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    Trump confirms he’ll be negotiating his signature tax bill after Musk criticism

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    Donald Trump said he will be negotiating his signature tax bill after Elon Musk publicly criticised the president’s spending plan, saying it “undermines” cost-cutting efforts that the world’s richest man once spearheaded.Speaking to reporters on Wednesday, Trump acknowledged the bill “needs to get a lot of support” in Congress, adding “we have to get a lot of votes”. The president also said he was “not happy about certain aspects of it, but I’m thrilled by other aspects of it” and confirmed he would be negotiating the legislation.The remarks come after Musk said he was “disappointed to see the massive spending bill, which increases the budget deficit … and undermines the work that the Doge team is doing” in comments made to CBS as part of a longer interview due to run on its Sunday morning programme this weekend.Musk had been leading the “department of government efficiency” (Doge) since January, which was given the task of cutting state spending. He later announced in April he would be stepping back from the Trump administration after Tesla’s earnings plunged, and spending millions of dollars in a supreme court race that his Republican candidate ultimately lost.Musk now appears to be hitting out at Trump’s One Big Beautiful Bill Act, which was narrowly approved last week by the House of Representatives.The bill pushes ahead with a number of Trump’s campaign promises, including extending tax cuts for individuals and corporations and ending clean energy incentives enacted under Joe Biden.It also involves about $1tn (£741bn) in cuts to benefits aimed at supporting struggling households, including a health insurance scheme for low-income families, Medicaid, and Supplemental Nutrition Assistance Program (Snap) food stamps.However, the bill also funds the construction of a wall along the border with Mexico, as well as staff and facilities for mass deportations of undocumented immigrants. Even when taking cuts into account, the bill is expected to add about $2.3tn to the deficit, according to the non-partisan Congressional Budget Office.Musk told CBS: “I think a bill can be big, or it can be beautiful. But I don’t know if it can be both. My personal opinion.”The comments will fuel rumours of a growing rift between the billionaire and the US president, whom Musk helped bankroll last year. In total, Musk’s super political action committee donated $200m to Trump’s presidential campaign before the November election, which many credit with helping to return Trump to the White House.Musk also has business interests at stake, with Trump’s bill due to end a $7,500 tax credit for electric vehicles and to impose a $250 annual registration fee for owners. The Tesla boss has previously called for an end to those incentives, although that was months before the EV maker’s earnings started to wobble.skip past newsletter promotionafter newsletter promotionLast month, Tesla reported a 71% drop in first-quarter profits to $409m, compared with $1.39bn in the same period in 2024. Tesla’s stock has also suffered, with the company losing about a quarter of its market value since Musk took a top spot in Trump’s administration at the start of the year.Musk’s criticism is likely to fuel opposition by hardline Republicans, who threatened to block Trump’s legislation as it passes through the US senate unless the president rolls out deeper cuts that would reduce the national debt. One key senator, Rand Paul from Kentucky, told Fox News Sunday that the bill’s cuts were “wimpy and anaemic” and would “explode the debt”.However, Trump has already been treading on politically sensitive territory by supporting a bill that makes big cuts to programmes he promised to protect. He pledged multiple times on the campaign trail last year that he would not touch basic safety nets, including Medicaid.Some of the president’s “make America great again” supporters, including the former White House strategist Steve Bannon, have also warned against such a move, with one Missouri senator, Josh Hawley, saying that cutting health insurance for the working poor would be “politically suicidal”. More

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      Why is Trump considering raising taxes on millionaires? | Alex Bronzini-Vender

