Brace for Big Tax Hikes in 2026 Unless Congress Acts

Published

1 year 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.

Politics

‘Shameful’ that black boys in London more likely to die than white boys, says Met Police chief

Published

2 hours ago

July 12, 2025

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'Shameful' that black boys in London more likely to die than white boys, says Met Police chief

It is “shameful” that black boys growing up in London are “far more likely” to die than white boys, Metropolitan Police chief Sir Mark Rowley has told Sky News.

The commissioner told Sunday Morning with Trevor Phillips that relations with minority communities “is difficult for us”.

Sir Mark, who came out of retirement to become head of the UK’s largest police force in 2022, said: “We can’t pretend otherwise that we’ve got a history between policing and black communities where policing has got a lot wrong.

“And we get a lot more right today, but we do still make mistakes. That’s not in doubt. I’m being as relentless in that as it can be.”

He said the “vast majority” of the force are “good people”.

However, he added: “But that legacy, combined with the tragedy that some of this crime falls most heavily in black communities, that creates a real problem because the legacy creates concern.”

Sir Mark, who also leads the UK’s counter-terrorism policing, said it is “not right” that black boys growing up in London “are far more likely to be dead by the time they’re 18” than white boys.

“That’s, I think, shameful for the city,” he admitted.

The Met Police chief’s admission comes two years after an official report found the force is institutionally racist, misogynistic and homophobic.

Baroness Casey was commissioned in 2021 to look into the Met Police after serving police officer Wayne Couzens abducted, raped and murdered Sarah Everard.

She pinned the primary blame for the Met’s culture on its past leadership and found that stop and search and the use of force against black people was excessive.

At the time, Sir Mark, who had been commissioner for six months when the report was published, said he would not use the labels of institutionally racist, institutionally misogynistic and institutionally homophobic, which Casey insisted the Met deserved.

However, London Mayor Sadiq Khan, who helped hire Sir Mark – and could fire him – made it clear the commissioner agreed with Baroness Casey’s verdict.

After the report was released, Sir Mark said “institutional” was political language so he was not going to use it, but he accepted “we have racists, misogynists…systematic failings, management failings, cultural failings”.

A few months after the report, Sir Mark launched a two-year £366m plan to overhaul the Met, including increased emphasis on neighbourhood policing to rebuild public trust and plans to recruit 500 more community support officers and an extra 565 people to work with teams investigating domestic violence, sexual offences and child sexual abuse and exploitation.

Watch the full interview on Sunday Morning with Trevor Phillips from 8.30am on Sunday.

World

Backlash as Air India crash report points to possible human error – here’s what experts think

Published

2 hours ago

July 12, 2025

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Backlash as Air India crash report points to possible human error - here's what experts think

As investigators continue to piece together the full picture, early findings of the Air India crash are pointing towards a critical area of concern — the aircraft’s fuel control switches.

The flight, bound for London Gatwick, crashed just moments after taking off from Ahmedabad airport on 12 June, killing all but one of the 242 people on board the plane and at least 19 on the ground.

According to the preliminary report by India’s Aircraft Accident Investigation Bureau (AAIB), the two engine fuel control switches on the plane were moved from the “RUN” to “CUTOFF” position.

These switches control fuel flow to the engines and should only be used when the aircraft is on ground, first to start the engines before a flight and later to shut them down at the gate.

They are designed so they’re unlikely to be changed accidentally, pointing to possible human error on the Air India flight.

The findings include the final conversation between the pilots and show there was confusion in the cockpit as well.

When one pilot asked the other why he cut off the fuel, he responded to say he did not do so.

Moments later, a Mayday call was made from the cockpit, but the plane could not regain power quickly enough and plummeted to the ground.

Captain Amit Singh, founder of Safety Matters Foundation, an organisation dedicated to aviation safety, told Sky News: “This exchange indicates that the engine shutdowns were uncommanded.

“However, the report does not identify the cause – whether it was crew error, mechanical malfunction, or electronic failure.”

Previous warning of ‘possible fuel switch issue’

“The Boeing 787 uses spring-loaded locking mechanisms on its fuel control switches to prevent accidental movement,” Mr Singh explained.

But a previous bulletin from the Federal Aviation Administration (FAA) “warned that these switches might be installed with the locking feature disengaged,” he said.

This could “make them susceptible to unintended movement due to vibration, contact, or quadrant flex”, he added.

Speaking to Sky News, aviation expert Terry Tozner said: “The take-off was normal, the aircraft rotated at the correct speed left the ground and almost immediately, the cut-off switches were selected to off, one then two.

“But nobody has said with any clarity whether or not the latch mechanisms worked okay on this particular aircraft. So we can only assume that they were in normal working order.”

In India, there has been a backlash over the findings, with some saying the report points to pilot error without much information and almost dismisses the possibility of a mechanical or electric failure.

Indian government responds

India’s civil aviation minister Kinjarapu Ram Mohan Naidu has been quick to respond, saying: “We care for the welfare and the wellbeing of pilots so let’s not jump to any conclusions at this stage, let us wait for the final report.

“I believe we have the most wonderful workforce of pilots and crew in the whole world.”

Both pilots were experienced, with around 19,000 flying hours between them, including more than 9,000 on Boeing 787s.

The report says the aircraft maintenance checks were on schedule and that there are no signs of fuel contamination or a bird strike.

So far, no safety recommendations have been issued to Boeing or General Electric, the engine manufacturers.

Concern over destroyed flight recorder

Mr Singh said “the survivability of the flight recorders also raises concern”.

The plane’s rear flight recorder, designed to withstand impact forces of 3,400 Gs and temperatures of 1,100C for 60 minutes, “was damaged beyond recovery”.

“The Ram Air Turbine (RAT), which deploys automatically when both engines fail and power drops below a threshold, was observed as deployed in CCTV footage when the aircraft was approximately 60ft above ground level,” Mr Singh said.

“This suggests that the dual engine failure likely occurred before the official timestamp of 08:08:42 UTC, implying a possible discrepancy.”

Mr Singh said it was also “of particular note” that the plane’s emergency locator transmitter (ELT) did not send any signal after the crash.

“Was the ELT damaged, unarmed, mis-wired, or malfunctioning?” he said.

The report has generated more questions than answers on topics including human error, power source failures and mechanical or electrical malfunction.

The final report is expected to take a year. Meanwhile, families grapple with the unimaginable loss of loved ones in one of the worst disasters in India’s aviation history.

Environment

Tesla launches new software update with Grok, but it doesnt even interface with the car

Published

4 hours ago

July 12, 2025

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Tesla launches new software update with Grok, but it doesnt even interface with the car

Tesla has launched a new software update for its vehicles that includes the anticipated integration of Grok, but it doesnt even interface with the car yet.

Earlier this week, CEO Elon Musk said that Tesla would integrate Grok, the large language model developed by his private company, xAI, into its vehicles.

Today, Tesla started pushing the update to the fleet, but there’s a significant caveat.

The automaker wrote in the release notes (2025.26):

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Grok (Beta) (US, AMD)

Grok now available directly in your Tesla

Requires Premium Connectivity or a WiFi connection

Grok is currently in Beta & does not issue commands to your car – existing voice commands remain unchanged.

First off, it is only available in vehicles in the US equipped with the AMD infotainment computer, which means cars produced since mid-2021.

But more importantly, Tesla says that it doesn’t send commands to the car under the current version. Therefore, it is simply like having Grok on your phone, but on the onboard computer instead.

Tesla showed an example: