WKXL - New Hampshire Talk Radio
Facing the Future | Tax Policy on the Campaign Trail
This week on Facing the Future, we'll take a preliminary look at the tax policy proposals of former President Donald Trump and Vice President Kamala Harris. In addition, we'll consider the tax policy implications of a case recently decided by the U.S. Supreme Court. Our guest is Steven Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.
- Duration:
- 44m
- Broadcast on:
- 25 Jul 2024
- Audio Format:
- mp3
"Well, the first thing I think he would do would be to stand up and tell the truth. I mean, he had a great expression that was "just tell the truth and watch him scatter." "Well, the further way the problem is, the easier it is to postpone the action on it. And that's essentially what we're doing." "Be real." "Because people in New Hampshire are really cool." "I'd say get in the game." "This is a problem facing your generation. You have to have a voice in the decision." "Welcome to Facing the Future, brought to you by the Concord Coalition on WKXL, New Hampshire's Talk Radio Station." "I'm your host, Bob Bixby. Each week we take a nonpartisan dive into topics related to the federal budget, the economy, and how they affect our nation's future. This week we'll plunge back into the tax code. First we'll revisit a case recently decided by the U.S. Supreme Court, called Moore versus United States, that considered the constitutionality of a one-time tax imposed on American shareholders of an American-controlled foreign corporation. It turned out to be a rather narrow decision, but it leaves some big questions unanswered and we'll look into those. Then we'll look at some of the tax policies proposed by former President Trump and Vice President Kamala Harris. Our guest for all of this is Stephen Rosenthal, senior fellow at the Urban Brookings Tax Policy Center at the Urban Institute where he researches, speaks, and writes on a range of federal income tax issues with a particular focus on business taxes. Joining the conversation is Concord Coalition Chief Economist Steve Robinson. Stephen just is a little bit of, and by the way, just to keep things from getting too confusing, I'm going to refer to our guest as Stephen and to Steve Robinson as Steve's, so we won't get too confusing here. Stephen, like a lot of tax policy experts and budget watchers, you've been watching this more case closely, and we don't usually focus on one particular case, but this one had broad implications for the tax code, and it turned out maybe to be a bit of a fizzled out case in terms of the broad implications, but there are still, as you wrote in a blog recently, some big questions still remaining. So why don't you give us a little bit of the background of what the case was about and then, you know, how the court handled it. Sure, Bob, nice to chat with you today, you and Steve. The more case is one of the biggest tax cases we've seen in a century, and potentially, the more case, a pretended disaster for our tax code, potentially. However, the Supreme Court ruled narrowly sticking to the facts at hand and restraining itself from wider pronouncements about the constitutionality of other swaths of our tax code. And so in the immediate term, there's very little to the tax code that will be upended. However, the court signaled at least half of the judges, four of the judges, signaled that they were skeptical about many of the code provisions that have been drafted, at least using what is known as a departure from the realization principle, that is that cash needs to be realized before it's taxed. So I expect lots of challenges going forward. Let me go back in, just said a little bit of the factual background here. The Moores invested in a foreign corporation, American-controlled foreign corporation. That corporation earned profits, which they did not distribute to their shareholders, and so they had never distributed any money, as I understand it, to the Moores. When Congress passed the, what do they call it, the Repatriation Tax, mandatory repatriation tax in 2017, part of it was this one-time tax on the attributable earnings of the corporation to the shareholders, which included the Moores, and so they had to pay tax on this money that had been earned by the corporation but not distributed to the shareholders. It's not really that confusing. The money had been earned and realized by the corporation, and the income was attributed to the shareholders and tax to the shareholders, and I guess so, the Moores were arguing, we never got the money, so we shouldn't pay the tax. Well, that's correct. The Moores challenge was to the taxation of their share of a foreign-controlled corporation, a corporation that the Moores and a couple of other U.S. shareholders control, only own. They claim that the Moores claim that the $15,000 that had been earned by the foreign corporation had not yet been distributed to them, and without a distribution or dividend to tax U.S. shareholders on offshore profits was unconstitutional. Now, I said earlier that the case was decided narrowly because this case was never about the 2017 restructuring of our