Continuing low tax rates for the rich and corporations will hurt working families

[Yo_Mama_Been_Loggin]

Summary: Extending Trump’s Tax Cuts and Jobs Act will have painful trade-offs for the U.S. economy and most Americans.

Key findings

The U.S. “fiscal gap”—how much taxes need to be raised or spending cut to keep public debt stable as a share of gross domestic product—was entirely created by the Republican tax cuts of 2001, 2003, and 2017.

The “tax gap”—the amount of taxes owed but not paid each year—is currently larger than the overall fiscal gap. It is driven by the richest U.S. households and businesses cheating the law and underpaying taxes.

Extending the expiring provisions of the 2017 Tax Cuts and Jobs Act (TCJA) would increase the fiscal gap by nearly 50%, from 2.1% to 3.3%.

No matter how these tax cuts are financed, the result will hurt most working families, especially low-income households. The most damaging way to finance TCJA extensions would be with spending cuts for programs like SNAP or Medicaid.

https://www.epi.org/publication/tcja-extensions-2025/

[somsai]

1. Musk is a working family, as is Bezos and Gates

and I don't think I stay up late at night losing sleep about them paying too much in taxes. Them or anyone else labeled "working families".

Wednesday I received my completed tax forms back from the accountant. I am paying an effective tax rate of 6.4%. Our income is towards the lower side of the fourth quintile. We enter no gray areas to avoid taxes. We max out our IRA contributions, pay two tuitions.

Similar to Musk most of our income doesn't even count, unrealized income is taxed at 0%. Equities. They fluctuate, lost 2% in value this week.

One thing I do know is I personally could afford to pay a lot more in taxes, and if I can I'd be willing to bet just about everyone reading this can. It's the greed of the millions and millions of people making six figures and up that allow billionaires to also not pay much in taxes. We take our few thousand of tax breaks and that allows the people in the two percent or the one percent or higher, to take millions in tax breaks. If we took all the billionaires money, it still wouldn't be enough. We need to start paying our fair share. Tax billionaires sure, but tax ourselves too.

40% of American families make under $60K per household. 20% of families make over $155K. At 60K they are barely hanging on, at 155K you should be investing enough for early retirement and a life of luxury. There is a vast difference.

We need an end to deductions, including the IRA and health insurance and move to simple progressive taxation. The poor pay none and the richer you are the more you progressively pay.

[Skittles]

3. won't you pay taxes on the IRA when you withdraw?

isn't that how it works, because you contribute pre-tax?

[somsai]

4. It depends on how much taxable income I am making at the time.

Because of the part of the ACA that required taxes on Cadillac health insurance plans I know ours is worth 35K tax free. They never did require people to pay taxes on it, but they track it, and it's on my wife's w2 which I read carefully.

That, and the IRAs, and the two credits for school end up reducing our taxes quite a bit. 35K untaxed health insurance, 15K untaxed IRA, and a further 4K of direct credits. We could also invest in a IRA type of thing that is actually for college, or I could have deducted a tons more by getting a SEP instead of the IRA, also a health savings account. There are a ton of very legal ways to not pay taxes, and unfortunately they mostly save money for those who have a lot of money.

Many people have health care that has huge deductibles and co pays, so they never go to the doctor. Our untaxed plan covers almost everything at no cost at all to us. Our plan costs more than many people make in salary.

[Skittles]

2. that's pretty much why they do it

they do not work for WE THE PEOPLE