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      “I actually love the concept,” Donald Trump recently told Time magazine of a proposal circulating within his cabinet to raise taxes upon those earning over $1m. “I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news.”Few presidential administrations have killed sacred cows at a faster rate than that of Donald Trump. But this really is shocking: a sitting Republican president praising a proposal to raise taxes upon the wealthy, adding only the slight caveat that it would be adversely spun by those in “the fake news”. A tax increase, Trump apparently believes, would be tenable as policy but not as politics.Trump says something similar of almost every idea thrown his way, and commentators have long observed that the surest way to change the president’s mind is to be the last person who spoke to him. Perhaps more interesting than Trump’s judgment on the issue, then, is that leading members of his cabinet have endorsed a similar tax hike. Longtime anti-tax activists are panicked. As the Lever recently noted, there’s every reason to believe that serious cracks are appearing in the Republican anti-tax coalition.First: why? The proposal itself is a brainchild of the conservative American Compass thinktank, which, in a June 2024 white paper, proposed raising taxes upon the wealthy to pay down the American national debt. “The constituency and base of the Republican party is shifting,” Oren Cass, American Compass’s founder, told the Atlantic in April. To extend Trump’s 2017 tax cuts by simply adding $5tn to the American national debt would be, in Cass’s words, “pathetic, embarrassing, and outright cheating”.Steve Bannon, like Cass, has long fretted about the contradiction between the Maga movement’s populist posture and its upwardly redistributive governance. “This is a 1932-type realignment, if we do this right,” Bannon told Semafor in December. “You have to break that mindset that stock buybacks are fine, that crony capitalism is fine, and the tax breaks for the corporations are fine, then you’re going to squander a unique moment in history.”The proposal’s origins might be among the movement’s heterodox policy impresarios, but – more confusingly – its potential backers within the White House aren’t just self-styled economic populists like JD Vance. Those reportedly open to the idea also include mainstream conservatives like Russell Vought, director of the office of management and budget and a stalwart of the Heritage Foundation, and Scott Bessent, a former hedge fund manager and Trump’s treasury secretary.Their voices confound the expectation that the party’s “realignment” wing is driving the breakdown of the Republican consensus on tax-cutting. Instead, it’s something much more prosaic: the Trump administration’s economic team has realized that an abnormally large slice of the American debt needs to be refinanced this year.Trump administration officials hoped that, following Trump’s “liberation day” tariff announcement, investors would seek safety from a faltering stock market by shifting capital into US treasury bonds. Such a move, they reasoned, would drive bond prices up and yields down – since bond yields fall when prices rise, as the fixed interest payments become less attractive relative to the purchase price. Lower yields, in turn, would ease the government’s borrowing costs.And for a moment, it seemed the plan was working. The 10-year yield dipped, and Trump touted it as validating his tariff strategy. But the movement didn’t hold. Rather than rotating into bonds, investors fled both equities and treasuries, spooked by inflationary pressure from tariffs, fiscal instability and rising geopolitical risk. The result was a sharp drop in demand for government debt, a spike in yields and a higher cost of borrowing – precisely the outcome the White House had hoped to avoid.The Trump administration’s one weird trick to refinance at lower costs than necessary failed. Now, the Republicans have two remaining options: cut spending, or cut the tax-cutters loose.What does that portend for the future of American conservatism? Whether or not the Trump administration follows through on raising taxes on the wealthy – it likely won’t – the fiscal compact that’s underpinned American conservatism has, at least in the near term, become unsustainable.skip past newsletter promotionafter newsletter promotionSince the presidency of Ronald Reagan, conservatives have largely managed to slash taxes on the wealthy without pursuing correspondingly deep austerity measures. Public debt has made up the difference. “Reagan proved deficits don’t matter,” Dick Cheney reportedly told the treasury secretary as the Bush administration sought a second round of tax cuts in 2003. But, at least over the next year, deficits will very much matter. And however the Republicans choose to resolve their impasse, a critical flank of the Trump coalition – either the wealthy or the party’s increasingly working-class base – will need to pay.If the Republican fiscal bargain is breaking apart, the GOP will need another way to unify its increasingly disparate base. The Democrats have long suffered from a similar issue: the statistician Andrew Gelman observed in 2007 that the real mystery of Americans’ voting behavior wasn’t that working-class voters were drifting towards the GOP – an overstated effect at the time – but that rich and poor alike were casting their lot with Democrats. The Democrats resolved this, but to mixed results. Rather than take on the deeper structural questions of economic inequality, they focused their campaigns on defending existing programs like social security and Medicare, advancing measured reforms in the name of racial justice, and protecting rights to abortion and same-sex marriage.Perhaps the crack-up of the tax-cutting coalition will lead the Republican party to attempt that compromise a l’envers. Just as the Democrats sidestepped thorny economic issues by rallying around the defense of widely accepted civil rights, the GOP could turn away from its longstanding economic bargain – the one that has defined its politics since Reagan – and instead double down on its campaign to undermine those same rights. In deepening its abuses against noncitizens, racial and sexual minorities, and activists on behalf of Palestinian rights, the Trump administration might perceive itself as restoring purpose to a party sorely lacking it.It’s too soon to tell. What is certain, however, is that the tax-cutting coalition as we know it has become deeply unsustainable. Tax-cutting once unified the Republicans. But, in forcing Trump to choose between taxing the top or deeper austerity for the bottom, it now threatens to blow it apart.

      Alex Bronzini-Vender is a writer living in New York More

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      The Republican anti-tax coalition is beginning to disintegrate | David Sirota, Arjun Singh, Ariella Markowitz and Natalie Bettendorf

