President Donald Trump addressed the nation last night to talk about progress he has made for the nation since his inauguration earlier this year and to clue us in on what he is expecting for next year and for the rest of his presidency.
His most notable achievement thus far has been closing our southern border to "asylum seekers" and countless others who have snuck into our country uninvited. It is notable that former president Joe Biden claimed he was powerless to achieve such a feat, yet Trump had no trouble accomplishing a total shut down of the border in a matter of months.
Trump mentioned he was instrumental in terminating hostilities around the world, such as the war in Gaza and the conflict between Iran and Isreal. It is notable that he was successful in assisting in the release of hostages held for years by Hamas.
He also mentioned getting inflation under control, as evidenced by a decrease in average gas prices to below $3.00 a gallon, a significant decrease from the typical $3.50 average under Biden. He also mentioned a decrease in food prices for such commodities as eggs and new inflation numbers released today showing a 3 tenth of a percent drop in inflation supports his assertion that it is moving in the right direction.
Trump spent a good amount of time extolling the virtues of his recently passed "Big Beautiful Bill" legislation that focused on tax breaks for millions of Americans. There are many benefits that will lower the tax burden on mostly middle to low-income taxpayers.
It is notable that for the vast majority of the new tax laws, benefits available to low and middle income taxpayers are phased out for higher-income earners. The claim by Democrats that Trump is looking out for his billionaire friends when it comes to tax matters is and has always been a total myth.
For instance, under the old tax law, you could deduct only $10,000 of state and local taxes as an itemized deduction. Trump's new law allows for a deduction of up to $40,000, but if you make over $606,333 in 2025 you can only deduct the old limit of $10,000. Just about every new tax law has similar limitations if you fall into the higher earner income brackets.
Most folks have heard of the new laws mentioning "no tax on tips, overtime and social security." While that may be true in some instances, if you read the fine print, you will see that there are limits on how much of those categories of income you can exclude from taxes. Also, as I just mentioned, if you are a higher-income earner, you may find that all or a portion of your tips, overtime pay and social security income is still taxable.
With increased standard deductions, deductions for car loan interest, higher childcare and child tax credits and the aforementioned decrease in the taxability of tips, overtime and social security, many taxpayers will see a reduction in their taxes filed this spring. Also, favorable depreciation laws will allow businesses to keep more of their income upfront, which should have a beneficial effect on the economy, at least in the short run.
We are at a point in time where similar to the beginning of a sports season, the team is assembled and coached up, so now it's time for the season to start so we can see how good a job the coach did. Like all administrations, Trump's will be graded largely on how his economy does. The Big Beautiful Bill has been passed and its tax laws will soon be in effect. Once millions of taxpayers are able to keep more of their own money, it should have a stimulative effect on the economy. We'll know soon enough how good of a job Trump is doing.
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