Tax Cuts and Jobs Act (2017)

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    Trump Dangles New Tax Cut Proposals With Real Political Appeal

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    The most recent and costliest of Mr. Trump’s ideas would end income taxes on Social Security benefits.First it was a tax cut for hotel and restaurant workers in Nevada, a swing state where Donald J. Trump proposed exempting tips from taxes. Then, in front of powerful chief executives gathered in Washington, Mr. Trump floated cutting the corporate tax rate, helping to ease concerns in the business community about his candidacy.Now Mr. Trump is calling for an end to taxing Social Security benefits, which could be a boon for retirees, one of the most politically important groups in the United States.Repeatedly during the campaign, Mr. Trump and Republicans have embraced new, sometimes novel tax cuts in an attempt to shore up support with major constituencies. In a series of social-media posts, at political rallies, and without formal policy proposals, Mr. Trump has casually suggested reducing federal revenue by trillions of dollars.While policy experts have taken issue with the ideas, Mr. Trump’s pronouncements have real political appeal, at times putting Democrats on their back foot. Nevada’s two Democratic senators and its powerful culinary union have endorsed ending taxes on tips. The AARP supports tax relief for seniors receiving Social Security benefits, though it has not taken a position on Mr. Trump’s proposal.“You do have to scratch your head a little bit when someone’s going around offering free lunches everywhere,” said Jesse Lee, a Democratic consultant and former Biden White House official. “We’re all for people having their lunch, but we have to raise taxes on the wealthy to pay for it.”The most recent and most expensive of Mr. Trump’s plans is ending income taxes on Social Security benefits, which could cost the federal government as much as $1.8 trillion in revenue over a decade, according to the Committee for a Responsible Federal Budget. That would burn through the program’s financial reserves more quickly and hasten the moment when the government is no longer able to pay out Social Security benefits in full under current law.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Opportunity Zones, Lauded by Trump, Don’t Always Help Poor

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    A tax incentive, with bipartisan roots, aims to foster development in poor areas. It has fueled building, but it hasn’t always aided local residents.On an Alabama day so oppressive that the sweat pools on your face in the shade, Alex Flachsbart talks almost too rapidly to understand and drives around central Birmingham with similar velocity. Every few minutes, he pulls over to expound on a victory: neglected public housing, a long-empty factory, a crumbling department store, all being transformed into shiny apartments or airy office and retail space.“This was one of Birmingham’s white-whale buildings,” Mr. Flachsbart said of a former Red Cross office that had been renovated into 192 rental residences. The development happened with the help of a powerful tax break created in 2017 to lure investors toward poorer neighborhoods, an idea championed by Democrats and Republicans and cited by former President Donald J. Trump as among his proudest economic policy achievements. (“One of the greatest programs ever for Black workers and Black entrepreneurs,” he called the incentive in an appearance this week at a National Association of Black Journalists conference.)But the relatively low-income areas covered by the incentive, known as opportunity zones, didn’t benefit equally. On Mr. Flachsbart’s tour of new projects in downtown Birmingham, the stops dry up in the historically African American northwest quadrant. There, developable lots and vacant buildings haven’t received as much of the capital flowing toward the buzzier parts of downtown.“O.Z. was a nudge there because it was already at a tipping point,” said Mr. Flachsbart, who has put together several of those deals as chief executive of a nonprofit organization called Opportunity Alabama. “There is a wall at about 17th Street.”Alex Flachsbart, chief executive of Opportunity Alabama, in the Burger-Phillips Lofts in Birmingham, a building being renovated with opportunity zone financing.Charity Rachelle for The New York TimesBirmingham and the rest of Alabama are a window into how money has and hasn’t soaked into the ground designated as opportunity zones over the past six years. Congress is taking a closer look as it considers extending the incentive, which expires in 2026 along with most of the 2017 tax law. More

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    No Taxes on Tips? A Trump Idea Gains Ground.

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    The sudden popularity of exempting tips from taxes is a reminder of the improvisational nature of economic policymaking under Donald Trump.In Donald J. Trump’s telling, the idea was born over dinner at his Las Vegas hotel, where the waitress serving his table complained about the burden of paying taxes on her tips.“I was actually surprised to hear it,” Mr. Trump said last month at a rally in Virginia, adding that he quickly decided to address the waitress’s problem with a new campaign pledge: “No taxes on tips!”The proposal has rapidly become more than just a rally talking point. The Republican Party has officially embraced it in its platform, and House Speaker Mike Johnson, Republican of Louisiana, has said he would “pass it as soon as we can.” Some Democrats are also warming to making tipped income tax-free, with the two senators representing Nevada, a swing state with large restaurant and casino industries, endorsing it.The sudden popularity of exempting tips from taxes is a reminder of the improvisational nature of economic policymaking under Mr. Trump. Several economists involved in advising the Trump campaign said they hadn’t heard of the idea until Mr. Trump announced it publicly. But Republicans now see it as a key way to appeal to working-class Americans during the campaign against President Biden.Mr. Trump has encouraged his supporters to leave a note on restaurant tabs telling service staff that a Trump victory in November means no taxes on tips. Roughly four million Americans work in jobs where tips are common, according to an estimate by the Budget Lab at Yale.“It’s not like a gang of economists sitting around a table came up with that,” Stephen Moore, a Trump economic adviser, said. “I thought, ‘I don’t know if he’s being serious or not’, but as a political matter it’s a home run.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Proposed Tax Cuts and Increased Tariffs Could Hurt Poorer Households