international tax rules that forced the Moores to pick up a small amount of dollars that had been parked offshore in a controlled corporation. Other the case was used as a vehicle to question a lot of other tax provisions in today's code, as well as question prospective tax provisions like billionaire taxes, taxes that are collected without any cash being distributed. So the Moores case itself was rather modest, both in terms of its implications for the Moores, $15,000, and the fact that the tax liability was a reflection of a one-time transition role. I mean, as a matter of fact, the Congress restructured international taxes in 2017 because there was a very large problem with offshore profits. U.S. multinationals had parked $2.6 trillion or more offshore without repatriating them and paying taxes. And so the Congress has part of a transition to a new international tax regime that prevented U.S. multinationals from parking their cash offshore also was going to collect a tax or reduce tax as a transition fee. The Moores didn't like that, but I think the Moores cared more about, again, billionaire taxes, a lot of the taxes in our tax code on capital that are collected even though no cash has been distributed. And Congress in recent years on the last few years has focused on the huge wealth disparities, the massive amounts that billionaires have accumulated, and there are a variety of tax provisions to tax those that wealth. And there are those who argue that that would be unconstitutional. And that was actually, in my view, the reason the court took up the case. However, the court never reached that principle. Four of the justices would have gotten there, but the majority, the slender majority said we'll have to hold off for another day. Yeah, I mean, this was sort of a situation where the Moores and their supporters tried to force an issue that was not, they brought a case that was actually not the case they wanted to bring. I mean, as Stephen was suggesting, there's been a lot of debate recently about whether the Congress can enact wealth tax, and the difference between an income tax and a wealth tax is that if you earn income, we tax it under the 16th Amendment. But if you have wealth, if you hold property, stocks, bonds, some asset that has a value, if you get interest, dividends are capital gains, that's income and we tax that. There's been suggestions that we should tax the actual wealth. So let's suppose you're in a Warren Buffett or whoever and you own all of these stocks, and the value of the stock goes up. Right now, you only pay taxes if you sell the stock and it's a capital gain and you pay taxes on the capital gain. There have some who've argued that we should tax the increase in value even if you don't sell the stock. And so this argument that we should tax wealth and not income is a distinction that the Moors were trying to make in their case, where they owned stock in a foreign corporation and they tried to argue they were being taxed on the value of the stock. But the facts of the case were that they were not taxed on the value of their stock. They were taxed on the income that accrued to the company that they owned the stock of. So the courts simply tried to draw a distinction that the question of whether your income is realized as capital gains or interest dividends or whether you have simply an increase in the value of the stock, a wealth, a change in your wealth, they said, well, we're not going to decide the question of wealth taxes today. What we're going to say is the Moors indirectly realized income because the corporation that they had invested in earned the income. And so they ruled very narrowly and said, this is a question about whether income was realized and yes, the corporation that they invested in realized income and clearly Congress has the authority of the ability to tax income that's realized. And so that's essentially how the court decided the case. You're listening to "Facing the Future." I'm your host Bob Bixby. Steve Robinson and I are talking with Stephen Rosenthal from the Tax Policy Center about a recent Supreme Court decision that has implications for the future of the tax code. We'll be right back after these short messages. Welcome back to "Facing the Future." I'm your host Bob Bixby. Steve Robinson and I are discussing an important tax case called "More versus United States." That was decided last month by the United States Supreme Court. Our guest is Stephen Rosenthal, Senior Fellow at the Urban Brookings Tax Policy Center. And when we left off, Steve was making an observation about the court grappling with the concept of what is income for purposes of Congress's power to tax. And Stephen, I wanted to give you a chance to expound on that weighty question. Steve correctly observes that there was a lot of angst about wealth taxes, at least among the wealthy. And there has been a lot of amicus and a lot of editorials in the Wall Street Journal and elsewhere, suggesting the court ought to block Congress from pursuing wealth taxes on the grounds that there is no income that's taxed under a wealth tax. And so this becomes a semantic