Latest news with #AdamMichel
Boston Globe
14-05-2025
- Business
- Boston Globe
Trump's new tax cuts could shower Americans with cash, for now
Advertisement The effect would be to shower many Americans with hundreds of dollars per year, starting when they file taxes next year, a windfall that would dry up as Trump leaves office. Even babies could cash in, with children born during Trump's term — but not before Jan. 1, 2025, or after Dec. 31, 2028 — each receiving a $1,000 deposit to new 'MAGA accounts' created under the bill. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up For a president who put his name on the stimulus checks the federal government sent during his first term, the appeal of putting cash into Americans' pockets is clear. But some analysts and many Democrats warn that any gains from the tax cuts, already concentrated among the rich, could be overwhelmed by the cuts to health care and food assistance that Republicans also intend to include in the legislation. And economists expect that the temporary cuts would, at best, provide a short sugar high to the economy overall. Advertisement 'We should expect close to no growth benefits from any of these changes,' said Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank. 'They're simply giveaways to targeted demographics that Trump singled out during the campaign. To the extent that they're temporary, and they actually go away in four years, that's better than having them being a permanent feature of the tax code.' Speaker of the House Mike Johnson spoke to reporters after the House passed the GOP's budget plan on April 10. Andrew Harnik/Getty Not every provision in the Republican tax bill would be temporary. Much of the legislation is focused on preserving the architecture of the last Republican tax cut, passed during Trump's first term. Lower individual income rates and a larger standard deduction, as well as a tax break for many business owners and a higher threshold for the estate tax, would continue indefinitely, with some tweaks. Otherwise, many of the cuts will set Congress up for another debate in the next few years over whether to extend this new set of Trump tax cuts. The temporary cuts include tax breaks adored by many businesses, like the ability to immediately write off spending on research and development, as well as certain investments. A new deduction for building factories is also temporary, available only to projects that begin construction before Jan. 1, 2030. The fleeting nature of those incentives will make them less meaningful for companies, whose expansion plans are already caught up in the uncertainty created by Trump's whipsawing tariff plans. The Tax Foundation, a think tank that is generally bullish on tax cuts' ability to spur economic growth, estimated this week that the bill would increase gross domestic product by 0.6% in the long term, a fraction of the 1.7% growth the group attributed to the original 2017 law. Advertisement And that modest growth would come at a cost. The tax bill includes new limits on qualifying for the child tax credit, including that a child whose parent lacks a Social Security number cannot receive the benefit. That would be a change from how the credit works now, when parents without Social Security numbers, a group that includes migrants in the country without legal permission, can claim the money as long as their child is a citizen. Tightening the rules would mean 2 million American children would lose the benefit under the House bill, the chief of staff of the Joint Committee on Taxation told lawmakers Tuesday. Republicans are plowing ahead with other spending cuts to defray the overall cost of the legislation. More than 8 million low-income Americans could lose their health insurance as a result of the Medicaid cuts that the GOP has drafted, for example. All while the biggest benefits of the tax cuts would flow to high-income Americans who owe the most in income tax, according to an analysis by the Center on Budget and Policy Priorities, a liberal think tank. ''Let's get a loaf of bread to the peasant and a huge benefit to the wealthy'; that's what they're doing,' said Rep. Donald S. Beyer Jr., D-Va. During a markup of Trump's tax package on Tuesday, from left, Mass. Representative Richard Neal, ranking member of the House Ways and Means Committee, and Texas Representative Lloyd Doggett. Kent Nishimura/Bloomberg The exact fiscal cost of the legislation is still up in the air as Republicans haggle over the spending cuts. Just the tax provisions are, so far, expected to cost roughly $3.8 trillion. But that is most likely an undercount. Republicans have set the timeline for evaluating the cost of the legislation to end in 2034. With many of the tax changes taking effect in 2026, the $3.8 trillion represents only nine years of costs, instead of the customary 10 years. Advertisement And then there is the fact that many of the temporary tax cuts, if extended, would add far more to the deficit. The Committee for a Responsible Federal Budget, a nonpartisan group that calls for lower deficits, estimates that the tax measures would add $5.3 trillion to the deficit over the next 10 years, if the four-year cuts continued for that full period. The actual fate of those tax cuts — including a $4,000 increase to the standard deduction for many seniors — is, of course, still unclear. Lawmakers' plans to pass a policy now and hope it is extended later sometimes do not actually work out. Republicans acknowledge that they are lucky to be in power when many of their 2017 tax cuts expire. By the time 2028 rolls around, Democrats could have control in Congress, and after that the next president may not be interested in reviving Trump's promises from the 2024 presidential campaign. For Republicans who somewhat begrudgingly agreed to include Trump's ideas in the bill — and who say they worry about the debt — the cuts' expiration may not be the worst outcome. 'That will be up to whoever is around four years from now,' said Rep. David Schweikert, R-Ariz., a member of the Ways and Means Committee. This article originally appeared in .