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    Some Republicans want to use revenue collected from higher duties on foreign goods to finance tax cuts. Economists say such a shift could widen the gap between the rich and the poor.When former President Donald J. Trump met with House Republicans last month, he touched on a mix of policies core to his economic agenda: cutting income taxes while also significantly raising tariffs on foreign goods.Mr. Trump told Republicans he would “love to raise tariffs” and cut income taxes on Americans, potentially to zero, said Representative Marjorie Taylor Greene, Republican of Georgia.“Everyone was clapping in the room,” Ms. Greene said. “He said, ‘If you guys are going to go vote on something today, vote to lower taxes on Americans.’”Tariffs and tax cuts were core to Mr. Trump’s economic thinking while he was in the White House. If he wins in November, he is promising a much more aggressive approach, including potentially a blanket 10 percent tariff on nearly all imports and a 60 percent tax on Chinese goods.Mr. Trump and his supporters say that mixing tariffs with tax cuts will revitalize American businesses and manufacturing, boosting jobs and benefiting working-class Americans. And they see tariffs on foreign products as a lucrative source of revenue, one that could be used to offset a drop in tax receipts.Some economists have a different view, saying that cutting taxes while raising tariffs could have harmful consequences by widening the gap between the rich and the poor. Companies often pass on the cost of tariffs to consumers in the form of higher prices. As a result, economists say, lower-income households would be hit hardest by tariffs since they spend a greater share of their income on goods. Income taxes tend to fall more heavily on wealthier Americans since many low-income workers do not make enough money to owe federal income taxes.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Once a G.O.P. Rallying Cry, Debt and Deficits Fall From the Party’s Platform

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    Fiscal hawks are lamenting the transformation of the party that claimed to prize fiscal restraint and are warning of dire economic consequences.When Donald J. Trump ran for president in 2016, the official Republican platform called for imposing “firm caps on future debt” to “accelerate the repayment of the trillions we now owe.”When Mr. Trump sought a second term in 2020, the party’s platform pummeled Democrats for refusing to help Republicans rein in spending and proposed a constitutional requirement that the federal budget be balanced.Those ambitions were cast aside in the platform that the Republican Party unveiled this week ahead of its convention. Nowhere in the 16-page document do the words “debt” or “deficit” as they relate to the nation’s grim fiscal situation appear. The platform included only a glancing reference to slashing “wasteful” spending, a perennial Republican talking point.To budget hawks who have spent years warning that the United States is spending more than it can afford, the omissions signaled the completion of a Republican transformation from a party that once espoused fiscal restraint to one that is beholden to the ideology of Mr. Trump, who once billed himself the “king of debt.”“I am really shocked that the party that I grew up with is now a party that doesn’t think that debt and deficits matter,” said G. William Hoagland, the former top budget expert for Senate Republicans. “We’ve got a deficit deficiency syndrome going on in our party.”The U.S. national debt is approaching $35 trillion and is on pace to top $56 trillion over the next decade, according to the Congressional Budget Office. At that point, the United States would be spending about as much on interest payments to its lenders — $1.7 trillion — as it does on Medicare.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Democrats’ Dream of a Wealth Tax Is Alive. For Now.

