Republican Tax Plan Falls Flat

Plus - Fatter wallets in the USA ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Another tense day with all eyes on the conflict in Ukraine. Here’s what you need to know about some key issues closer to home. --------------------------------------------------------------- Rick Scott’s Tax Plan Falls Flat We told you [yesterday]( about the "Rescue America" plan released by Sen. Rick Scott that laid out his blueprint for what the GOP should do if it takes back power in Washington in the 2022 and 2024 elections. The Florida Republican made it clear that he understands that some might reject his plan for being too radical – "I’ll warn you; this plan is not for the faint of heart," he cautioned in the introductory letter – and on Wednesday critics on both the left and right quickly proved him right. Ed Kilgore of New York Magazine, for example, [noted]( that the 50% cut in funding and workforce at the IRS Scott calls for might make it very difficult to enforce tax code, while the forced sunsetting of all federal legislation every five years – "If a law is worth keeping, Congress can pass it again," Scott said – would likely produce an unprecedented level of legislative chaos. But of the many parts of the plan that came under fire, one detail in particular proved particularly unpopular among both Democrats and Republicans: Reviving the Romney-esque conservative complaint that "over half of Americans pay no income tax," Scott called for all Americans to pay some kind of income tax so they "have skin in the game." Some critics noted that Scott’s complaint is incorrect as stated, since many of the low-income Americans who currently pay no federal income taxes do pay all kinds of other taxes, including state income taxes, payroll taxes and sales taxes. More broadly, critics wondered if it was such a good idea for a Republican senator to call for a tax increase on millions of people. Dave Carney, a Republican strategist, [told Politico]( that the proposal would not be popular among Republicans. "Tax increases — our voters don’t dig tax increases," he said. "To be fair to [Scott], I don’t know what the hell the context is. Generally, taxes are not very popular with Republicans." White House Press Secretary Jen Psaki echoed the point, charging that Scott’s plan would raise taxes on millions of Americans, "including on seniors and working families." Scott, who chairs the National Republican Senatorial Committee, responded to the barrage of criticism, saying that his proposed tax increase wouldn’t apply to the elderly or to those who are not "able bodied." But the damage appears to have been done, likely reducing the chances that Scott’s proposal will have its intended effect of rallying Republicans around his plan, at least as far as tax increases go. "It’s dramatically off-message for where Republicans are going on taxes — they shouldn’t be talking about raising taxes on anybody," Brian Riedl of the conservative Manhattan Institute [told The Washington Post](. "The GOP has moved away from the 2010 ‘makers and takers’ framework — so it’s a little outdated." Michael Strain, an economist at the conservative American Enterprise Institute, agreed, saying the Republican view on contributing to society has become more nuanced. "Raising kids is a contribution; working is a contribution; being a member of your community is a contribution," he said. "Yes, let’s have a stronger norm that everyone is a contributing member of our society — but I don’t know why that means everyone needs to contribute through a nominal income tax." Is It Time to Raise the Social Security Wage Cap? Americans earning $1 million hit a milestone today: After February 23, anyone with an annual income at or above that level has hit the payroll tax cap and paid all of their Social Security taxes for the year. In an op-ed at The Hill, Max Richtman of the nonprofit National Committee to Preserve Social Security and Medicare argues that in light of the program’s precarious finances, which could result in benefit cuts as soon as 2034, it’s time for Congress to raise the wage cap on Social Security taxes, currently set at $147,000. "In years past, 90 percent of wages earned in this country fell below the cap," Richtman writes. "Today only 83 percent of those earnings are subject to the Social Security payroll tax. Most Americans pay 6.2 percent of their wages into Social Security. But