Tax and spending

Subterms

    Latest story

    163 Shares109 Views

    Biden budget plan details his vision: tax breaks for families and lower deficit

    by

    Joe Biden took another swipe at Donald Trump on Monday as the president revealed his $7.3tn budget proposal for 2025 that offers tax breaks for families, lower healthcare costs, a smaller federal deficit and higher taxes on corporations and the wealthy.Biden made the remarks in an afternoon appearance in Goffstown, on the outskirts of Manchester, New Hampshire. Referring to the former president as “my predecessor”, as he did repeatedly during last week’s fiery State of the Union speech, Biden slammed Trump for “making $2tn in tax cuts” during his single term, and “expanding the federal deficit”.“I’m not anti-corporation. I’m a capitalist man. Make all the money you want. Just begin to pay your fair share in taxes,” he said. “A fair tax code is how we invest in things that make this country great.”Unlikely to pass the House and Senate to become law, the proposal for fiscal 2025 is an election-year blueprint about what the future could hold if Biden and enough of his fellow Democrats win in November. The president and his aides previewed parts of his budget going into last week’s State of the Union address, with plans to provide the fine print on Monday.If the Biden budget became law, deficits could be pruned $3tn over a decade. Parents could get an increased child tax credit. Homebuyers could get a tax credit worth $9,600. Corporate taxes would jump upward, while billionaires would be charged a minimum tax of 25%.Biden also wants Medicare to have the ability to negotiate prices on 500 prescription drugs, which could save $200bn over 10 years.The president also called on Congress to apply his $2,000 cap on drug costs and $35 insulin to everyone, not just people who have Medicare. He is also seeking to make permanent some protections in the Affordable Care Act that are set to expire next year.All of this is a chance for Biden to try to define the race on his preferred terms, just as the all-but-certain Republican nominee, Trump, wants to rally voters around his agenda.Trump, for his part, would like to increase tariffs and pump out gushers of oil. He called for a “second phase” of tax cuts as parts of his 2017 overhaul of the income tax code would expire after 2025. The Republican has also said he would slash government regulations. He has also pledged to pay down the national debt, though it is unclear how without him detailing severe spending cuts.“We’re going to do things that nobody thought was possible,” Trump said after his wins in last week’s Super Tuesday nomination contests.The Republican US presidential candidate, speaking in an interview on CNBC, also called for action on popular US entitlement programs, including cuts, and indicated he was not likely to curb use of cryptocurrencies.Asked about concerns over increased political polarization on the nation’s financial stability, Trump said he was concerned about Fitch’s 2023 downgrade but dismissed the credit rating downgrade’s ties to the January 6 riot at the Capitol.Trump’s comments are his first extended remarks on his economic plans since he became the party’s likely nominee following last week’s “Super Tuesday” primary elections, setting up a rematch with President Joe Biden in November.skip past newsletter promotionafter newsletter promotionHis tariff plan has spurred talk of inflation, and US treasury secretary Janet Yellen has said it would raise costs for American consumers.“I think taxes could be cut, I think other things could happen to more than adjust that. But I’m a big believer in tariffs,” Trump told CNBC, saying they help American industries when they are “being taken advantage of” by China and other nations.“Beyond the economics, it gives you power in dealing with other countries,” he said, adding that he was not concerned about any possible retaliatory tariffs if he were to regain the White House.Asked about Medicare, Social Security and Medicare programs and the nation’s spending and deficits, Trump told CNBC: “There is a lot you can do in terms of entitlements in terms of cutting and in terms of also the theft and the bad management.”House Republicans on Thursday voted their own budget resolution for the next fiscal year out of committee, saying it would trim deficits by $14tn over 10 years. But their measure would depend on rosy economic forecasts and sharp spending cuts, reducing $8.7tn in Medicare and Medicaid expenditures. Biden has pledged to stop any cuts to Medicare.“The House’s budget blueprint reflects the values of hard-working Americans who know that in tough economic times, you don’t spend what you don’t have – our federal government must do the same,” House Speaker Mike Johnson, Republican of Louisiana, said in a statement.Meanwhile, Congress is still working on a budget for the current fiscal year. On Saturday, Biden signed into law a $460bn package to avoid a shutdown of several federal agencies, but lawmakers are only about halfway through addressing spending for this fiscal year. More

