Brace for Big Tax Hikes in 2026 Unless Congress Acts

Published

2 years ago

May 14, 2024

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Most Americans face tax hikes starting in 2026, and the increased federal tax bite will come about without Congress lifting a finger. That’s because 2017’s Tax Cuts and Jobs Act (TCJA) expires at the end of 2025, and despite some politicians’ contrary claims, a majority of Americans benefited from that law. The end of tax cuts for so many people necessarily results in corresponding increases to come.

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Δ Tax Cuts for Most, but With a Time Limit

“Unless Congress acts, the vast majority of Americans will see higher, more complicated taxes beginning in 2026 as major provisions from the Tax Cuts and Jobs Act of 2017 expire,” warns the Tax Foundation. “The TCJA reduced average tax burdens for taxpayers across the income spectrum and temporarily simplified the tax filing process through structural reforms. It also boosted capital investment by reforming the corporate tax system and significantly improved the international tax system.”

The widespread benefits of the TCJA shouldn’t be a matter for debate. But there’s confusion because Team Biden and fans of high taxes fibbed about the law leading up to the 2020 presidential election.

“Biden’s false claim that no one but the rich got Trump’s tax cuts,” headlined a 2019 Washington Post Glenn Kessler piece about the debate over the law. “Most Americans received a tax cut,” he added.

“About 65 percent of households paid less in individual income taxes in 2018 as a result of the TCJA,” wrote the Tax Policy Center’s Howard Gleckman. “About 6 percent paid more. The rest paid about the same.”

Adjusting for all federal taxes under pre-TCJA law, the Cato Institute’s Chris Edwards commented, “lower? and middle??income groups received the largest relative individual income tax cuts.”

So, there’s widespread agreement that a law which cut taxes for most Americans is poised to expire, resulting in higher taxes. But, just as the benefits of the tax cuts varied across the population, so will the size of the bite taken by tax increases starting in 2026. Tax Hikes for All

“The largest average tax hikes would be experienced by taxpayers who reside in California’s congressional districts,” note the Tax Foundation’s Garrett Watson and Erica York. “For example, the congressional district covering the San Francisco area would see an average tax hike of $16,127 per taxpayer, the highest in the U.S. By contrast, northern New York City would see an average tax increase of $807 per taxpayer under TCJA expiration.”

That link takes you to a tool that lets you look up the estimated impact of TCJA expiration on taxpayers in states and congressional districts across the country.

Separately, the Tax Foundation published a tax calculator that lets you estimate the impact of TCJA expiration on you and your family, given specifics such as marital status, income, number of children, and choice of standard or itemized deductions. The calculator accounts for “most aspects of the federal individual income tax code except provisions related to business and self-employed income.”

That said, extending the TCJA’s tax cuts has high costs of its own since that would reduce the amount of money collected by the federal government to spend on its projects. Tax Cuts and Tradeoffs

“Federal tax revenues would fall by more than $4 trillion on a conventional basis and by nearly $3.5 trillion on a dynamic basis over the coming decade; and without spending cuts, debt and deficits would increase,” concedes a May Tax Foundation report on options regarding the law.

“By the year 2050, permanent extension of TCJA laws would reduce federal revenues from 18.4 percent to 17.1 percent of annual Gross Domestic Product (GDP),” Jagadeesh Gokhale and Mariko Paulson of the University of Pennsylvania’s Penn Wharton Budget Model specify. “Federal debt held by the public would rise from 226.0 percent of GDP to 261.1 percent by 2050.”

But that decrease in revenue and corresponding rise in debt and deficits may matter only if it hampers a serious plan to control the federal government’s ongoing spending spree. Separately, the Penn Wharton Budget Model predicts that “a maximum debt-GDP ratio of 200 percent can be sustained even if investors believe (maybe myopically) that a closure rule will then prevent that ratio from increasing into the future.” They say the real ceiling on federal debt is more like 175 percent of GDP before the financial markets entirely lose faith in the U.S. economy. Debt as a percentage of GDP above that point is disastrous, whether at 226 percent or 261 percent.

It makes sense, then, for Americans to submit to significant tax hikes only if those increases go to balancing the federal budget, eliminating deficits, and controlling debt. Otherwise, we’re going to pay more for what is essentially the same very bad outcome. A Need for Serious Reform

Benefits of extending the TCJA, on the other hand, operate independent of faith in a sudden surge in responsibility among the political class. Extending the law’s provisions “would boost long-run GDP by 1.1 percent and employment by 913,000 full-time equivalent jobs,” according to the Tax Foundation.

