With the impending presidential debate, Hy and Christopher talk about how the polls have narrowed nationally but give Donald Trump a statistical lead and almost every swinging state.We talk tax policy, including Trump’s proposals to eliminate taxes on tips and to replace the income tax with an 85% foreign tariff. What are the economic consequences? And we propose an idea from Christopher's Louisiana Weekly column this week on how Biden could match this rhetoric on taxes by stealing an idea currently dominating the conversation in the UK parliamentary elections. (More on that below.)Then the tax conversation turns to Louisiana and a visit by state Revenue Secretary Richard Nelson to the Louisiana House Ways & Means Committee. Could Gov. Jeff Landry be signaling a deal to legislators by sending his chief tax aide last Tuesday? In other words, is the message: renew the .45% sales tax, due to expire next year, in exchange for a series of income tax cuts? What about the idea of eliminating income taxes on retirees over the next decade—which would cost about the same as making the sales tax permanent? We end with a look at Juneteenth and how it influenced former Sec. State Condoleezza Rice.A Taxing Lesson From Across the PondBy Christopher Tidmore, Louisiana WeeklyDonald Trump continues to rise in the polls, in large part because he is gaining support from voters who earn less than $60,000 per year. This sector of the electorate has felt the squeeze of inflation most intensely, yet these families tend to qualify for very few government programs to ameliorate the effects of rising prices. However, an idea that the UK Reform Party has proposed in the current election – to raise the threshold of paying those income taxes – might help Joe Biden hold onto a majority of the working class voters.Trump has already shown remarkable strength with the working class electorate. In 2020, those households making under $50,000 a year constituted 42 percent of his voter base. Polling seems to suggest that he has only improved his standing with this working class demographic, thanks – in part – to increased strength with Hispanics.In other words, Biden may be on the tipping point of losing the working class vote in November. However, the British Reform Party (who currently challenges the ruling Conservatives as well as Labour in the upcoming July 4 election) devised a strategy to draw away working class voters from both main parties. The current untaxed income under the British tax system amounts to £12,570 GBP or $16,148.62 USD. That is already higher in real terms than the $14,600 (for single taxpayers and married individuals filing separately) which constitutes the standard deduction under the U.S. Income Tax Code. UK Reform’s electoral platform proposes to raise this minimum threshold free-from-taxation to £20,000 GBP, or $25,446.90 USD.This change would remove seven million Brits from the tax rolls entirely, and save each family in the nation approximately £1,500 GBP. Therefore, it stands as a tax cut for all which focuses the largest tax cut on those most in need of it, and not surprisingly, it has helped draw away enough Tory voters that upstart Reform has surpassed the ruling UK Conservative Party in the most recent polling data.President Biden will spend the next six months hammered by Republicans over his decision not to renew the 2017 Trump tax cuts (at least for higher earners). Cutting taxes at the bottom, though, inoculates him against a typical Democratic political weakness. By justifying the decision to allow the higher tax rates to return to upper income earners as a means to pay for a larger tax cut which disproportionately benefits lower income families (yet positive still affects all taxpayers), Democrats can win the tax argument. Currently, the standard deduction sits at $29,200 for married couples filing jointly and surviving spouses. If President Biden were to raise the standard deduction for individuals to nearly the same as the proposed British rate, $25,500, that would mean that no married couple making less than $51,000 would pay a dollar in U.S. income tax. Augmenting child tax credits to the level they were during the pandemic – $3,600 – would translate into no family of four earning less than $58,200 a year would have to write a check to the IRS. (If Congress were to further raise that child credit by an additional $600 per child, President Biden could argue that under $60,000, no family pays tax – if you re-elect him of course!)The evaporation of the working class vote for Democrats constitutes a major political problem for the president’s re-election chances. If the White House refuses to take the initiative on substantive tax cuts at the lower levels, little doubt exists that Donald Trump will. After all, it’s only a small step from advocating elimination of taxes on tips to embracing the elimination of taxes for everybody who makes less ...
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Jun 21 202454 m