Both US citizens and residents will have a new increase in their tax payments this year. According to the Congressional Budget Office (CBO), an increase of 28% is expected for this year, in relation to the amounts currently paid.
This movement of a tax nature is carried out in a complex scenario for those who live in the North American nation, which in March accumulated the highest year-on-year inflation in 40 years, with 8.5%.
However, this will not be the only increase in the medium term that is envisioned for citizens. An even bigger rise is expected in 2025, when the tax cuts enacted at the time by then-President Donald Trump expire.
To get an idea of the magnitude of the situation, in terms of collections, the report issued by the CBO recently revealed that it focused on expectations of 2.6 trillion dollars in individual income taxes this year. A figure much higher than the 2.0 trillion dollars last year. This corresponds to the highest number in history since the payment of taxes began in the country, in 1913.
“In 2021, personal income tax receipts totaled $2 trillion, or 9.1% of GDP. Under current law, and based on receipts observed through the end of April of this year, the CBO expects individual income tax receipts to increase 28% in 2022, to $2.6 trillion.” reported the Congressional Budget Office.
In addition, the CBO indicated that it expects federal tax revenue in its entirety (not only taxes) to reach a record of 4.8 trillion dollars in 2022. In this regard, the document indicated that it is projected to be equivalent to 19.6% of the nation’s gross domestic product, the highest annual revenue, relative to the size of the economy, since 2000.
Biden’s mistakes with inflation and taxes
The CBO also revealed that if the Internal Revenue Service receives the budget increase sought by US President Joe Biden, its collections will increase even more. “Thank you, Biden,” is the headline of a Town Hall note to portray his role in the massive tax. The contrast is stark with his predecessor, Donald Trump.
With inflation at a forty-year high, and with wages lagging behind, Biden has been careful to make believe that all these increases are the fault of everyone except the US government and the Federal Reserve, for example.
When it comes to inflation, Biden blamed COVID-19 and Putin for the Ukraine war. Biden asserted that the Covid disease itself — that is, not the government’s enforced lockdowns — has been to blame for the logistical problems and shortages that have contributed to rising prices. Additionally, Biden blamed the war in Ukraine for rising prices, given Ukraine’s role as a grain-exporting nation and the current difficulty exporting from war-torn regions.
Biden is correct that these events play a role in driving up some prices, but it is an outright lie to suggest or claim that grain export and logistics problems are the main reasons for price inflation in the United States in the present.
The real cause of price inflation is monetary inflation, and monetary inflation has been going full steam for more than a decade. In the last two years, moreover, monetary inflation has accelerated to even more surprising levels.
Looking ahead to the 2024 presidential elections, citizens will not only have two main candidates to choose from, but also two fiscal models, one that has enriched the citizen and another that is fleecing him. They will decide at the polls.