) for itemized deductions, among others.
{{#rendered}} {{/rendered}}Yet, these beneficial measures are poised to expire by the end of 2025, wiping out $4 trillion in tax relief. Moreover, if the current administration's proposed tax reforms materialize, an additional $2 trillion of burden may be imposed upon Americans already grappling with inflationary pressures.
Consider the ramifications: Under the "Tax Cuts and Jobs Act," the standard deduction, which Forbes estimates is utilized by nearly 90% of filers, was doubled, offering substantial relief particularly to middle and lower-income families.
The potential reversion to pre-2018 figures if these tax cuts expire at the end of 2025 would inflict financial hardship on many, not just the wealthy. Millions of middle-class Americans would see a pay cut.
{{#rendered}} {{/rendered}}Similarly, the prospect of reverting to a top tax rate of 39.6% and the proposed adjustments to raising federal income taxes and inheritance taxes won’t squeeze enough out of the lemons to make lemonade.
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Absent an extension, the estate tax exemption levels could plummet by as much as 50%, jeopardizing the intergenerational transfer of wealth painstakingly accumulated by families. You did great the last seven years, so what? Get ready to give it back.
{{#rendered}} {{/rendered}}The proposed revisions to Social Security taxes also loom on the horizon, with discussions revolving around imposing a 6.2% unlimited Social Security tax on incomes exceeding $400,000, akin to an indefinite Medicare tax.
The president continues the rhetoric saying that, "I’m a capitalist, but pay your fair share." Fair share! In 2022, it’s estimated by Statista that 40.1% of Americans paid no federal income tax. Here’s a question? Is paying zero fair?
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{{#rendered}} {{/rendered}}Yet, these beneficial measures are poised to expire by the end of 2025, wiping out $4 trillion in tax relief. Moreover, if the current administration's proposed tax reforms materialize, an additional $2 trillion of burden may be imposed upon Americans already grappling with inflationary pressures.
How many of those that paid no income tax got money back in tax credits and other structures from the government. When the president says wealthy people need to pay their fair share what he means is help pay more taxes to support all of those who don’t pay any. Isn’t that right?
It’s not that long before each of us must hit the ballot box in November. Before you press the button and cast your vote, there may be 6 trillion reasons to consider the future of how much of your hard-earned money you keep.