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The economic lessons Hayek taught us are as relevant today as they were 50 years ago. -
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.
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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.
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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.
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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.
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It's not just famous people who have to think about choices.
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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.
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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."
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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.
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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.
Social Security History
Background Since a pair of 1938 Treasury Department Tax Rulings, and another in 1941, Social Security benefits have been explicitly excluded from federal income taxation. (A revision was issued in 1970, but it made no changes in the existing policy.) This changed for the first time with the passage of the 1983 Amendments to the Social Security Act. Beginning in 1984, a portion of Social Security benefits have been subject to federal income taxes.
The three Treasury Rulings (see below) established as tax policy the principle that Social Security benefits were not subject to federal income taxes. This was special treatment for Social Security benefits since most private pensions are partly taxable. In most private pensions, an amount of the pension equal to the contributions made by the worker are tax-free. The amount of such private pensions which exceeds the amount of the worker's contributions, is usually subject to federal income taxes.
A slightly different, and more complicated, way of saying essentially the same thing is that the portion of pension benefits not subject to taxation is that on "after-tax income." For a worker, his entire pay is subject to federal income taxes, including that part that is subject to Social Security payroll taxes, and so, in the sometimes confusing parlance of tax policy, this is said to all be "after-tax income." His employer, however, is allowed to deduct his portion of the Social Security payroll tax from his taxable income. So Social Security payments made by the employer are considered "before-tax income" (and hence, not taxable). So the value of the "before-tax income" received by the beneficiary (i.e., the employer's contribution) is potentially taxable. Or to say it the other way, only that portion of the worker's "after-tax income" on which he paid payroll taxes, is not taxable.
Yet another way of describing this idea is to use "exclusion ratios," which is how the Treasury Department defines the taxable portion of a pension benefit. In all of these ways of describing it, the basic idea is the same: the pension recepient is generally liable for taxes on that portion of his benefits that he did not himself contribute.
Treasury's underlying rationale for not taxing Social Security benefits was that the benefits under the Act could be considered as "gratuities," and since gifts or gratuities were not generally taxable, Social Security benefits were not taxable. It is likely that Treasury took this view owing to the structure of the 1935 Act in which the taxing provisions and the benefit provisions were in separate Titles of the law. Because of this structure, one could argue that the taxes were just a form of revenue-raising, unrelated to the benefits. The benefits themselves could then be seen as a "gratuity" that the federal government paid to certain classes of citizens. Although this was clearly not true in a political and moral sense, it could be construed this way in a legal sense. In the context of public policy, most people would hold the view that the tax contributions created an "earned right" to subsequent benefits. Notwithstanding this common view, the Treasury Department ruled that there was no such necessary connection and hence that Social Security benefits were not taxable.