question. And the court chose not to answer that semantic question of what is income and when is income realized. Instead, the court just said income has been realized in this case that offshore corporation had realized profits. And the court sidestep preempting, the majority opinion, preempting a billionaire taxes. But importantly, it also sidestep upending a variety of other tax rules that collect taxes without income being distributed. Our partnership tax rules, our international tax rules with offshore corporations are generally tax rules on capital, like zero coupon bonds, in which no interest is paid currently, but our tax rules require a holder of a zero coupon bond to pay tax before the bond matures. Not the court gone down the path of trying to tease out what is income for income tax purposes. That could have resulted in the upending of our tax code. It did not go there. It decided the case narrowly along the lines of, hey, there was income realized here. I mean, you wrote on your blog that there's probably more to come. I mean, no pun intended, but I mean, there's, are you expecting that there will be other cases that may be tee up this issue better than the facts of this case did. I think so. This case really was ill suited for the Supreme Court to take up the issue. Again, small dollars at stake, a transition rule that was of little consequence, you know, at least on a go forward basis, and no split in the courts, the circuits, yet there was a lot of interest in trying to get an answer to the question of when is income realized and when can income be taxed without having been received. And there are at least a dozen other code sections that can be challenged on grounds similar to the challenge to the transition tax. And for the justices in the minority and a concurring opinion, signal that they were receptive to adding a very tough realization rule before income could be taxed. And that's a departure of what the court had signaled in the past. So for justices that are already there, the majority fine, which was comprised of the liberal justices with Roberts, the majority said, well, we don't have to get into that issue yet. And so what time will tell there will be other challenges and time will tell whether this court wants to up end our tax code. Eve. Yeah. And I think Stephen's right. I mean, this was the wrong case at the wrong time to try to make this, you know, try to force the court to make this global determination as to, you know, whether we can tax wealth or not. I mean, clearly the facts of this case didn't support a decision on that question. And so the court, I think wisely sidesteped it. Yeah. I think that when I was reading it, the opinion seemed almost repetitive. Justice Kavanaugh kept explaining that there was income realized here and it was administrative convenience, a choice of the Congress, whether they wanted to tax the corporation or tax the shareholders and that, you know, case closed. There was income realization. So we don't have to reach the question that everybody was worried about. Because when we say up end the tax code, I mean, there's a lot of money at stake. I mean, this is why a budget people have watched this case closely because, you know, if the Supreme Court ruled that certain tax rules are unconstitutional because there isn't quote unquote realization, you know, that could cost the federal government trillions of dollars at a time when we don't need that is, I mean, is that an issue, Stephen? Sure, certainly trillions of dollars were at stake, both with current roles and perspective roles, but also just Congress's ability to lay and collect access has been questioned. And the Congress dodged a bullet with the more case, but they may not dodge the bullet with the next case that may yet come come down the road. And so I fear for Congress's ability to deal with the complicated circumstances that require some flexibility on how Congress views income and how Congress lays and collects taxes, especially with international transactions and capital transactions. They're very sophisticated, they're very complicated, and Congress needs more flexibility than at least for the justices willing to give Congress, I believe. Well, here's a former appellate law clerk, not at the Supreme Court level, but Congress, if the court goes down that route, they're going to be turning themselves into a super tax court because, I mean, if they're going to have to go through case by case to find out. I mean, it does seem to me that if they go down that route, and as you said, for the justices seem inclined to do so, it seems to me they would be taking on additional work and trying to go through the tax code, which is very complex, and deciding on an individual basis which provisions meet the constitutional standard. Well, I think this court seems willing to take on additional work if that means additional power. And so in the more case, the court not yet seized the power of Congress to lay and collect taxes or at least confined it quite narrowly. It looks as if that may be coming down the road, but there was another Supreme Court case decided the following