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      “I am a gay woman who is moderately pro-choice – I know that there are some people in this room who don’t believe that my marriage should have been legal,” the rightwing impresario Bari Weiss told a Federalist Society gathering in 2023. “And that’s OK. Because we’re all Americans who want lower taxes.”The assembled conservatives guffawed at hearing the quiet part out loud: in this case, the admission that tax cuts for the rich have been the glue holding the US conservative movement together.And yet, less than two years after Weiss’s speech, the epoxy seems to be less sticky.In recent weeks, polls have shown Republican voters becoming far more skeptical of across-the-board tax reduction proposals. Reflecting that shift, GOP lawmakers are now trial-ballooning a proposal to increase some taxes on the wealthy. Some Maga voices are attempting to articulate a Republican-leaning, tax-cut version of Democrats’ traditional redistributionist rhetoric, arguing that higher taxes on millionaires should finance bigger tax cuts for the working class.All of this has the Washington swamp’s old-guard Republicans in a panic; one longtime anti-tax leader insisted that “there are traitors inside the Trump White House,” and another declared: “This is a potential crisis in the party – it sounds like Bernie Sanders economics.”So what happened? Why is the anti-tax argument losing its unifying power among Republicans?As the Lever’s new investigative audio series Tax Revolt details, the answer may lie in that movement’s key revelation a half-century ago.The Santa Claus theory of tax cutsIn the mid-1970s, the Republican party was adrift, demoralized and divided amid both the post-Watergate backlash and the Republican president Gerald Ford’s attempt to raise taxes in pursuit of halting inflation and plugging federal budget holes. A young journalist named Jude Wanniski had an epiphany when at a lunch meeting, he watched the economist Arthur Laffer draw a curve on a napkin to argue to the Ford staffers Dick Cheney and Don Rumsfeld that cutting taxes could raise companies’ revenues.Two years later, Wanniski penned a grand unifying “Santa Claus Theory”, arguing that Republicans had “continued to play Scrooge, carping against increased spending without ever offering the obvious alternative”: tax reduction.He concluded: “Republicans, traditionally the party of income growth, should be the Santa Claus of tax reduction,” offering it as a supposed gift to Americans – and understand that “the first rule of successful politics is Never Shoot Santa Claus.”It was a revelation for a new generation of conservatives seeking to create a sunnier, more optimistic image for the GOP in the wake of Barry Goldwater’s cranky campaign and Richard Nixon’s downfall. Younger, more telegenic Republican leaders such as Representative Jack Kemp passed the essay around to colleagues, urging them to reimagine tax cuts not solely as a means to demonize government, but also as a way to court the working class with promises of life-bettering benefits.The dual message of so-called “supply-side economics” soon found its Santa Claus in the anti-tax governor turned anti-tax president Ronald Reagan.“As government’s hunger for ever more revenues expanded, families saw taxes cut deeper and deeper into their paychecks,” Reagan said before signing federal legislation to cut the top marginal tax rate. “This tax bill is less a reform than a revolution. Millions of working poor will be dropped from the tax rolls altogether, and families will get a long-overdue break with lower rates.”High-income tax cuts became the Republican party’s economic policy priority – and depicting such gifts to the wealthy as a boon to the working class became the GOP’s political strategy. Indeed, Reagan, George W Bush and Donald Trump each championed tax cut legislation that delivered disproportionate benefits to the rich, and fueled an explosion of economic inequality – all while presenting their agenda as fight-for-the-little-guy populism.“I promised we would pass a massive tax cut for the everyday, working American families who are the backbone and the heartbeat of our country,” Trump said on the eve of signing his $1.9tn tax cut bill in 2017. “We’re just days away [from] keeping that promise and delivering a truly amazing victory for American families. We want to give you, the American people, a giant tax cut for Christmas.”This sales pitch became ubiquitous, and most political prognosticators assumed it would always be effective. But survey data suggests that most Americans have come to realize that while Tax Cut Santa Claus has been stashing big gifts under billionaires’ Christmas trees, he’s been leaving everyone else’s stockings empty.Whereas more than half of Americans approved of Reagan’s first major high-income tax cut proposal, only about a third of Americans approved of Bush’s similar tax proposal at the same time in his presidency. By the time Trump assumed office for his first term, less than a third of Americans supported his high-income tax cut initiative, knowing that such policies have failed to benefit them personally and failed to boost the macroeconomy.‘The times are totally different’Fast forward to Trump’s second term. In previous eras, a new Republican president delivering more tax cuts for the wealthy would be a foregone conclusion under Wanniski’s Santa Claus theory. But that political hypothesis is now buckling under the weight of Trump’s new $4.5tn proposal to extend his 2017 tax cuts.In its current form, the White House’s initiative would deliver more than half its benefits to the richest 10% of the country. Coupled with spending cuts and tariffs, Trump’s agenda would deliver a big income boost to the top 1%, while reducing the income of the bottom 80%, according to the Center on Budget and Policy Priorities.As Trump’s legislative agenda hits Congress, opposition to more high-income tax cuts is strong not just among Democrats and independents, but also among Republicans. Morning Consult reports that 70% of GOP voters believe “the wealthiest Americans should pay higher taxes” – a whopping eight-point jump from six years ago. Moreover, “roughly 7 in 10 voters, including 2 in 3 Republicans, support proposals to raise taxes on earners making more than $400,000.”Republican leaders are responding with the previously unthinkable: proposals to raise some taxes on the rich. Indeed, Trump reportedly floated the idea and some GOP lawmakers are considering creating a new top tax bracket.This has touched off an intraparty civil war. On one side are those who came of age in the Reagan and George W Bush epochs – Newt Gingrich, Sean Hannity, the former vice-president Mike Pence, Americans for Tax Reform’s Grover Norquist, the hedge-funder-turned-GOP senator Dave McCormick, and the Club for Growth’s Stephen Moore. This old guard believes Republicans can still get away with depicting billionaire giveaways as populism, and vilifying tax hikes on the rich.“It’s vicious and full of envy. It’s a dumb idea. It’s bad for the economy,” said Norquist, who spent the last quarter-century pressing Republicans to sign pledges to oppose all tax increases. “What happened when George Herbert Walker Bush raised the top rate? Let’s see, he lost the next election. We lost House and Senate seats and taxes went up and we had a recession.”On the other side are newfangled Maga voices – the former Mitt Romney staffer Oren Cass, Vice-President JD Vance, the former Trump strategist Steve Bannon, and reportedly Trump’s budget director, Russell Vought. They sense political peril in Republicans presenting themselves as populists while their party enriches billionaires and corporations.“We have to increase taxes on the wealthy,” Bannon said in December. This month he added that conservatives must prove “Republicans are not the country club Republicans”, which is “why it’s so important to not extend the tax cuts for the wealthy”.Of the old anti-tax crowd, Bannon added: “They’re arrogant and they refuse to look at the reality of the situation we’re in … The times are totally different.”‘Didn’t we already give them a break at the top?’Of course, we’ve been at these junctures before – moments when Republicans seemed to sense political vulnerability on taxes.In 1985, Reagan tried to deflect Democrats’ criticism of his tax policy by insisting: “There is one group of losers in our tax plan – those individuals and corporations who are not paying their fair share or, for that matter, any share. These abuses cannot be tolerated.”Similarly, George W Bush momentarily pushed back against conservative aides pressing him to champion yet another tax cut for the rich. “Didn’t we already give them a break at the top?” he reportedly asked.But the powerful anti-tax movement of those eras convinced both Republican presidents to plow forward. Reagan followed up his first tax cut by further reducing the top tax rate, and Bush’s sequel to his first tax cut was slashing taxes on corporate dividends.Trump could end up doing much the same. After all, ramming more tax cuts for the rich through Congress is the surest way for Trump to enrich himself, his family and the entire front row of his inauguration.But this time around, the long-term politics of taxes are in flux. Running the same tax play would show a Republican president siding with oligarchs against the preferences of his own party’s rank and file that no longer buys the Santa Claus theory.That’s a new and unpredictable dynamic – one that may finally begin weakening the anti-tax movement’s grip on power in the years ahead.