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    A narrow Supreme Court ruling left the door open for Congress to expand taxes on billionaires, but it’s not a guarantee.For years, liberal Democrats have agitated for the United States to tax wealth, not just income, as a way to ensure that rich Americans who derive wealth from real estate, stocks, bonds and other assets were paying more in taxes.On Thursday, that dream survived a Supreme Court scare, but just barely.Thanks to a narrow court ruling, a raft of plans to use the tax code to address the gaping divide between the very richest Americans and everyone else appear set to live for years to come in the campaign proposals and official budgets of top Democrats.The idea of a wealth tax was not directly before the court on Thursday. Justices were considering the constitutionality of a new tax imposed under former President Donald J. Trump that applies to certain income earned by businesses overseas. But in taking the case, the court could have pre-emptively ruled federal wealth taxation unconstitutional.It did not, and liberal groups celebrated the victory.“The Supreme Court also could have taken an activist turn of the worst kind by pre-emptively ruling federal wealth taxes unconstitutional today,” Amy Hanauer, the executive director of the Institute on Taxation and Economic Policy, which supports higher taxes on corporations and the wealthy, said in a statement. “To its credit, the court did not do so.”But the case also offered a window into the legal fight to come over various iterations of a wealth tax should Congress ever adopt one. It showed a solid four justices firmly opposed to such a tax — and two more who appeared skeptical.“This is a narrow decision,” Joe Bishop-Henchman, the vice president of the National Taxpayers Union, which opposes wealth tax proposals, said in a statement on Thursday. But, he added, “the court makes clear it is not opening the door to a wealth tax.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Debt on Pace to Top $56 Trillion Over Next 10 Years

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    Congressional Budget Office projections released on Tuesday show a grim fiscal backdrop ahead of tax and debt limit fights.The United States is on a pace to add trillions of dollars to its national debt over the next decade, borrowing money more quickly than previously expected, at a time when big legislative fights loom over taxes and spending.The Congressional Budget Office said on Tuesday that the U.S. national debt is poised to top $56 trillion by 2034, as rising spending and interest expenses outpace tax revenues. The mounting costs of Social Security and Medicare continue to weigh on the nation’s finances, along with rising interest rates, which have made it more costly for the federal government to borrow huge sums of money.As a result, the United States is expected to continue running large budget deficits, which are the gap between what America spends and what it receives through taxes and other revenue. The budget deficit in 2024 is projected to be $1.9 trillion, up from a forecast earlier this year of $1.6 trillion. Over the next 10 years, the annual deficit is projected to swell to $2.9 trillion. As a share of the economy, debt held by the public in 2034 will be 122 percent of gross domestic product, up from 99 percent in 2024.The new projections come as lawmakers are gearing up for a big tax and spending battle. Most of the 2017 Trump tax cuts will expire in 2025, forcing lawmakers to decide whether to renew them and, if so, how to pay for them. The United States will also again have to deal with a statutory cap on how much it can borrow. Congress agreed last year to suspend the debt limit and allow the federal government to keep borrowing until next January.Those fights over tax and spending will be taking place at a time when the country’s fiscal backdrop is increasingly grim. An aging population continues to weigh on America’s old-age and retirement programs, which are facing long-term shortfalls that could result in reduced retirement and medical benefits.Both Democrats and Republicans expressed concern about the national debt as inflation and interest rates soared over the last few years, but spending has been difficult to corral. The C.B.O. report assumes that the 2017 tax cuts are not extended, but that is highly unlikely. President Biden has said he will extend some of the tax cuts, including those for low- and middle-income earners, and former President Donald J. Trump has said he will extend all of them if he wins in November. Fully extending the tax cuts could cost around about $5 trillion over 10 years.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Budget Lays Out Battle Lines Against Trump

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    President Biden and former President Donald J. Trump offer vastly different policy paths on almost every aspect of the economy.President Biden in his budget this week staked out major economic battle lines with former President Donald J. Trump, the presumptive Republican presidential nominee. The proposal offers the nation a glimpse of the diverging directions that retirement programs, taxes, trade and energy policy could take depending on the outcome of the November election.During the past three years, Mr. Biden has enacted key pieces of legislation aimed at bolstering the green energy economy, making infrastructure investments and reinforcing America’s domestic supply chain with subsidies for microchips, solar technology and electric vehicles. Few of those priorities are shared by Mr. Trump, who has pledged to cut more taxes and erect new trade barriers if re-elected.The inflection point will be arriving as the economy enters the final stretch of what economists are now expecting to be a “soft landing” after two years of high inflation. However, the prospect of a second Trump administration has injected increased uncertainty into the economic outlook, as companies and policymakers around the world brace for what could be a dramatic shift in the economic stewardship of the United States.Here are some of the most striking differences in the economic policies of the two presidential candidates.Sparring over the social safety netAt first glance, Mr. Biden and Mr. Trump might appear to have similar positions on the nation’s social safety net programs. In 2016, Mr. Trump broke with his fellow Republicans and refused to support cuts to Social Security or Medicare. Mr. Biden has long insisted that the programs should be protected and has hammered Republicans who have suggested cutting or scaling back the programs.In his budget proposal on Monday, Mr. Biden reiterated his commitment to preserving the nation’s entitlement system. He called for new efforts to improve the solvency of Social Security and Medicare, including making wealthy Americans pay more into the health program. However, his plans were light on details regarding how to ensure both programs’ long-term sustainability.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More