How Will Federal Income Taxes Change Over The Next 20 Years?

Perhaps spending needs to be decreaased and done more wisely.
The problem is getting people to agree with WHAT spending should be decreased. If I was in charge I could 100% decrease spending but a lot of people would be upset with what I did. What qualifies as "wisely" is very subjective.
 
US federal taxes as a % of GDP are at the lowest they have been outside of recession in 50 years. It’s not easy to make the case spending is too high when tax receipts % of GDP are falling.

We have a large disparity in rates beteen “W-2 type income” and other categories of income, such as investment (dividends, capital gains, self-employed, business, etc). As more incomes are shifted into the other categories with much lower rates, the GDP grows, total incomes grow, but tax receipts do not. This is a problem.

This will get much more serious over the next decade as all the baby boomers retire. Even with RMDs, retired people pay far less taxes that working people.

The lower, preferential tax rates on investment income will need to be revisited. We should not be surprised to see an increase in rates on qualified dividends and capital gains.

When people discuss tax rates they usually think of taxes on W-2 income. There will probably be some effort to raise those rates, but at best that will only offset, or partially offset, boomer retirement. The real potential is in tax rates on financial income.

One additional thought. It would be nice if all the tremendously valuable US created intellectual property paid taxes to the US gov’t instead of paying taxes only to EU governments.
 

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US federal taxes as a % of GDP are at the lowest they have been outside of recession in 50 years. It’s not easy to make the case spending is too high when tax receipts % of GDP are falling.
If that's true (and I have no reason to doubt it) then tax receipts falling as % GDP is a COMPELLING argument to cut spending. It's what we have all done here - lived within our means.
 
The problem is getting people to agree with WHAT spending should be decreased. If I was in charge I could 100% decrease spending but a lot of people would be upset with what I did. What qualifies as "wisely" is very subjective.
A 100% decrease would mean no Treasury note/bill/bond interest would be paid and no SS or similar payments.
So yes, you would likely be taken out back and shot...
 
A 100% decrease would mean no Treasury note/bill/bond interest would be paid and no SS or similar payments.
So yes, you would likely be taken out back and shot...
That's not what I meant.
 
If that's true (and I have no reason to doubt it) then tax receipts falling as % GDP is a COMPELLING argument to cut spending. It's what we have all done here - lived within our means.
We don't have that magical printing press in the basement (at least I don't ) :) When I was at Megacorp, we had and acronym WIBN - Wouldn'tItBeNice. We had to priortize.
 
A 100% decrease would mean no Treasury note/bill/bond interest would be paid and no SS or similar payments.
So yes, you would likely be taken out back and shot...

I could 100% decrease = I could absolutely decrease

That’s what they meant
 
I'm wondering if, as being discussed, SALT is modified/increased, would they make it retroactive to the 2024 tax year? Retroactive impacts have been done in the past.

Flieger
Probably not...

From what I remember they only take it back to when the law was first introduced... nothing has been introduced yet...

Then again, maybe it is in the year it is introduced... or for new revenue...
 
Saw someone today saying that the federal budget has gone from $4 trillion to over $6 trillion since just before the pandemic...

Nothing to back this up but I do not think that the spending has gone down that much... raised during the pandemic and that is the new base to do next years budget...
 
Saw someone today saying that the federal budget has gone from $4 trillion to over $6 trillion since just before the pandemic...

Nothing to back this up but I do not think that the spending has gone down that much... raised during the pandemic and that is the new base to do next years budget...
Spending hasn’t been $4T in a while, it was $5.47T in 2019. It went up dramatically in 2020-21 and then dropped in 2022. You know you can easily look this stuff up before you post…
 

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Removing SS taxation would reduce my FIT by 35%. Of course, if I outlive the reduced exaustion date, I would quickly lose any gains I made and more.
 
Removing SS taxation would reduce my FIT by 35%. Of course, if I outlive the reduced exaustion date, I would quickly lose any gains I made and more.
Makes no sense at all for a system that's facing insolvency in about 10 years, but we'll see.
 
Spending hasn’t been $4T in a while, it was $5.47T in 2019. It went up dramatically in 2020-21 and then dropped in 2022. You know you can easily look this stuff up before you post…
You mean a politician lied:confused:

BUT, your graph is adjusted for inflation... in 2019 it was $4.45 trillion... I can see a politician rounding that down...

Hit $6.8 and has dropped to $6.13 in 23 and estimated at almost $7 for 2024...




 
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