For extending the TCJA, the Tax Foundation considers two options, both including modifications that seek to reduce the hit to federal revenues while maximizing gains for individuals. Option 2, for example, “broadens the individual income tax base by ending the income tax exclusion for employer-provided fringe benefits, most notably health insurance.”

That’s a matter of tweaking the current system around the edges to maintain relief for individuals and a faster-growing economy. Tax Foundation experts also propose possible fundamental changes, including entirely dumping the income tax system in favor of a consumption tax. That has the potential to significantly boost personal income as well as GDP and reduce the national debt. Of course, the gains really apply only if the government also reduces spending.

But such fundamental reform is a lot to ask of a political class that spent us into a corner and now wants tax hikes so there’s even more of our money to spend. Letting the TCJA expire requires placing enormous faith in people who got us into a fiscal mess to begin with.

Fundamental reforms to the federal government’s finances are absolutely necessary. Until that happens, we should resist stealth tax hikes so we can keep our hard-earned money for ourselves.

World

Trump peace plan: We could all pay if Europe doesn’t step up and guarantee Ukraine’s security

Published

12 mins ago

November 22, 2025

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Trump peace plan: We could all pay if Europe doesn't step up and guarantee Ukraine's security

The Donald Trump peace plan is nothing of the sort. It takes Russian demands and presents them as peace proposals, in what is effectively for Ukraine a surrender ultimatum.

If accepted, it would reward armed aggression. The principle, sacrosanct since the Second World War, for obvious and very good reasons, that even de facto borders cannot be changed by force, will have been trampled on at the behest of the leader of the free world.

The Kremlin will have imposed terms via negotiators on a country it has violated, and whose people its troops have butchered, massacred and raped. It is without doubt the biggest crisis in Trans-Atlantic relations since the war began, if not since the inception of NATO.

The question now is: are Europe’s leaders up to meeting the daunting challenges that will follow. On past form, we cannot be sure.

The plan proposes the following:

• Land seized by Vladimir Putin’s unwarranted and unprovoked invasion would be ceded by Kyiv.

• Territory his forces have fought but failed to take with colossal loss of life will be thrown into the bargain for good measure.

• Ukraine will be barred from NATO, from having long-range weapons, from hosting foreign troops, from allowing foreign diplomatic planes to land, and its military neutered, reduced in size by more than half.

And most worryingly for Western leaders, the plan proposes NATO and Russia negotiate with America acting as mediator.

Lest we forget, America is meant to be the strongest partner in NATO, not an outside arbitrator. In one clause, Mr Trump’s lack of commitment to the Western alliance is laid bare in chilling clarity.

And even for all that, the plan will not bring peace. Mr Putin has made it abundantly clear he wants all of Ukraine.

He has a proven track record of retiring, rallying his forces, then returning for more. Reward a bully as they say, and he will only come back for more. Why wouldn’t he, if he is handed the fortress cities of Donetsk and a clear run over open tank country to Kyiv in a few years?

Since the beginning of Trump’s presidency, Europe has tried to keep the maverick president onside when his true sympathies have repeatedly reverted to Moscow.

It has been a demeaning and sycophantic spectacle, NATO’s secretary general stooping even to calling the US president ‘Daddy’. And it hasn’t worked. It may have made matters worse.

The parade of world leaders trooping through Sharm el-Sheikh, Egypt, lavishing praise on his Gaza ceasefire plan, only encouraged him to believe he is capable of solving the world’s most complex conflicts with the minimum of effort.

The Gaza plan is mired in deepening difficulty, and it never came near addressing the underlying causes of the war.

Most importantly, principles the West has held inviolable for eight decades cannot be torn up for the sake of a quick and uncertain peace.

With a partner as unreliable, the challenge to Europe cannot be clearer.

In the words of one former Baltic foreign minister: “There is a glaringly obvious message for Europe in the 28-point plan: This is the end of the end.

“We have been told repeatedly and unambiguously that Ukraine’s security, and therefore Europe’s security, will be Europe’s responsibility. And now it is. Entirely.”

If Europe does not step up to the plate and guarantee Ukraine’s security in the face of this American betrayal, we could all pay the consequences.

World

Ukraine and Europe cannot reject Trump’s plan – they will play for time and hope he can still be persuaded to desert the Kremlin

Published

12 mins ago

November 22, 2025

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Ukraine and Europe cannot reject Trump's plan - they will play for time and hope he can still be persuaded to desert the Kremlin

“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.

The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.

It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.

Ukraine war latest: Kyiv receives US peace plan

Its proposals are non-starters for Ukrainians.

It would hand over the rest of Donbas, territory they have spent almost four years and lost tens of thousands of men defending.