    More stories

    • 263 Shares139 Views

      in US Politics

      Private jets are awful for the climate. It’s time to tax the rich who fly in them | Edward J Markey

      by

      The climate crisis is not in transit, it’s arrived at the gate. It’s in our skies, our water, and our land – with record-shattering heat waves, increasingly severe wildfires and flooding from superstorms and rising seas.We have no time for delays. Tackling this crisis and protecting frontline environmental justice communities will take all of us. And the tax-dodging ultra-wealthy need to stop fueling the problem and start supporting first-class solutions.That’s why, this July, I introduced the Fueling Alternative Transportation with a Carbon Aviation Tax (Fatcat) Act with Congresswoman Nydia Velázquez.Private air travel is the most energy-intensive form of transportation. For each passenger, private jets pollute as much as 14 times more than commercial flights and 50 times more than trains. Despite their sky-high emissions, private air travel is taxed considerably less than commercial air travel.My legislation changes that. Because the 1% should not get a free ride while destroying our environment.At the moment, billionaires and the ultra-wealthy are getting a bargain, paying less in taxes each year to fly private and contribute more pollution than millions of drivers combined on the roads below. Just one hour of flying private negates the climate benefits of driving an electric car for an entire year. That is unfair and it is unacceptable.For the sake of our environment, it is time to ground these fat cats and make them pay their fair share, so that we can invest in building the energy-efficient and clean public transportation that our economy and communities across the country desperately need. We cannot continue to ask frontline communities – disproportionately low-income, rural, immigrant, Black and brown Americans who are bearing the weight of the climate crisis – to subsidize billionaires jet-setting the globe.Our legislation would increase fuel taxes for private jet travel from the current $0.22 to nearly $2 a gallon – the equivalent of an estimated $200 a metric ton of a private jet’s CO2 emissions – and remove existing fuel tax exemptions for private flight activities that worsen the climate crisis, like oil or gas exploration.The revenue generated by the Fatcat Act would be transferred to the Airport and Airway Trust Fund and a newly created federal Clean Communities Trust Fund to support air monitoring for environmental justice communities and long-term investments in clean, affordable public transportation across the country – including passenger rail and bus routes near commercial airports.To fully tackle the climate crisis at the scale that is required, we need to ensure that those who are fueling this problem are held accountable for contributing to the solution. It is, of course, the same logic that should, but sadly does not, apply to our tax code.If Jeff Bezos, Elon Musk, Mark Zuckerberg, and countless Wall Street hedge fund managers want to fly private jets, the least they can do is pay their fair share in taxes to compensate for the damage to our environment and the wear on our infrastructure. It’s unconscionable that they be allowed to continue to pay pennies on the dollar to pollute our environment as Americans suffer through the hottest days in an estimated 125,000 years. Everyday Americans should not have to pay for their excess.And let’s be clear: this is an issue of economic and environmental justice. The wealthiest 1% globally are responsible for more than twice as much carbon dioxide pollution as the bottom 50%. But the burden of that pollution gets passed along to people already struggling.A billionaire who takes to the skies in a private jet isn’t going to feel the hardship of paying a sky-high air conditioning or electric bill. The ultra-wealthy who own their own airplanes aren’t going to feel the hardship of breathing dirty air.We are approaching a dangerous tipping point in our battle against the climate crisis. This summer’s brutal weather is just a preview of what is to come. We all need to step up to do our part to address this crisis. Especially jet-setting billionaires.
      Edward J Markey is a US senator from Massachusetts More

