Pretax Deductions

Oddly enough, that’s basically the end of the debunking right there. Reich goes on to list a number of grievances, but never really gets around to explaining how he defines socialism or why taxing the rich doesn’t fall in that category.

Before President-elect Donald Trump proposed it at the federal level, Alabama passed a law exempting overtime wages from taxes back in November 2023. Act 2023-421 (H.B. 217) excluded any amounts received by a full-time, hourly wage employee as compensation for work performed above 40 hours a week from state income taxes, starting January 1, 2024.

President-elect Trump has promised to impose steep new taxes on trade, including a 10-20 percent tariff on all imports, at least a 60 percent tariff on Chinese imports, and a 25-100 percent tariff on Mexican imports. At least a dozen estimates on Trump’s proposed tariffs show they will have a harmful effect on the American economy, supporting the standard view among economists that tariffs reduce trade and distort production, leading to lower standards of living.

The clear election victory for Republicans means they will retake the White House, Senate, and (by a slim margin) the House next year, putting them in the driver’s seat to determine the direction of tax reform. Republicans are likely to use a process called budget reconciliation, which allows for budget legislation to be passed out of the House and Senate via a simple majority.

It's not just famous people who have to think about choices.

Despite what people thought at first, the years of the pandemic were good for state and local tax collections. The big jumps in 2021 and 2022 haven't carried over into 2023, but most states' earnings are still strong and well above levels before the pandemic, even when inflation is taken into account.

The Internal Revenue Service (IRS) changes more than 60 tax rules every year to account for inflation. This stops something called "bracket creep." People move into higher tax brackets or lose value from credits and benefits when inflation rises instead of their real income rising. This is called "bracket creep."

Early property taxes were generally paid by farmers and were imposed mostly on land throughout the medieval era. These days, property taxes are also imposed on assets such as real estate, and they are paid periodically by individuals or organizations.

Interest rates are predicted to go down as inflation goes down, but the Congressional Budget Office (CBO) says that the government's interest costs will almost double over the next ten years, reaching 3.6% of GDP in 2033.