      David Sirota is the founder and editor-in-chief of the Lever, an investigative news outlet. Arjun Singh, Ariella Markowitz and Natalie Bettendorf are producers of the outlet’s weekly podcast Lever Time, which is releasing a new miniseries Tax Revolt, on the 50-year history of the anti-tax movement now culminating in the Trump tax cuts. More

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      What would it mean for Trump to revoke Harvard’s tax-exempt status?

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      Harvard University is in a standoff with Donald Trump after rejecting a series of demands from the president’s administration, which critics view as an attack on the elite college for its reputation among conservatives as a bastion of liberal thought.After cutting off its funding, Trump has reportedly given the Internal Revenue Service (IRS) a potentially illegal order to revoke the university’s tax-exempt status. Such a decision would mark an escalation in the Republican president’s weaponization of federal government agencies against the people and institutions that defy it.Here’s more about the battle between Trump and Harvard and how the president might try to use the IRS:How did the standoff begin?The Trump administration’s antisemitism taskforce this month sent the university a letter saying it had “failed to live up to both the intellectual and civil rights conditions that justify federal investment”. It listed demands, including banning face masks, closing its diversity, equity and inclusion programs and cooperating with immigration authorities.How did Harvard react?Harvard’s president, Alan Garber, refused to yield, saying: “[T]he university will not surrender its independence or relinquish its constitutional rights.” It has retained attorneys William Burck and Robert Hur, both veterans of Republican administrations, who say Trump’s demands are “in contravention of the first amendment”. Harvard’s stand is in contrast to the situation at Columbia University, which acceded to similar demands from the Trump administration in exchange for the restoration of $400m in federal funding that was revoked.How did Trump retaliate?The Trump administration quickly froze $2.2bn in grants and $60m in multiyear contracts to Harvard. A member of the president’s antisemitism taskforce attacked the school’s stance, saying it “reinforces the troubling entitlement mindset that is endemic in our nation’s most prestigious universities and colleges – that federal investment does not come with the responsibility to uphold civil rights laws”. Trump then called for Harvard to lose its tax-exempt status, and the Washington Post reported that the administration had asked the IRS’s top attorney to revoke it.What is tax-exempt status?If the IRS grants an organization tax-exempt status, they can avoid paying federal income tax, but must follow certain rules. These include refraining from campaign activity or attempting to influence legislation, while no individuals or shareholders are allowed to receive their earnings. According to the IRS, the status is available to charitable, religious, scientific and literary organizations, as well as those involved in preventing cruelty to children or animals, organizing amateur sports competitions or conducting testing for public safety reasons.Can Trump legally ask the IRS to revoke the university’s tax-exempt status?Federal law prohibits the president from directing the IRS to conduct an investigation or audit, and no evidence has yet emerged that the university has done anything to lose its tax-exempt status. White House spokesperson Harrison Fields told US media “any forthcoming actions by the IRS are conducted independently of the President, and investigations into any institution’s violations of their tax status were initiated prior to” Trump’s public call for the status to be revoked.Has something like this happened under Trump before?In 2022, after Trump’s first term concluded, the New York Times reported that the former FBI director James Comey and his ex-deputy, Andrew McCabe, had been selected in 2019 for the IRS’s most invasive form of random tax audit. Trump had fired both Comey and McCabe during his term, and tax experts said both of them being selected for the audits was unusual. Trump, who had attacked Comey and McCabe by name even after their dismissals, denied any involvement. More