    • 150 Shares109 Views

      in US Politics

      Wisconsin governor slashes tax cuts and boosts school funding – for centuries

      by

      Wisconsin’s governor, Tony Evers, signed off on a two-year spending plan on Wednesday after gutting a Republican tax cut and using his broad veto powers to increase school funding for centuries.Evers angered Republicans with both moves, with some saying the Democratic governor was going back on deals he had made with them.Wisconsin governors have broad partial veto power and Evers got creative with his use of it in this budget, which is the third passed by a Republican legislature that he’s signed.He reduced the GOP income tax cut from $3.5bn to $175m, and did away entirely with lower rates for the two highest-earning brackets. He also edited the plan to increase how much revenue K-12 public schools can raise per student, by $325 a year until 2425.Evers, a former state education secretary and teacher, had proposed allowing revenue limits to increase with inflation. Under his veto, unless it’s undone by a future legislature and governor, Evers said schools will have “predictable long-term spending authority”.“There are lots of wins here,” Evers said of the budget at a signing ceremony surrounded by Democratic lawmakers, local leaders, members of his cabinet and others.Republicans blasted the vetoes.The Republican assembly speaker, Robin Vos, said allowing the school revenue limit to increase effectively forever would result in “massive property tax increases” because schools will have the authority to raise those taxes if state aid isn’t enough to meet the per-pupil cost. He also said scaling back the tax cut put Wisconsin at an economic disadvantage to neighboring states that have lower rates.Vos did not say if Republicans would attempt veto overrides, an effort that is almost certain to fail because they would need Democratic votes in the assembly to get the two-thirds majority required by state law.Republicans proposed tapping nearly half of the state’s projected $7bn budget surplus to cut income taxes across the board and reduce the number of tax brackets from four to three.Evers kept all four brackets. The remaining $175m in tax cuts over the next two years is directed to the lowest two tax rates, paid by households earning less than $36,840 a year or individuals who make less than $27,630. Wealthier payers will also benefit from the cuts but must continue to pay higher rates on income that exceeds those limits.Evers was unable to undo the $32m cut to the University of Wisconsin, which was funding that Republicans said would have gone toward diversity, equity and inclusion – or DEI – programming and staff. The budget Evers signed does allow for the university to get the funding later if it can show it would go toward workforce development and not DEI.Evers previously threatened to veto the entire budget over the UW cut. But on Wednesday, he used his partial veto to protect 188 DEI positions in the university system that were slated for elimination under the Republican plan.Another of Evers’ vetoes removed a measure that would have prohibited Medicaid payments for gender-affirming care. The governor accused Republicans of “perpetuating hateful, discriminatory, and anti-LGBTQ policies and rhetoric” with the proposal.No Democratic lawmaker voted for the budget, but most stopped short of calling for a total veto.Evers ignored a call from 15 liberal advocacy and government watchdog groups that had urged him to “fight like hell for our collective future” and veto the entire budget, which they argued would further racial and economic inequality.Evers said vetoing the entire budget would have left schools in the lurch and meant rejecting $125m in funding to combat water pollution caused by so-called “forever chemicals”, also known as PFAS, along with turning down $525m for affordable housing and pay raises for state workers.No governor has vetoed the budget in its entirety since 1930. This marks the third time that Evers has signed a budget into law that was passed by a Republican-controlled legislature. In 2019, he issued 78 partial vetoes and in 2021 he made 50. That year, Evers took credit for the income tax cut written by Republicans and used it as a key part of his successful 2022 re-election campaign.This year he made 51 partial vetoes.The budget also increases pay for all state employees by 6% over the next two years, with higher increases for guards at the state’s understaffed state prisons. More

    • 200 Shares159 Views

      in US Politics

      ‘They can survive just fine’: Bernie Sanders says income over $1bn should be taxed at 100%

