Your Taxes Are Going Up!
As the current political landscape remains mostly unchanged, we are facing a significant increase in taxes. Virginia Senator Mark Warner has already termed 2025 as “Tax Armageddon.” The strategy for next year is to let the 2017 tax cuts expire, resulting in the largest tax increase in the history of the United States.
This maneuver by politicians is nothing new. They pass tax bills with expiration dates to raise taxes without taking direct action. This allows them to point fingers at the opposing party when taxes inevitably increase. It’s a game of blame-shifting, and we, the taxpayers, are caught in the middle.
Oregon Senator Ron Wyden, who chairs the finance committee, is still advocating for a wealth tax targeting individuals with assets over $100 million. Meanwhile, Elizabeth Warren has declared that she will hold middle-class tax cuts hostage if Republicans don’t pursue higher taxes on corporations and the wealthy. Her plan includes a 2% annual tax on households with more than $50 million in assets.
Behind closed doors, there’s likely bipartisan agreement on raising taxes. Both parties seem inclined to increase taxes, albeit quietly. They avoid admitting it openly because it’s politically inconvenient. True leaders in Washington, D.C., are scarce. Instead, they opt for the path of least resistance, which rarely involves making necessary cuts to spending.
Despite the seeming divide between Democrats and Republicans, they both benefit from letting tax cuts expire. This way, they can continue to spend and blame each other without making any meaningful progress. Elizabeth Warren’s tactic of holding middle-class tax cuts hostage is a clear indication of where the money is.
Currently, the U.S. has the most progressive tax code in the world. Politicians need to target where the majority of money is concentrated. Until we elect leaders willing to make difficult decisions about spending, we won’t see any substantial change. Compromises could be made, but that requires a level of courage and leadership that is currently lacking.
Years ago, when Obama was president, I warned that sending more money to Washington, D.C., was akin to giving a crack addict cash next to his dealer. The more money we send, the more they spend. They won’t save or pay down debt; they’ll simply spend it all and then borrow more.
If there were a real commitment to balancing the budget, cutting unnecessary programs, and using additional revenue to pay down debt, we might see some support for tax increases. However, expecting such fiscal responsibility is like expecting to play middle linebacker for the Giants this season—highly unlikely.
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