month, Loper Bright, in which the court clearly articulated its view that the courts, not the executive branch interprets laws. And in that circumstance as well, the Loper Bright case and how the courts look to the executive branch, the court was quite willing to take more power away from the executive branch for itself. So in combination, that more case and the subsequent case, Loper Bright, to me signals that the Supreme Court is going down a path to aggrandize more power itself. I don't know how they're going to handle it, especially in the tax area, which is so complicated and takes so many resources to get right. Yeah, I was thinking of that other case that you mentioned as I was reading this one. It seemed to be consistent in some sense of the court inserting its own powers. But it sort of upsets that administrative convenience, that whether it's the tax code or the administrative law, that we have developed over the years, and it would be resulting a lot more litigation. Steve, any concluding comments about more versus U.S.? No, just I think that there's more to come. Well, we'll certainly be keeping an eye on that. I did notice that at one point, Justice Kavanaugh seemed to be worried about the fiscal future because he noted as a passage, I thought I had suddenly wandered into a conquered coalition issue brief. He said something about how the Moore's interpretation would upend the tax code and cost the federal government trillions of dollars, and there was nothing about the constitution that required such a fiscal calamity as he referred to it. So we'll wonder, in those future cases, if the court is still sensitive to setting off some sort of fiscal calamity by how they interpret the Supreme Court, but that'll be how they interpret the tax code. But that will be a cliffhanger that we'll have to wait for a future case that undoubtedly is already bubbling up. You're listening to Face in the Future. I'm your host by Bixby, Conquered Coalition Chief Economist Steve Robinson and I are talking about the U.S. tax code with Stephen Rosenthal, Senior Fellow at the Urban Brookings Tax Policy Center. We're going to take a brief break, and then when we come back, we're going to be looking at some of the tax policy proposals from the presidential candidates, former President Trump and Vice President Kamala Harris. We'll be right back after these short messages. Welcome back to Face in the Future, I'm your host Bob Bixby. Steve Robinson and I are discussing tax issues with Stephen Rosenthal, Senior Fellow at the Urban Brookings Tax Policy Center, and in this segment, we're going to turn our attention to the tax policy proposals being made by the presidential candidates that would be former President Trump and now Vice President Kamala Harris. Stephen, you've been looking at these things and there might be some areas where we can discuss them together, but why don't we first begin with some of the major Trump proposals and then we'll talk about proposals that Kamala Harris made when she was in the Senate and running for President before, things that might be more uniquely associated with her than with the Biden administration. So let's begin with the former President Trump and what are the major tax policy proposals that he has put forward? You might yet be able to bucket them, that is some Trump proposals run exactly contrary to what Harris would suggest. Others are Trump specific or Harris specific and some they might yet agree on, but let's talk about Trump's big tax proposals. One that of course Harris opposes diametrically is extending the tax cuts and jobs there. There are a variety of tax rates that will expire, individual tax rate cuts, state tax rate cuts, and other measures in 2025 and Trump wants to extend all of those. Recall the Tax Cuts and Jobs Act in 2017 is Trump's crown jewel of his first term and so Trump wants to double down, not just extend, but actually say lower corporate tax rates even further from, it went from 35 to 21 in 2017. Trump suggested going down to 20 and if he could down to 15. So that's one big item, how should we look at the Tax Cuts and Jobs Act? But then Trump has a few items that are unique to him. This month he proposed no taxes on tips, he proposed that in Nevada which is very attractive to a lot of Nevada residents. Trump has specific to him also a very aggressive view of tariffs. He suggested a 10% tariff across the board and a 60% tariff on imported goods from China. Tariffs are basically another word for tax and I think most economists believe they fall on consumers, but they also went to some degree protect US industry, which is Trump's goal. And then as a last item just to signal, there were tax measures in the so-called Project 2025, which is comprised of a lot of former Trump and current Trump advisors. Many of them like measures, at least from tax, that Trump also has adopted, like higher tariffs and cutting tax rates even further than the Tax Cuts and Jobs Act. But some of them signal where the conservatives, or at least the brand of conservatives that Trump has been promoting in recent years, might like to go like a consumption tax. So