      by

      The US government should confiscate 100% of any money that Americans make above $999m, the leftwing independent senator Bernie Sanders said late last week.Sanders expressed that belief in an exchange on Friday evening with the host of Who’s Talking to Chris Wallace? on HBO Max.Wallace had asked Sanders about the general assertion in his book It’s OK to Be Angry About Capitalism that billionaires should not exist.“Are you basically saying that once you get to $999m that the government should confiscate all the rest?” Matthews asked the US senator from Vermont, who is an independent but caucuses with Democrats and has helped them attain their current slim majority in the upper congressional chamber.“Yeah,” Sanders replied. “You may disagree with me but, fine, I think people can make it on $999m. I think that they can survive just fine.”Wallace had earlier mentioned how the late Sam Walton could make the giant retail chain Walmart the largest single private employer in the US thanks to his family’s net worth of about $225bn. Sanders countered that Walmart in many cases pays starvation wages to its 1.2 million employees despite how rich the Waltons are.“Many of their workers are on Medicaid or food stamps,” Sanders said, referring to forms of government assistance for which low-income Americans can qualify. “In other words, taxpayers are subsidizing the wealthiest family in the country. Do I think that’s right? No, I don’t.”Nonetheless, Sanders said his comments on the matter weren’t a personal attack against the Waltons or other billionaires.“It is an attack upon a system,” Sanders said. “You can have a vibrant economy without [a few] people owning more wealth than the bottom half of American society” combined.He added that if he were in charge: “If you make a whole lot of money, you’re going to pay a whole lot of money.”Sanders’s remarks are unlikely to ingratiate him with proponents of the US political right who already dismiss him as a communist. But they have never been a part of his base of supporters.skip past newsletter promotionafter newsletter promotionThe 81-year-old has held one of Vermont’s US Senate seats since 2007. He had spent the previous 16 years representing the state in the US House of Representatives, helping him become the longest-serving independent in American congressional history.Sanders, who has previously run unsuccessfully to become a Democratic presidential candidate, published It’s OK to Be Angry About Capitalism in February. In it, he notes that one-tenth of 1% of the US population owns 90% of the nation’s wealth, among other things.He also argues that “unfettered capitalism … destroys anything that gets in its way in the pursuit of profits”, including the environment, democracy and human rights.On Friday, Sanders told Wallace that he believes “people who work hard and create businesses should be rich”, but the concept of some being billionaires offended him deeply when a half-million Americans are homeless and 85 million of them cannot afford to buy health insurance. More

    • 213 Shares139 Views

      in US Politics

      The US ultra-rich justify their low tax rates with three myths – all rubbish | Robert Reich

      by

      The US ultra-rich justify their low tax rates with three myths – all of them rubbishRobert ReichA record share of the nation’s wealth is in the hands of billionaires, who pay a lower tax rate than the average American. This is indefensible On Tuesday, the Congressional Budget Office released a study of trends in the distribution of family wealth between 1989 and 2019.Over those 30 years, the richest 1% of families increased their share of total national wealth from 27% to 34%. Families in the bottom half of the economy now hold a mere 2%.Meanwhile, a record share of the nation’s wealth remains in the hands of the nation’s billionaires, who are also paying a lower tax rate than the average American.How do the ultra-wealthy justify their wealth and their low tax rates? By using three myths – all of which are utter rubbish.The first is trickle-down economics.Billionaires (and their apologists) claim that their wealth trickles down to everyone else as they invest it and create jobs.Really? For more than 40 years, as wealth at the top has soared, almost nothing has trickled down. Adjusted for inflation, the median wage today is barely higher than it was four decades ago.Trump provided a giant tax cut to the wealthiest Americans, promising it would generate $4,000 increased income for everyone else. Did you receive it?In reality, the super-wealthy don’t create jobs or raise wages. Jobs are created when average working people earn enough money to buy all the goods and services they produce, pushing companies to hire more people and pay them higher wages.The second myth is the “free market”.The ultra-rich claim they’re being rewarded by the impersonal market for creating and doing what people are willing to pay them for.The wages of other Americans have stagnated, they say, because most Americans are worth less in the market now that new technologies and globalization have made their jobs redundant.Baloney. Even if they’re being rewarded, there’s no reason why the “free market’ would reward vast multiples of what the rich were rewarded with decades ago.The market can induce great feats of invention and entrepreneurship with lures of hundreds of thousands or even millions of dollars – not billions.As to the rest of us succumbing to labor-replacing globalization and labor-saving technologies, no other advanced nation has nearly the degree of inequality found in the United States, yet all these nations have been exposed to the same forces of globalization and technological change.In reality, the ultra-wealthy have rigged the so-called “free market” in the US for their own benefit. Billionaires’ campaign contributions have soared from a relatively modest $31m in the 2010 elections to $1.2bn in the most recent presidential cycle – a nearly 40-fold increase.What have they got for their money? Tax cuts, freedom to bash unions and monopolize markets and government bailouts. Their pockets have been further lined by privatization and deregulation.The third myth is that they’re superior human beings.They portray themselves as “self-made” rugged individuals who “did it on their own” and therefore deserve their billions.Bupkis. Six of the 10 wealthiest Americans alive today are heirs to fortunes passed on to them by wealthy ancestors.Others had the advantages that come with wealthy parents.Jeff Bezos’s garage-based start was funded by a quarter-million-dollar investment from his parents. Bill Gates’s mother used her business connections to help land a software deal with IBM that made Microsoft. Elon Musk came from a family that reportedly owned shares of an emerald mine in southern Africa.Don’t fall for these three myths.Trickle-down economics is a cruel joke.The so-called free market has been distorted by huge campaign contributions from the ultra-rich.Don’t lionize the ultra-rich as superior “self-made” human beings who deserve their billions. They were lucky and had connections.In reality, there is no justification for today’s extraordinary concentration of wealth at the very top. It’s distorting our politics, rigging our markets and granting unprecedented power to a handful of people.The last time America faced anything comparable was at the start of the 20th century.In 1910, former president Theodore Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power” could destroy American democracy.Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916, and the capital gains tax in 1922.Since that time, both have eroded. As the rich have accumulated greater wealth, they have also amassed more political power – and have used that political power to reduce their taxes.Teddy Roosevelt understood something about the American economy and the ultra-rich that has now re-emerged, even more extreme and more dangerous. We must understand it, too – and act.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
      TopicsUS politicsOpinionInequalityTax and spendingJeff BezosElon MuskBill GatescommentReuse this content More

