Warren Buffett, the billionaire Oracle of Omaha, predicts that Washington will either “take a larger percentage of what we own and pay it” or reduce expenditure. You are aware of Washington’s feelings over expenditure reductions.
At the annual shareholder conference of Berkshire Hathaway on Saturday, he cautioned investors, saying, “I think greater taxes are imminent.” “Washington could determine eventually that this level of budget deficit is unacceptable due to some significant ramifications.”
“Therefore, they can determine they would take a larger portion of what we possess and pay it rather than wanting to cut back on spending.”
Not only has President Joe Biden made this pledge, but he also hinted that if reelected, he would not try to continue the Trump tax cuts the following year. David Winston reported this week for Roll Call that Biden informed electrical union workers in April that the 2017 Tax Cuts and Jobs Act would expire in 2025. “It will expire, and if I am re-elected, it will remain expired.”
Republicans on the House Ways and Means Committee claim that a typical American family of four earning $75,000 will see a $1,500 tax rise if Congress decides not to renew the tax cuts from the Trump administration. Along with the basic deduction that all taxpayers are entitled to, “working parents will suffer from a child tax credit chopped in half” and “main street enterprises will face a 43.4 percent tax rate.”
Recall that Biden pledged not to increase taxes on anyone earning less than $400,000. Biden stated you would not be facing tax increases, so maybe you could afford them if you had $1 for each time he violated his word.
Margaret Thatcher’s guru, Sir Keith Joseph, described this as “the ratchet effect” in action. When leftists seize power, they try to exert as much authority, scope, and size of government expenditures as they can. At best, conservatives who retake power essentially leave things exactly as they were when they left them. Few have exploited it more than Biden, who has passed several large spending bills and imposed numerous onerous regulatory schemes on the economy.
In the meantime, April’s Wall Street Journal story stated:
“Based on the latest data, it appears that the IRS continues to prioritize the middle class. Sixty-three percent of fresh audits last summer focused on taxpayers making less than $200,000. Eighty percent of the audits involved filers making less than $1 million, while only a tiny portion went to the top earners overall.”
An $80 billion budget increase for the IRS was part of Biden’s so-called Inflation Reduction Act, presumably to allow those extra agents to concentrate their audits on “the affluent.” Therefore, “the agency has been sluggish to turn its emphasis to high-income taxpayers, who make up a small fraction of overall filings,” according to the WSJ piece. The middle class does not have better accountants than the IRS; the rich do. The IRS understands when to take action.
These tales culminate in a single resolution. Disregard Buffett’s admonition that tax increases are “likely” coming. They are either already here or will arrive soon in the form of inflation, more middle class audits, and the expiry of the Trump tax cuts.
Author: Scott Dowdy
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