those are the big items. I don't know, Steve, did I miss any? That seems to be the list I had, so I think you covered certainly the major provisions. Well, the Tax Cut and Jobs Act of 2017 is kind of the big issue for both candidates because the, as you mentioned, the several provisions are going to expire during the first year of the next presidential term. And so what the candidates are proposing to do is it needs to be taken seriously because that some, this is what we call an action forcing event. These provisions will expire without Congress taking action. So it's interesting to see what they're proposing. And you mentioned that we could maybe take some of these in individual buckets. So we could look at, you mentioned that Trump would want to expand to extend those tax cuts and maybe even have some more. What is Vice President Harris' position on the expiration of those tax provisions? Well, I think Vice President Harris would like to see the 2017 Tax Cuts and Jobs Act repealed in the whole. And so not only would she be resistant to extending them, and it's mainly the individual tax measures that need extension because the corporate tax cuts were permanent. But I think Harris would like to revisit those corporate tax cuts and repeal those as well and move back towards that 35% rate. We can get into it a little bit more about what she would do with that. But so let's put a pin on that and we'll get back to it with the no-tips tax. We don't need to spend too much time with it, but it's the sort of thing that catches fire as a political issue, particularly because it came up in Nevada. And the Democratic Senators in Nevada have gotten on board with it in various forms. And is there any rationale for excluding tips from income, which is when I learned in law school what income was, it was income as income from whatever source derived. I can't imagine why tips would be excluded. Well, yeah, let me jump in here. I mean, this is one of those issues. I mean, if you think about the big debate we've had for years and years about the minimum wage, and the argument is, you know, have low paid workers, the minimum wage isn't high enough. And so all the states have taken upon themselves to increase the minimum wage. But one thing that's unique to the restaurant and service industry is what's called, you know, the sub-minimum wage or the tipped minimum wage. And that is that if you're in a job that provides tips, your employer does not have to pay the regular minimum wage. He can pay a lower minimum wage because the assumption is that the tips will make up the difference. So from, you know, from a public policy perspective, you know, we've gone out of our way to recognize that tips are a substitute for wages by allowing tipped employees to be paid a lower minimum wage. And so to say that tips are not income, and therefore not taxable, runs completely contrary to that. I mean, the other thing that's interesting, I mean, you know, I've seen some data on this. And you know, tip income, I think back in 2020 or 2021 was about $38 billion. So you know, it's not huge in the scheme of, you know, there's 15 trillion or whatever in an adjusted gross income. So the tip share of adjusted gross income is pretty small. But since COVID, I mean, I don't know what your experiences have been, but literally every time I go into a restaurant now, not a sit down fancy restaurant, but you know, you're going to fast food restaurants and you have, they have the little credit machine thing on the counter. And when you order, the first thing that pops up after you order is how much would you like to tip. So meaningfully, even in fast food restaurants, they're asking for tips. So I have no idea since, you know, in the last couple of years, tips, income is likely to have gone up. And you know, we're Congress to say, look, we're not going to tax tips any longer. What other businesses would be incentivized to say, Oh, this is great. I don't have to pay taxes. My employees don't have to pay taxes. I mean, if you exclude it both from income and payroll taxes, that that's the savings to the employers as well. And there's going to be a huge incentive, economic incentive for more and more businesses and more and more employees to look for tip income. And so, you know, whatever you think this might cost based on what tips used to be, you know, there's been some shifts in the economy that suggest that this cost could be dramatically higher. But you know, I think that that's something that policymakers probably haven't focused on. So, Steve from a tax policy standpoint, we usually evaluate a proposal on equity, efficiency, and simplification grounds and equity, you know, why should somebody who earns more of their compensation through tips be taxed more lightly than someone who does not. Efficiency, well, we would expect a lot of distorted behavior if tips are tax free, more people as you suggest people claim tips. And simplification, you know, how would the IRS ever draw roles to start distinguishing wages and compensation from tips, especially in light of, as you suggest, the increased interest in having more tips. So