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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.

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Politics

Child poverty strategy unveiled – but not everyone’s happy

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Starmer wants to lift half a million children out of poverty - but does his plan go far enough?

A new long-awaited child poverty strategy is promising to lift half a million children out of poverty by the end of this parliament – but critics have branded it unambitious. 

The headline announcement in the government’s plan is the pledge to lift the two-child benefit cap, announced in Rachel Reeves’s budget last week.

It also includes:

• Providing upfront childcare support for parents on universal credit returning to work
• An £8m fund to end the placement of families in bed and breakfasts beyond a six-week limit
• Reforms to cut the cost of baby formula
• A new legal duty on councils to notify schools, health visitors, and GPs when a child is placed in temporary accommodation

Many of the measures have previously been announced.

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Two-child cap ‘a real victory for the left’

The government also pointed to its plan in the budget to cut energy bills by £150 a year, and its previously promised £950m boost to a local authority housing fund, which it says will deliver 5,000 high-quality homes for better temporary accommodation.

Downing Street said the strategy would lift 550,000 children out of poverty by 2030, saying that would be the biggest reduction in a single parliament since records began.

More on Poverty

But charities had been hoping for a 10-year strategy and argue the plan lacks ambition.

A record 4.5 million children (about 31%) are living in poverty in the UK – 900,000 more since 2010/11, according to government figures.

Phillip Anderson, the Strategic Director for External Affairs at the National Children’s Bureau (NCB), told Sky News: “Abolishing the two-child limit is a hell of a centre piece, but beyond that it’s mainly a summary of previously announced policies and commitments.

“The really big thing for me is it misses the opportunity to talk about the longer term. It was supposed to be a 10-year strategy, we wanted to see real ambition and ideally legally binding targets for reducing poverty.

“The government itself says there will still be around four million children living in poverty after these measures and the strategy has very little to say to them.”

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‘A budget for benefits street’

‘Budget for benefits street’ row

The biggest measure in the strategy is the plan to lift the two-child benefit cap from April. This is estimated to lift 450,000 children out of poverty by 2030, at a cost of £3bn.

The government has long been under pressure from backbench Labour MPs to scrap the cap, with most experts arguing that it is the quickest, most cost-effective way to drive-down poverty this parliament.

The cap, introduced by Conservative chancellor George Osborne in 2017, means parents can only claim universal credit or tax credits for their first two children. It meant the average affected household losing £4,300 per year, the Institute for Fiscal Studies calculated in 2024.

The government argues that a failure to tackle child poverty holds back the economy, and young people at school, cutting their employment and earning prospects in later life.

However, the Conservatives argue parents on benefits should have to make the same financial choices about children as everyone else.

Shadow chancellor Mel Stride said: “Work is the best way out poverty but since this government took office, unemployment has risen every single month and this budget for Benefits Street will only make the situation worse. “

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OBR leak: This has happened before

‘Bring back Sure Start’

Lord Bird, a crossbench peer who founded the Big Issue and grew up in poverty, said while he supported the lifting of the cap there needed to be “more joined up thinking” across government for a longer-term strategy.

He has been pushing for the creation of a government ministry of “poverty prevention and cure”, and for legally binding targets on child poverty.

“You have to be able to measure yourself, you can’t have the government marking its own homework,” he told Sky News.

Lord Bird also said he was a “great believer” in resurrecting Sure Start centres and expanding them beyond early years.

The New Labour programme offered support services for pre-school children and their parents and is widely seen to have improved health and educational outcomes. By its peak in 2009-2010 there were 3,600 centres – the majority of which closed following cuts by the subsequent Conservative government.

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Lord Bird on the ‘great distraction’ from child poverty

PM to meet families

Sir Keir Starmer’s government have since announced 1,000 Best Start Family Hubs – but many Labour MPs feel this announcement went under the radar and ministers missed a trick in not calling them “Sure Starts” as it is a name people are familiar with.

The prime minister is expected to meet families and children in Wales on Friday, alongside the Welsh First Minister, to make the case for his strategy and meet those he hopes will benefit from it.

Several other charities have urged ministers to go further. Both Crisis and Shelter called for the government to unfreeze housing benefit and build more social rent homes, while the Children’s Commissioner for England, Dame Rachel de Souza, said that “if we are to end child poverty – not just reduce it” measures like free bus travel for school-age children would be needed.

The strategy comes after the government set up a child poverty taskforce in July 2024, which was initially due to report back in May. The taskforce’s findings have not yet been published – only the government’s response.

Sir Keir said: “Too many children are growing up in poverty, held back from getting on in life, and too many families are struggling without the basics: a secure home, warm meals and the support they need to make ends meet.

“I will not stand by and watch that happen, because the cost of doing nothing is too high for children, for families and for Britain.”