    • 188 Shares159 Views

      in US Politics

      A global agreement on taxing corporations is in sight – let’s make sure it happens

      by

      For more than four years, France, Germany, Italy and Spain have been working together to create an international tax system fit for the 21st century. It is a saga of many twists and turns. Now it’s time to come to an agreement. Introducing this fairer and more efficient international tax system was already a priority before the current economic crisis, and it will be all the more necessary coming out of it.Why? First, because the crisis was a boon to big tech companies, which raked in profit at levels not seen in any other sector of the economy. So how is it that the most profitable companies do not pay a fair share of tax? Just because their business is online doesn’t mean they should not pay taxes in the countries where they operate and from which their profits derive. Physical presence has been the historical basis of our taxation system. This basis has to evolve with our economies gradually shifting online. Like any other company, they should pay their fair share to fund the public good, at a level commensurate with their success.Second, because the crisis has exacerbated inequalities. It is urgent to put in place an international tax system that is efficient and fair. Currently, multinationals are able to avoid corporate taxes by shifting profits offshore. That’s not something the public will continue to accept. Fiscal dumping cannot be an option for Europe, nor can it be for the rest of the world. It would only lead to a further decline in corporate income tax revenues, wider inequalities and an inability to fund vital public services.Third, because we need to re-establish an international consensus on major global issues. The Organisation for Economic Co-operation and Development, with the support of our countries, has been doing exceptional work in the area of international taxation for many years. The OECD has put forward fair and balanced proposals on both subjects: the taxation of the profit of the most profitable multinationals, notably digital giants (Pillar 1), and the minimal taxation (Pillar 2). We can build on this work. For the first time in decades, we have an opportunity to reach a historic agreement on a new international tax system that would involve every country in the world. Such a multilateral agreement would signal a commitment to working together on major global issues.With the new Biden administration, there is no longer the threat of a veto hanging over this new system. The new US proposal on minimal taxation is an important step in the direction of the proposal initially floated by our countries and taken over by the OECD. The commitment to a minimum effective tax rate of at least 15% is a promising start. We therefore commit to defining a common position on a new international tax system at the G7 finance ministers meeting in London today. We are confident it will create the momentum needed to reach a global agreement at the G20 in Venice in July. It is within our reach. Let’s make sure it happens. We owe it to our citizens.
      Nadia Calviño, second deputy prime minister of Spain, is the country’s economy minister. Daniele Franco is minister of economy and finance in Italy. Bruno Le Maire is France’s minister of economy, finance and recovery. Olaf Scholz is German vice-chancellor and minister of finance More

