Mark recently sat down with David McKnight to discuss the future of the Trump Tax Cuts and the prediction that they will be extended prior to FY 2024. Listen to the podcast here and don’t forget to subscribe if you like what you hear!
The Trump tax cuts went into effect at the end of 2017, but because they lacked a supermajority of approval in Congress those tax cuts had an expiration date. David has long maintained that the government won’t let those tax cuts expire.
There is a broad swath of Americans that are responsible for getting the current politicians re-elected and those people have short memories. If taxes go up, they’re going to blame those same politicians. No politician wants to be responsible for raising taxes on that many Americans.
There is a high likelihood that if you are in the 10%, 12%, 22%, or 24% tax brackets, those tax brackets will be extended until 2031.
If you’re construed as someone who earns a higher income, you’re probably going to face higher tax brackets. Politicians seem to be focused on the 24% tax bracket and below.
The implications of these tax cuts being extended are vast. In 2018, we cut taxes and raised expenses, which was exactly the opposite of what we needed to do as a country.
By extending these tax cuts, we’re kicking the can down the road and the fix is going to have to be even more draconian.
We are currently spending our children’s future because there is no courage in Washington.
The debt ceiling is upon us once again and Congress is waiting until the very last minute to do anything about it.
The debt continues to rise for a variety of reasons. We’ve had Covid relief, wars, and tax cuts that led to additional borrowing. In the near future, the debt will be going up primarily because of Social Security, MediCare, and Medicaid.
It’s projected that the national debt will be around $51 trillion by 2033. Even if we stay at historical interest rates we would struggle to be able to afford to pay that.
President Joe Biden wants to raise the debt ceiling so that Congress can pay for things that have already been approved.
If the US defaults on its debt, most experts predict a recession, if not a depression, millions of people would lose their jobs, interest rates would go up, the country’s credit rating would plummet, and the status of the US dollar as the world’s reserve currency would be in question.
Even if people got their Social Security checks in that situation, there would be so much chaos in the economy that it would hardly matter.
Mentioned in this episode:
David’s books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David’s Tax-free Tool Kit at taxfreetoolkit.com