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Sports

Isles top juggernaut Avalanche with ‘surprise’ win

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Isles top juggernaut Avalanche with 'surprise' win

ELMONT, N.Y. — The Colorado Avalanche entered Thursday night’s game at the New York Islanders as a juggernaut, having lost just once in regulation in 26 games. Islanders coach Patrick Roy’s message to his team before that game: “If there’s a team that could surprise them, it’s us and the way we’ve been playing.”

St. Patrick was prophetic: Roy’s team defeated the mighty Avalanche 6-3 to snap Colorado’s 17-game point streak in a statement win for the Islanders (15-10-3).

The Islanders built a 4-0 lead against Colorado and responded every time the Avalanche crept back into the game. That included a late third-period penalty kill, as the Avalanche pulled goalie Mackenzie Blackwood for a 6-on-4 advantage. Forward Casey Cizikas iced the win with an empty-netter.

“That’s a really good hockey team over there,” Cizikas said. “They’ve proved it all season. They’re never out of a game, so you’ve got to complete it.”

Even after the loss, Colorado remained the NHL’s top team in points percentage (.815), goal differential (plus-47), offense (4.04 goals per game) and defense (2.19 goals against per game). The Avalanche have the NHL’s leading scorer in center Nathan MacKinnon (46 points) and the leading scorer among defenseman in Cale Makar (33 points).

But Islanders forward Mathew Barzal said New York’s 4-1 loss in Denver on Nov. 16 gave his teammates confidence they could hang with the NHL’s best.

“We feel like when we played them in Colorado, we probably should have won,” said Barzal, who had a goal and two assists in the win. “As a group, too, we know who we’re playing and that always makes a difference. Against Colorado, if we don’t show up, it could be ugly.”

The Islanders showed up on the scoresheet at 5:56 in the first period, on a controversial goal by forward Kyle MacLean. His shot sailed into the top corner of the net with Blackwood (36 saves) flat on the ice. Replays showed that after a scramble in the crease, the stick of Islanders center Marc Gatcomb had become wedged in Blackwood’s pads as Blackwood attempted to defend the net.

Colorado coach Jared Bednar challenged the goal. The NHL Situation Room cited Rule 69.7 in upholding the goal, which states that “in a rebound situation, or where a goalkeeper and attacking player(s) are simultaneously attempting to play a loose puck, whether inside or outside the crease, incidental contact with the goalkeeper will be permitted, and any goal that is scored as a result thereof will be allowed.”

Bednar disagreed with that assessment.

“Listen, I think goalie interference is a joke. If that’s not goalie interference, I don’t know what is. You can’t just shove the goalie’s pads out of the way to create a loose puck,” said Bednar. “I’m not going to challenge unless it’s obvious. And I thought that was obvious.”

On the other end of the ice, Islanders goalie Ilya Sorokin was great when he needed to be in making 35 saves against the high-octane Avalanche. Roy cited one save in the second period where Sorokin stopped Artturi Lehkonen on a 2-on-1 before Barzal increased their lead to 5-2 with a power-play goal.

“I think that gave us the confidence. Ilya made the key save at the right time,” said the coach.

The Islanders’ win over the Avalanche came on a poignant night at UBS Arena for the players. Their fathers and mentors were in attendance, ahead of their road trip to Florida. The game also marked the return of former Islanders star Brock Nelson, who was sent to Colorado at last season’s trade deadline. He received a standing ovation from Islanders fans after a video tribute.

It was just the second loss for the Avalanche (19-2-6) in the past 14 games.

“It’s closer than you think, but it still wasn’t good enough,” Bednar said. “We’ll refocus on the things that we need to do to make us successful.”

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Sports

McDavid’s hat trick ties Messier, Oilers rout Kraken

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McDavid's hat trick ties Messier, Oilers rout Kraken

EDMONTON, Alberta — Connor McDavid had his 13th career hat trick to tie Mark Messier for fourth in Oilers history and added an assist in Edmonton’s 9-4 romp over the Seattle Kraken on Thursday night.

McDavid opened the scoring at 7:17 of the first period, made it 5-2 on a power play at 6:14 of the second and struck again on a power play at 6:59 of the third. He has 14 goals this season.

McDavid set up Leon Draisaitl‘s first-period, power-play goal for his 28th assist. Along with his 16th goal, Draisaitl had three assists for a four-point night of his own.

Matthew Savoie scored twice and Vasily Podkolzin, Zach Hyman and Mattias Janmark added goals. Evan Bouchard and Ryan Nugent-Hopkins each had three assists, and Calvin Pickard made 28 saves. The Oilers have won two of their last three to improve to 12-11-5.

Eeli Tolvanen, Frederick Gaudreau, Jared McCann and Jani Nyman scored for Seattle. The Kraken have lost four in a row to drop to 11-8-6.

Joey Daccord allowed five goals on 14 shots for the Kraken before being replaced six minutes into the second period by Philipp Grubauer, who also made 14 saves.

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