    • 188 Shares139 Views

      in US Politics

      The Guardian view on Boris Johnson's Cop26: ask if GDP growth is sustainable | Editorial

      by

      Saving the planet ought to be a goal for, not a cost to, humanity. Yet this insight appears lost in the discussion about the climate emergency. Last week, it emerged that the Treasury was thinking about levying a UK-wide carbon tax. This approach, it was suggested, could be sold as a way of “raising revenue while cutting emissions”. Properly targeted taxes can change behaviour. But “revenue raising” green policies invariably end up being valued by the amount of taxes they produce rather than on their effectiveness in combating the climate crisis. UK governments have frozen fuel duties for a decade because it is politically easier to rake in cash than deter driving.A carbon tax is superficially appealing. The Treasury desires taxes to offset government spending. No 10 would like to align, rhetorically, with the green agenda. But without careful thought a carbon levy could backfire. A maladroit attempt to tax fuel on environmental grounds kindled France’s gilets jaunes (yellow vests) protests.By law, Britain has to reduce its net carbon emissions to zero by 2050. To get there, life in the country will have to change. For example, for the next stage of a net-zero transition, the public should shift away from heating their homes with gas boilers. Raising taxes on voters until they squeal and switch to lower carbon intensive heating systems would not be popular or necessarily progressive. A better strategy would be for the state to finance new green technologies and to regulate energy companies to recoup the investment. The Treasury dislikes spending and then taxing. Rightwing governments resist interfering in markets. But a focus on ecological sustainability would provide a reason to act in such a way.The UK government requires an environmental sense of purpose that specifies the appropriate ends for economic activity. The economist Kate Raworth has pointed out that a failure to do so has left a gap, which politicians fill by maximising national income. They are not obliged to ask if additional economic growth is sustainable. Governments ought to confront whether the growth of real GDP is too destabilising for global ecosystems. For decades the planetary boundary for resource use has been exceeded because conventional economics has encouraged political leaders to concentrate on goals that are largely irrelevant to human welfare.A confluence of world events provides a rare opportunity to change such thinking. Owing to the pandemic, global greenhouse emissions are forecast to drop by about 5% this year, compared with 2019. If sustained this would be the largest year-to-year drop since the second world war, and it could mark a turning point. If Joe Biden wins the US presidential election the world’s top three emitters, China, the US and the EU, which account for nearly half of global emissions, should all have mid-century net-zero targets, placing the 1.5˚C warming limit of the Paris agreement within reach. Preparations for the postponed Cop26 climate summit, to be held in Glasgow, are the ideal way for Britain to take a lead in a global discussion. Boris Johnson should use the platform to frame UK policy proposals boldly in terms of their impact on people and the planet, not just the economy. More

    • 225 Shares199 Views

      in US Politics

      Biden tells Trump 'you are the worst president America has ever had' in battle over taxes – video

      by

      Play Video

      2:59

      During the first presidential debate, Donald Trump was pressed on the New York Times story over his tax returns, which showed he paid only $750 in federal income taxes in 2016 and 2017. The president claimed he had paid “millions” in income taxes and said he would release his tax returns soon, which he has been saying since 2015. 
      Joe Biden said Trump ‘does take advantage of the tax code’ and ‘pays less tax than a schoolteacher’. Trump shrugged off the criticism, saying all business leaders do the same ‘unless they are stupid’. The exchange escalated with Biden telling his rival: ‘You are the worst president America has ever had’
      Donald Trump refuses to condemn white supremacists at presidential debate
      Moderator Chris Wallace criticised as Trump derails debate

      Topics

      US elections 2020

      Donald Trump

      Trump administration

      Joe Biden

      US taxation

      Tax and spending

      US politics More