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      If Britain must rearm, how to pay for it? Stiffen the sinews; summon up the taxes | Polly Toynbee

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      “A new era is upon us.” Ursula von der Leyen was not holding back. This is a world turned upside down, changed beyond recognition. Leaders across Europe are echoing the alarm sent out by the European Commission president, and rippling across the continent, Canada and elsewhere: that we face a “clear and present danger on a scale that none of us has seen in our adult lifetime”. She has proposed a plan that would offer €800bn (£660bn) for immediate rearming, with a European sky shield to protect Ukraine.The hooligan Russian asset in the White House has changed everything so profoundly that it is hard to keep track. The US, whose coat-tails we clung to, whose culture we revelled in, whose cleverness dazzled and stupidity confounded, is now the enemy. The shock feels viscerally personal because American culture is deep in our veins at all ages, from Sesame Street to Marvel, from Philip Roth to Philip Glass, the Oscars to Silicon Valley, like it or not. In Iraq and Afghanistan, we obediently followed their blunders, and 642 British soldiers died, as Keir Starmer adroitly reminded JD Vance in parliament. Our glamorous friend has turned fiend. How do we cauterise that off us? Or reconfigure the map of the world in terms of friends and foes?Former UK ambassadors to Washington ruminated over this “seismic” shift, which has shaken every norm from their Foreign Office days. “This is not a blip in the relationship, something fundamental is going on,” one old knight warned a Lords select committee, while another cautioned that the US giving up on Europe in favour of Russia was likely a “current reality”. Sir David Manning pinpointed Britain’s specific anguish at this moment, the downside of the so-called special relationship: as Europe galvanises to rearm, unlike our continental neighbours, we depend on the US for our defence.With every new shock wave, Britain feels this trauma in its marrow. Yet there is hesitancy in government about addressing the nation with a call to arms, as French president Emmanuel Macron has done, warning: “the innocence of these 30 years since the fall of the Berlin Wall is over.”Look at the remarkable response of Germany’s chancellor-in-waiting, Friedrich Merz, lifetime financial conservative and fiscal dogmatist, as he grasps the severity of the times: he will reverse all his previous fiscal policies and his nation’s usual dread over borrowing, breaking their “basic law” with a huge €500bn loosening of debt rules to rearm. This amounts to “one of the most historic paradigm shifts in German postwar history”, according to Deutsche Bank. German borrowing costs shot up, but so have predictions of German growth from a sluggish 0.8% to 2%, with investors sending industrial stocks soaring. But note this: in his fiscal sea change, rearming will not be accompanied by any cuts to German social spending.How about Britain? Our government has announced no change to fiscal policy. Living within our self-imposed straitjacket, our rearming will be paid for by cuts to aid, benefits and most departments, as Rachel Reeves this week sends her plans to the Office for Budget Responsibility to prove the books are balanced. Yet the promises the government has made are impossible to keep: no more borrowing, no more tax rises and no return to austerity. These are terrible choices – the aid cut already breaks a manifesto pledge – destroying trust whichever way Labour turns. But which is the least bad?A copy of Duncan Grant’s portrait of John Maynard Keynes hangs by my desk, a reminder to reach for his 1940 prescription How to Pay for the War, a book that spelled out the necessary financial sacrifices of the time. Emergency action needed then was draconian, rapidly increasing production while drastically reducing consumption, introducing rationing and diverting everything to the war effort. In comparison, what’s needed in this new emergency is a pinprick, to raise the 3% of GDP for defence spending that Starmer is aiming for. Take just this one measure: in a disgraceful (and failed) act of crude election bribery, Jeremy Hunt cut 4p off employees’ national insurance. Restoring that would cover the cost of this extra defence spending alone, says Ben Zaranko of the Institute for Fiscal Studies; so would 2p more on income tax for all.Labour’s Treasury team winces at the very thought of any further tax rises, after the walloping Reeves got for the £40bn tax rise in October’s budget. They are jumpy: remember Liz Truss’s mini-budget, maxi-catastrophe, they say. Look how even small tax changes such as the farmers’ inheritance tax can create a storm; some policies make absolute sense in economic and fairness terms, but crash politically. Besides, tax rises that cut people’s spending money risk stunting growth, they say – but then so do cuts to public spending. Borrow more? That adds to the mammoth £100bn a year we spend servicing existing debt, they say. But we are now on the hunt for the least-worst option – and Britain still pays less tax than similar countries.Starmer has risen to the needs of the hour. But he has yet to address his citizens on what rearming means, and what it requires of them. We like to think of ourselves as warlike, and at the ready. We are good at displays of national pride and national parades, with a four-day celebration planned for the 80th anniversary of VE day in May. But tax and financial sacrifice were essential parts of that victory. The alternative – miserable cuts to benefits for the weakest, and stripping yet more from threadbare stricken public services – is the worst of all the bad options. In our finest hour, Britain shed its traditional tax-phobia. If ever there was a moment to stiffen the sinews and summon up the taxes, it is now: for the defence of the realm.