the effective tax rate for the wealthy is significantly lower, in some cases as little as .08 percent." Richtman calls on Congress to pass the Social Security 2100 Act from Rep. John Larson (D-CT), which would raise the income cap to $400,000 per year. The bill has nearly 200 co-sponsors. "The right path for lawmakers is not to cut benefits, but to expand them to meet the needs of seniors, workers with disabilities and their families," Richtman says. "The fairest way to fund such an expansion is by finally asking high earners to pay their fair share. If this wasn’t an obvious course before the pandemic, it certainly is now." Read [Richtman’s op-ed here](. Chart of the Day: Fatter Bank Accounts "Despite soaring inflation and multiple waves of covid-19, crisis-era stimulus that added an estimated $1.7 trillion to U.S. incomes left many families on strong financial footing at the end of 2021," The [Washington Post’s Andrew Van Dam]( writes Wednesday. While savings peaked last March with the arrival of the final stimulus checks, most households are still at least $500 ahead of where they were before the pandemic. The savings aren’t shared evenly, though, with high-income households hanging onto a higher proportion of their accumulated savings than low-income ones. 90% of Covid Test Orders Shipped, White House Says The White House’s senior adviser on coronavirus testing said Wednesday that 90% of the orders placed for free Covid-19 tests have been shipped. "It’s a lot of firsts. It’s the biggest test acquisition in history. It’s the fastest delivery of anything to this number of households," [said]( Dr. Thomas Inglesby. The White House announced last month that about 60 million orders for tests had been placed in the first 10 days of the program, and last week officials said that 50 million households have received their shipments. However, while some tests were shipped quickly, many households had to wait weeks to receive their orders, which in many cases arrived after the surge of the omicron variant of Covid-19 had already begun to fade, reducing the need for the tests. Inglesby said that the Biden administration worked directly with the United States Post Office and manufacturers – which include Abbott, iHealth Lab, Roche Diagnostics, Revival Health, Atlantic Trading, Siemens Healthineers – to increase the speed of producing and shipping the tests. The White House hired a senior executive from FedEx to help develop the plan. "For many companies, this was something that they had never done before on this scale, or at this speed," Inglesby said. "And so it was all in, from the companies and from the government side and the logistics providers, whether they were trucks or planes moving things around." --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Biden to Expand Russia Sanctions to More Elites, Nord Stream 2]( – Bloomberg - [Biden’s Full Plate: Ukraine, Inflation, Low Public Approval]( – Associated Press - [GOP Unites Around Blaming Biden for Ukraine Crisis]( – The Hill - [New Tax Plan From Leading GOP Senator Would Require All Americans to Pay Federal Income Taxes]( – Washington Post - [GOP Senator’s Call for All Americans to Pay Income Tax Sparks Criticism From White House]( – CNN - [Scott’s ‘Rescue America’ Plan Falls Flat]( – Politico - [US Postal Service Finalizes Plans to Purchase Mostly Gas-Powered Delivery Fleet, Defying EPA, White House]( – Washington Post - [US Vaccination Drive Is Bottoming Out as Omicron Subsides]( – Associated Press - [US Labor Market Is Even Tighter Based on Alternative Measures]( – Bloomberg - [Pentagon Approves Requests for National Guard as Trucker Convoy Eyes D.C.]( – CBS News Views and Analysis - [Two Years Into the Pandemic, America Has Become the Land of the Bulging Bank Accounts]( – Andrew Van Dam, Washington Post - [Rick Scott’s Bonkers GOP Agenda Shows Why McConnell Doesn’t Want One]( – Ed Kilgore, New York - [With Inflation High, People Are Talking About Price Controls. Is That a Terrible Idea?]( – Peter Coy, New York Times - [Say No to a Gas Tax Holiday]( – Maya MacGuineas, The Hill - [Rising Fuel Prices and Corporate Profits — Not Wages — Are Chiefly to Blame for Inflation]( – Irina Ivanova, CBS News - [Which Sanctions Would Hurt Putin the Most?]( – Timothy L. O'Brien, Bloomberg - ['Follow the Science' Is a Slogan, Not a Policy]( – Faye Flam, Bloomberg Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](