Yahoo
02-05-2025
- Business
- Yahoo
Letters to the Editor: 'Abundance agenda' might not be the answer to America's economic woes
To the editor: Guest contributors Veronique de Rugy and Adam Michel argue that lowering tax rates on capital gains, dividends, interest and business income would reward investment and grow the economy ('The 'abundance agenda' will fail without tax reform,' April 30). They say we should aim for 'more neutral, more consumption-based taxation.' That might look like increasing sales taxes — which take up a bigger percentage of the average household budget than of the wealthy household budget — and decreasing taxes on investments, which are important to the wealthy but have little place in the average family's finances. This prioritization of capital over labor is the favorite policy of those who have money to invest, but the pretense that it will 'trickle down' throughout the economy has been proven hollow time and again. In 2024, the bottom 50% of U.S. households owned 2.4% of total household wealth, while the top 10% of households held 67.3%, according to the Federal Reserve. Which of these groups needs a tax cut? Which would benefit from more public spending on housing, education and healthcare? Grace Bertalot, Anaheim .. To the editor: This op-ed sounds encouraging by suggesting the 'abundance agenda' policy framework as something both the left and right can embrace. Their argument is that if business is freed of burdensome taxes, abundance would rebound. I believe the underlying economic conundrum in the country is economic inequality, not a lack of abundance. The article asserts, without evidence, that, 'An abundant economy will do more for lower-income Americans than redistribution ever could.' This sounds like trickle-down economics all over again. Todd Collart, Ventura .. To the editor: De Rugy and Michel might have noted that the U.S. national debt is currently $36 trillion and has been rising at the rate of $1 trillion to $3 trillion a year. For decades, GOP leadership has maintained that tax cuts at the top will spur growth and increase revenue. We know now that this is a fantasy. The authors could have actually provided a public service by listing specific measures to compensate for the revenue lost by their proposals. Simply proposing new revenue reductions, given our disastrous fiscal status, just perpetuates the folly of and damage caused by supply-side economics. Eric Carey, Arlington, Va. This story originally appeared in Los Angeles Times.
Los Angeles Times
02-05-2025
- Business
- Los Angeles Times
Letters to the Editor: ‘Abundance agenda' might not be the answer to America's economic woes
To the editor: Guest contributors Veronique de Rugy and Adam Michel argue that lowering tax rates on capital gains, dividends, interest and business income would reward investment and grow the economy ('The 'abundance agenda' will fail without tax reform,' April 30). They say we should aim for 'more neutral, more consumption-based taxation.' That might look like increasing sales taxes — which take up a bigger percentage of the average household budget than of the wealthy household budget — and decreasing taxes on investments, which are important to the wealthy but have little place in the average family's finances. This prioritization of capital over labor is the favorite policy of those who have money to invest, but the pretense that it will 'trickle down' throughout the economy has been proven hollow time and again. In 2024, the bottom 50% of U.S. households owned 2.4% of total household wealth, while the top 10% of households held 67.3%, according to the Federal Reserve. Which of these groups needs a tax cut? Which would benefit from more public spending on housing, education and healthcare? Grace Bertalot, Anaheim .. To the editor: This op-ed sounds encouraging by suggesting the 'abundance agenda' policy framework as something both the left and right can embrace. Their argument is that if business is freed of burdensome taxes, abundance would rebound. I believe the underlying economic conundrum in the country is economic inequality, not a lack of abundance. The article asserts, without evidence, that, 'An abundant economy will do more for lower-income Americans than redistribution ever could.' This sounds like trickle-down economics all over again. Todd Collart, Ventura .. To the editor: De Rugy and Michel might have noted that the U.S. national debt is currently $36 trillion and has been rising at the rate of $1 trillion to $3 trillion a year. For decades, GOP leadership has maintained that tax cuts at the top will spur growth and increase revenue. We know now that this is a fantasy. The authors could have actually provided a public service by listing specific measures to compensate for the revenue lost by their proposals. Simply proposing new revenue reductions, given our disastrous fiscal status, just perpetuates the folly of and damage caused by supply-side economics. Eric Carey, Arlington, Va.
Bloomberg
12-02-2025
- Business
- Bloomberg
Cutting Arena Subsidies Can Help Cover Tax Cuts, Think Tank Says
Republicans scoping out ways to pay for the extension of tax cuts that are set to expire this year should take a close look at the public financing of professional sports stadiums, libertarian think tank Cato Institute said. Tax breaks for stadiums are among a dozen examples of 'tax expenditures ripe for elimination or reform,' Adam Michel, Cato Institute's director of tax policy studies, wrote in a Monday blog post.