      Polly Toynbee is a Guardian columnist More

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      Read the signs of Trump’s federal firings: AI is coming for private sector jobs too

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      The Trump administration recently announced that it would be laying off approximately 6,700 workers at the Internal Revenue Service, about 8% of the people employed by the agency. Tens of thousands of federal employees at other agencies are also losing their jobs.The timing could not be worse. We’re in the middle of the tax season with corporations and individuals facing filing deadlines in March and April. Millions of returns will need to be processed. Refunds will be due. Questions will need to be answered. But that’s not all.In just a few short months, Congress will be debating – and probably passing – new rules that will significantly change our tax laws. Republicans are pushing to either extend or make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act, most of which expire at the end of this year. There are proposals to eliminate taxes on tips, social security income and overtime wages. The Democrats will be fighting some of these provisions, arguing their effect on future deficits. Regardless, there will be an enormous amount of change to rules, forms and guidance that will need to be made by the IRS.The remaining employees at the agency, already demoralized and now seriously short-staffed, will now be asked to handle this looming workload. Taxpayers and their accountants will need to be patient. I can already foresee my profession’s future frustration as they wait for guidance on a myriad of tax changes that will affect their clients. After barely recovering from all the disruptions caused by the pandemic, these layoffs are sure to set things back.But let’s not pretend this isn’t part of a wider trend.We all know the technology already exists to do much of the work that many IRS employees do now. My clients already use tech platforms to automate their accounts payment and payments. These systems – which leverage AI and optical character recognition – can very accurately (and affordably) scan, read and extract data from any document and ensure that the information is integrated into their accounting systems, where payments are automatically scheduled for review and disbursement. Considering that most of the tax returns filed are done in a similar fashion – and are mostly routine – it seems obvious that similar systems could be doing the same functions, which would probably eliminate a much greater percentage of workers who have already been chopped by the current administration.Look what technology is doing elsewhere. The financing platform Klarna announced last summer it was laying off about 2,000 workers – half of its workforce – as a result of its new AI customer service system that did their work instead. Morgan Stanley, JP Morgan Chase, UBS and other Wall Street firms are building AI-based systems that are eliminating the need for investment analysts, wealth managers and other human workers. Google, Ikea, Salesforce and a number of other firms are rapidly replacing their workers with AI systems. Mark Zuckerberg has publicly said that AI applications will be doing the work of mid-level engineers at Meta this year.About $80bn was allocated to the IRS under Joe Biden’s Inflation Reduction Act to “modernize” tax collection. Government being the government, I’m sure that progress has so far been slower than it should be. But if you’re working at the IRS, or any federal agency, do you not see the writing on the wall? And if you’re working in customer service, marketing, accounting or any of these jobs in the private sector do you also not see what’s happening?The firing of federal workers is a preview of what’s about to happen in the corporate world. CEOs at numerous companies have already demonstrated that technology can do the work of people and replace them. And they’re just getting started. The tech companies like to say that AI will “work alongside” humans or “increase employees’ productivity” but that’s nonsense. Like the federal workers, many in the private sector are about to be replaced too. More

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      Email shows that Musk ally is moving to close office behind free tax filing program at IRS