Analysts estimate at the current rate of advance, it would take Russia four more years to take the land it is proposing simply to give them instead.

It proposes more than halving the size of the Ukrainian military and depriving them of some of their most effective long-range weapons.

And it would bar any foreign forces acting as peacekeepers in Ukraine after any peace deal is done.

The plan comes at an excruciating time for the Ukrainians.

They are being pounded with devastating drone attacks, killing dozens in the last few nights alone.

They are on the verge of losing a key stronghold city, Pokrovsk.

And Volodymyr Zelenskyy is embroiled in the gravest political crisis since the war began, with key officials facing damaging corruption allegations.

The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.

Perversely, though, it may help him.

There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.

The genesis of this plan is unclear.

Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.

The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.

Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.

If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.

Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.

They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.

World

Devastation left by Hurricane Melissa in Jamaica like a ‘world war’, says Olympic medallist

Published

12 mins ago

November 22, 2025

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Devastation left by Hurricane Melissa in Jamaica like a 'world war', says Olympic medallist

A former Jamaican Olympic sprint athlete has described the destruction left by Hurricane Melissa as like a “world war, where somebody drops a bomb”.

The category 5 hurricane made landfall in Jamaica at the end of October with wind speeds of 185mph, making it the worst storm to hit the Caribbean country since records began. It then went on to impact Haiti and Cuba.

Speaking exclusively to Sky News, Asafa Powell, alongside American Olympic gold medallist Noah Lyles, described the aftermath of the worst natural disaster to hit Jamaica and why they have teamed up to provide relief to those most affected.

“I think the world is mourning for Jamaica right now and I am mourning for Jamaica,” Powell said.

“My heart is just crying every day when I see the videos. It doesn’t do it justice.

“You have to see it in person, when you see it in person… there’s no greenery, everything is just brown. It’s like a world war, where somebody drops a bomb, that’s what it looks like.”

Powell represented Jamaica at four Olympics over his career – beginning in 2004 in Athens.

Despite not winning individual gold at an Olympics or World Championships he claimed gold as part of the 4x100m relay team, which included Usain Bolt at the Rio Games in 2016.

Individually he set the 100m world record twice, clocking 9.77 seconds in 2005 and then 9.74 in 2007.

The latest official figures from the Jamaican government on Wednesday confirmed 45 deaths with 15 people still missing.

Lyles, who won gold in the 100m in a photo finish by 0.005 seconds and bronze in the 200m sprints at the Paris Olympics in 2024, explained why his charity – the Lyles Brothers Sports Foundation – wanted to support the Jamaican people.

“We know that there are tonnes of people who are helping out right now, and there are other foundations that you can go to, but we really wanted to make sure that not just Junelle’s [Junelle Bromfield] community but a lot of the other communities surrounding that area got support,” Lyles said.

After the Paris Olympics, the 28-year-old announced his engagement to fellow sprint athlete and Jamaican-born Junelle Bromfield in October 2024 in a social media post.

He said: “As Junelle says, St Elizabeth is the Bread Basket Parish. It provides food to the rest of the island. And if you don’t have food, then it doesn’t matter if you make it to the next day, you need something to eat, you need something to drink, you need to be able to keep the energy and the spirits up.”

After making landfall, the Jamaican government formally declared the island a disaster area, saying almost every parish had reported blocked roads, fallen trees and major flooding.

The World Bank estimates the physical damage from Hurricane Melissa to Jamaica amounts to US$8.8bn, or 41% of Jamaica’s 2024 GDP. The impact of that damage was witnessed firsthand by Powell.

He said: “I wanted to see, just to get a visual of everything that’s going on, what’s happened on the island. I drove to Montego Bay, Westmoreland, St Elizabeth, and to be honest, I was scared, I was so shocked.

“I was scared to look left or right because there were just people on both sides of the road hoping that help was coming.

“People with kids, young babies, and it was devastating for me. I see houses under water, you know, three-storey houses, you see places where houses used to be… and it’s really bad.”

On the emotional toll it has brought to him personally while providing supplies, Powell said it was never something he thought he would witness in his country.

He said: “To see people, your people, struggling like that – never in a million years we thought Jamaica would have ever been like this and like I said, driving through it, it looked like somebody dropped a bomb on that side of Jamaica.

“Everyone is trying to help, you know, with whatever little they can help with.”

He continued: “Jamaica is very small, but it’s big in a sense, like Jamaicans say, we’re ‘likkle but we tallawah’.

“So there are a lot more communities to be touched and we’re going to get there, but it’s taking a while, but we’re getting a lot of support and I really appreciate that.”