While the federal government’s greed has been temporarily appeased after pocketing your tax money, it won’t be enough for Team Biden. It never is. They may be swimming in dollar bills like Scrooge McDuck, but Democrats have never met a dime they didn’t want to spend. Within a few months, your hard-earned money will have been sent to Ukraine or spent on the next big climate change fiasco.
President Donald Trump can’t stop the elite spending spree in the White House while he is tied to a courtroom in New York, but he seems to be looking at another round of tax cuts for the long-suffering middle class if he’s elected.
What these tax cuts could look like is anyone’s guess since Trump has yet to commit to the idea.
According to a source familiar with the discussions, Trump’s economic advisers are contemplating various concepts, including raising the standard deduction on year-end tax returns and reducing the marginal income tax rate for middle-income households. Additionally, those close to him have suggested cutting the federal payroll tax.
During 2020, Trump’s economic team proposed slashing the payroll tax to boost the economy amid the COVID-19 pandemic’s peak. However, the administration settled for allowing temporary deferrals in payroll tax payments instead. Few companies took advantage of the option, understanding they would need to pay the taxes later. Still, it further proves that Trump considered struggling Americans a top priority. As the economy flounders, recent discussions suggest that Trump’s economic advisers are still considering a payroll tax cut.
It’s not the first time he has ridden in like a hero for hard-working Americans. In 2017, Trump passed the Tax Cuts and Jobs Act, a series of tax breaks set to expire in 2025. This law reduced corporate and individual tax rates and boosted family tax credits, among other benefits.
However, Trump’s future tax cuts will likely depend on the makeup of the House and Senate. It’s unlikely that a Democratic legislature would allow Trump to make any decisions that benefit Americans because they prefer to stoke the dying fires of January 6 and “hush money” trials.
It seems that Trump may be eying breaks to benefit all Americans, but he seems primarily focused on helping middle-class Americans. “When President Trump is back in the White House, he will advocate for more tax cuts for all Americans and reinvigorate America’s energy industry to bring down inflation, lower the cost of living, and pay down our debt,” said campaign spokeswoman Karoline Leavitt.
Meanwhile, Biden’s Inflation Reduction Act allocates trillions of dollars, not through direct government appropriations but through tax code adjustments. The Inflation Reduction Act broadened 22 distinct tax credits, totaling over a trillion dollars over the next decade. While Biden excoriates former President Trump for his tax cuts that “benefitted corporations,” corporate tax incentives have nearly doubled during Biden’s term.
Tax credits don’t offer equal benefits to all taxpayers. They primarily benefit those with substantial tax bills, favoring the wealthiest individuals who can afford top-notch lobbyists and tax attorneys.
Appearing sympathetic to the middle class while helping the wealthy is a tough road for Biden. After all, the Democratic Party is mainly supported by wealthy individuals. Just 15 years ago, the top 10 wealthiest congressional districts were split evenly between both parties., Democrats now control all 10 of them.
Biden wanted to enforce a minimum tax on the wealthy while introducing new tax breaks. To navigate this, he exempted many of these new tax breaks from the minimum tax in the Inflation Reduction Act.
The Inflation Reduction Act (IRA) includes provisions for tax credits aimed at encouraging investments in clean energy. For example, individuals purchasing electric vehicles are eligible for tax credits. Homeowners can claim tax credits for installing energy-efficient appliances, heat pumps, rooftop solar panels, and other energy-saving upgrades.
In other words, Biden’s tax breaks only help those who are on board with climate change. Industries that may not align with Biden’s agenda face higher tax rates due to the minimum tax provisions. Biden blasts Trump for giving corporations tax breaks while doing the same thing, although Biden’s corporate tax breaks, unlike Trump’s, are exclusively for industries that support his agenda.