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      An Elon Musk ally installed in the US government said in a late night email going into Saturday that the office behind a popular free online tax filing option would be shuttered – and its employees would be let go.The 18F office within the General Services Administration (GSA) created the IRS Direct File program that allows for free online tax filings. It has been a frequent target of Musk, and one of the billionaire businessman’s close associates who holds a key position in the GSA informed staffers that the agency would close 18F in an email to staffers that arrived around 1am on Saturday morning.According to the message, the firings were in support of the executive order Donald Trump issued after beginning his second US presidency, which has empowered Musk’s so-called “department of government efficiency” (Doge) taskforce to cut federal workers.“The 18F Office has been identified as part of this phase of the GSA’s Reduction in Force (RIF) as non-critical,” the email states. “This decision was made with explicit direction from the top levels of leadership within both the Administration and GSA. There are no other TTS programs impacted at this time, however we anticipate more change in the future.”The email came from Thomas Shedd, a 28-year-old former Tesla software engineer who took over in late January as head of the GSA’s Technology Transformation Services. It’s not immediately clear what may happen to 18F programs such as the direct filing system or the total number of workers that the GSA is firing from the office, which has about 90 employees.Musk claimed in early February that he had “deleted” 18F while responding on X to a rightwing influencer who accused the agency of being “far left”. Musk didn’t elaborate on his statement, which caused confusion as the 18F website and services like its direct file program remained online.In addition to working on the free tax return program, the 18F office worked across government agencies to update technology and launch new software products. It worked on more than 31 projects across different government agencies in 2024, including the Cybersecurity and Infrastructure Security Agency (Cisa). It has been part of the GSA since 2014.Shortly after taking over TTS, Shedd told staffers that he planned to run the agency like a tech startup and that he wanted to implement artificial intelligence programs throughout the government. The GSA is one of the major agencies that Musk and his allies have taken over as part of their wider and potentially illegal dismantling of the federal government, which has cut services such as humanitarian aid and disease prevention while attempting to reshape agencies along ideological grounds. More

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      The Guardian view on Starmer’s aid cuts: they won’t buy security, but they will undermine it | Editorial

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      Politics is about choices. Some are forced on governments by circumstance. Others are self‑imposed. Labour’s decision to cut the aid budget to “pay” for increased defence spending is firmly in the latter category. It is also wrong – forcing the world’s poor to pay for Britain’s safety. This is a false economy. Cutting aid will make the world more unstable, not less. The very crises that fuel conflict – poverty, failed states, climate disasters and mass displacement – will only worsen with less development funding. Labour’s logic is self‑defeating: diverting money from aid to defence does not buy security; it undermines it.The numbers tell the story. Despite government attempts to inflate the amounts involved, the extra £5bn‑£6bn for defence is tiny relative to Britain’s GDP. The UK could easily absorb this through borrowing – especially in a global financial system where sterling is heavily traded – or, if the government prefers, through a modest wealth tax. Yet Sir Keir Starmer has chosen to frame this as a zero-sum game, where aid must give way to security. Why? Because this is not about economic necessity – it’s about political positioning. Labour wants to prove that it can be fiscally disciplined even when the numbers don’t demand it. It wants to neutralise Tory attacks, even when the real battle is over priorities, not affordability.It is also a move that aligns with Donald Trump’s worldview. The US president wants to close down the US government’s main overseas aid agency, treating it as an expensive indulgence rather than a pillar of foreign policy. Sir Keir is set to go to Washington this week. A UK prime minister that echoes Mr Trump’s “America first” instincts on defence and aid may find the meeting more congenial. If so, Sir Keir may be taking the idea that “the meek shall inherit the earth” a little too literally.Labour doesn’t just believe in fiscal discipline, it believes that it must believe in fiscal discipline and it constructs a justification for that belief. The problem is this: by accepting Conservative trade‑offs, Labour locks itself into an orthodoxy that it may later need to break. In a volatile world, Britain – outside the EU – must boost high-value exports and cut reliance on fragile supply chains. Even under Joe Biden, the UK was kept out of the US-EU Trade and Technology Council, which strengthened transatlantic industrial policy. Yet when does Downing Street admit Britain’s real limit is productive capacity – not budget deficits?Britain’s fiscal constraint is artificial, but its resource constraints are real. Energy, food and manufacturing are matters of national security, not just market functions. Without investment, dependence on key imports makes Britain vulnerable to supply-chain shocks and price inflation. That should make the announcements by Labour’s Ed Miliband and Steve Reed matter. If every pound spent requires a cut elsewhere, neither would have had much to say.Sir Keir often presents himself as a pragmatist rather than an ideologue – claiming to be adapting to circumstances rather than adhering to dogma. But such pragmatism is itself a belief system, one that treats capitalism’s rules as unchangeable, markets as beyond politics, and history as a one‑way street where past mistakes justify permanent, crippling caution. In doing so, he isn’t just rejecting alternatives – he’s rewriting history to suggest they were never an option to begin with.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

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      It’s time for Americans to withhold their taxes | Judith Levine

