The Trump Tax Increase

It is Election Day morning as I write this. I have no idea who won or if we even know the results as of the publishing of this article.  (I plan to write an election “recap” article for Sunday’s publication.)  For this article it doesn’t matter.  I follow three economists closely.  My regular readers know how often I cite the work of Paul Krugman.  Less frequently, and mostly for the theoretical portion of his work, I cite French economist Thomas Piketty.  The third is Joseph Stiglitz whose Sunday morning New York Times op-ed, Republicans, Not Biden, Are About To Raise Your Taxes, was a showstopper to me in that in the hubbub of Trumpism I forget about the subject matter of his article.  Let’s explore.

Stiglitz reminds us that as part of the Trump Tower Tax Cut several automatic steps increasing taxes starting in 2021 are baked into the law. 2021 was conveniently selected by Trump and his GOP sycophants because it is after the 2020 elections where Trump has to run again and both the numbers and the “map” were challenging for the Republican quest to retain the Senate majority.

I’m sure Dr. Stiglitz was using rough numbers nonetheless he points out that three-quarters of Americans fall below the $100,000 mark in annual income and that is where the majority of the tax increases will fall. This plan was clearly a reward to donors.  It just stands to reason that $100,000+ people can make much larger political donations than those under that mark are able to.

Ironically, (or should I say hypocritically?), Trump ran on the lie (among many others) that Biden would increase taxes. The reality is that Biden’s plan calls for tax increases on corporations and people earning more than $400,000 a year.  Which plan hurts more Americans?  More importantly from a consumer demand standpoint (which is 70% of the American economy) which plan hurts the American economy more?  I’m confident you can figure that one out without any further explanation.

Sometimes I feel someone said it better than me. This is one of those instances.  The issue here is that who won the elections doesn’t matter in that at this point the tax increases are already in law.  I’m not the best at this but if I did it correctly here is a link to Stiglitz’s op-ed.

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