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      Political power boils down to two things: votes and money. But when money buys presidents, senators and judges, votes are merely the sales receipts. What’s left is money, and the purpose of power is to get more of it.Trump’s non-billionaire followers appear thrilled that Elon Musk and his so-called “department of government efficiency” are burning down the government. “Imagine if Trump hadn’t met and talked with Elon Musk that all this progress on efficiency may not be taking place or at such a fast pace needed before the midterms,” comments holy666 on a Fox News story about the mass layoffs of federal employees.Firings at the IRS elicit particular glee. Writes EnemyCitizen: “A beautiful thing about Mr Trump’s approach is that internal revenue will slow down and Congress will have to sober up and stop passing appropriations bills that apply our hard-earned money to frivolous political agendas. No more blank checks, Congress!”In fact, what the megalomaniacal multibillionaire is destroying is everything – minus the policing functions, of course – that we pay taxes for, including such frivolous agendas as food inspection, flood mitigation and Medicare. This is how kleptocracies work. Taxes are collected from the hoi polloi. The more benign government functions – housing the poor, postponing climate apocalypse – are abolished. But the rest of these functions do not entirely disappear. Rather, it is farmed out to private enterprise, which undertakes what it’s paid to do with minimum expense and maximum profit (and we all know corporations never commit waste, fraud or abuse).Watchdogs are eliminated, bribery is legalized. The most corrupt carry off the greatest rewards. And bereft of revenue, social services wither, the infrastructure crumbles, and the prisons fill with the destitute and the resistant.Maga wants to starve the bureaucracy. But it still wants money. And with the wealthiest awaiting gigantic tax breaks, they need it from the rest of us. With the Internal Revenue Service in effect transformed into a shell corporation laundering the money of the ultra-rich, why should we pay taxes?The IRS is being speedily organized for this rerouting. Doge is axing as many as 15,000 law-abiding and knowledgeable civil servants. It is trying to coerce the agency to give Elon’s AI-wielding AV squad unfettered access to the system containing the personal and financial data of every American taxpayer, small business and non-profit.Not only would this arrangement provide an armory of intelligence to be deployed against the president’s enemies – according to a lawsuit filed by taxpayer advocates, unions and small business alliances, it would give Musk access to his rivals’ profit and loss statements, payrolls, tax records and information about IRS investigations into their (or his own) suspected tax fraud. “No other business owner on the planet has access to this kind of information on his competitors,” assert the plaintiffs, “and for good reason.”These are all good reasons to withhold your taxes.Can the tactic work? Is it right? Morally and politically motivated tax nonpayment has an honorable, if not always successful, history. After the Roman empire’s destruction of the Jerusalem temple in 70 AD Jewish people refused to pay Rome’s “temple tax”. Rome responded by destroying more temples. Gandhi’s salt tax protest, on the other hand, was the first step toward India’s independence from the British empire. The American Revolution was a tax revolt, and that worked – although some colonists resisted taxes levied by the revolutionaries and, after independence, the states as well.More recently, American opponents of wars, nukes and abortion have refused to pay all or portions of their taxes in protest. Many went to prison for it. In Civil Disobedience, Thoreau wrote of weighing the benefits and costs of any given action. He believed all taxation was illegitimate as long as the US condoned slavery. “If [the injustice] is of such a nature that it requires you to be the agent of injustice to another, then I say, break the law,” he concluded.One of the diabolical features of an anti-state state like our current regime is its ability to turns acts of resistance against the state against themselves. Principled prosecutors and agency heads resign rather than carry out the president’s illegal orders – leaving only Maga flunkies in their places. Civil servants quit rather than pervert the services or science they’ve devoted their careers to – leaving the work unguarded and the workforce decimated, precisely as the wrecking crew intends.So it is with tax resistance. Every dollar that does not come into Washington’s coffers is justification to cut another dollar. You may remember that the vanguard of 21st century far right populism was the Tea party, an anti-tax movement.In the New Republic, Liza Featherstone points out that the destruction of popular government programs is not “a goofy misstep on this administration’s part. Rather, it’s exactly the point.” Whether firing park rangers, defunding daycare centers, or deep-sixing job-creating clean-energy projects in red states, the programs’ “popularity is precisely what the Trump-Musk administration dislikes about them. For anti-government ideologues, it’s important that people not have good experiences with the government.”And if people have bad experiences with the government – if they contract bird flu because the Centers for Disease Control and Prevention no longer have the wherewithal to control and prevent disease; if bridges collapse because the funds to repair them are cut off – well, there’s proof that the government can’t do anything right, and deserves to be destroyed.In fact, after it outsources the government, the regime would be smart to keep calling it the government. When IRS.com loses a taxpayer’s refund and assigns a bot to sort out the problem, the taxpayer will blame IRS.gov.Thanks to intentional staff shortages at the IRS, your missing tax payment might go unnoticed, just as the Trump family’s multibillion-dollar fraud escaped the agency’s auditors for decades. But if tax evasion is a secretive act, tax resistance is civil disobedience, a public, political act. The reason to withhold your taxes is not to cheat the government of much-needed funds. It is not even to cheat the crooks now running the country, satisfying as that may be. It is to expose the criminality of what is being done – and not done – with the money the state has a legal and moral obligation to collect and then to distribute, to serve all the people.

      Judith Levine is a Brooklyn journalist and essayist, a contributing writer to the Intercept and the author of five books More