from a tax policy standpoint, I think the answer is a resounding no, this is a very bad idea. But we're talking tax politics, they're not tax policy, I'm afraid. I know, that's, well, you have to have to consider both. But I do think that it would just open just an enormous loophole for creative categorization of income. You're listening to face in the future, I'm your host Bob Bixby, Steve Robinson, and Steve and Rosenthal from the Urban Brookings Tax Policy Center. And I are discussing tax issues during the presidential campaign, and we'll be right back after these short messages. Welcome back to Face in the Future, I'm your host Bob Bixby. Steve Robinson and I are discussing tax policy with Steven Rosenthal, senior fellow at the Urban Brookings Tax Policy Center. And we've been looking at some of the tax policy proposals of the presidential candidates. I want to turn now to the subject of tariffs. Steve, why don't you get us into this discussion? Well, and I think as Steven mentioned earlier, I mean, the word tariff starts with the T that implies that it might have some relationship to a tax, and in fact, it does. I mean, essentially the idea behind a tariff is that when companies, businesses, import goods from overseas, they're charged a tax, which is called a duty or a tariff. And essentially, anything that's imported, you have to pay this extra fee to the government. And it's generally viewed as a tax on imports, and those taxes tend to get passed on to consumers. And so, if you're worried about rising prices and inflation, taxes on tariffs or taxes on imports, which are known as tariffs, probably are not good news. Now, of course, whether you're going to impose tariffs across the board, which President Trump has suggested perhaps a 10% tariff on all goods is a way to fund the government. And also a higher tariff is as high as 60% he suggested for imports from China. Now, obviously, if your business is competing with Chinese imports, you might view this tariff as a good thing because it makes the price of your competitor's goods higher. And so therefore, it makes it easier for you to sell your goods. And so, it tends to be viewed as what's called a protectionist policy. And protectionism is usually good for those industries that are protected, but it's generally bad for everybody else, particularly consumers. Of course, the other problem is we don't always import finished goods. We often import component parts, and those parts go into other goods. And so what generally happens is that you can make US goods uncompetitive because we've increased the price of the components that go into those goods. So generally, tariffs cut both ways. They tend to favor some industries and help them, but they tend to disfavor other industries and as well as consumers. So it's certainly a mixed bag from an economic perspective. From a revenue perspective, I think from the time President Trump took office, the revenue that we receive from tariffs and duties went from about 30 or 40 billion up to close to 100 billion. So you know, out of the, I don't know, roughly three, no, actually, I'm sorry, roughly four and a half trillion in revenue that we collect every year that we'll collect this year. You know, tariff revenue is really a drop in the bucket. Obviously, if you increase the rate that we imposed on imports, you could collect more revenue. But it's questionable. Trump, at one point, had suggested replacing the income tax with a tariff, but that's simply not realistic. You'd have to tax tariffs at 70% or so to try to replace the revenue. And if you imposed rates that high, obviously, people would stop buying them. It's sort of like, you know, the idea behind cigarettes is we're going to tax cigarettes to raise money. But if you raise the tax high enough, people are going to stop buying cigarettes and or you're going to have a big huge black market in cigarettes in order to avoid the tax. And so the government ends up collecting very little revenue when it tries to impose, you know, excessively high taxes. Stephen, you want to talk about the tariffs and maybe we could transition into Harris's proposals because a Biden administration has, you know, been a little bit friendly as a tariffs than we may have thought when they began. Well, that's right, Bob, historically, both Republicans and Democrats were more free market and less protectionist. Trump clearly is protectionist. And I think he shifted the discussion towards him. And in recent months, and actually, since to some degree, the start of the Biden administration, Biden has been more receptive to some tariffs, not as large as a tariffs that Trump has advocated, but various protectionist measures, for instance, the green energy that Biden would like to build in the US includes some tariff related measures. Now, let's shift to Vice President Harris. We don't know where she stands on tariffs, although she probably will follow something similar to Biden's plan and approach to tariffs. And we don't know where she stands on other tax policies, whether she will embrace all of the policies that Biden has included in his campaign, or whether she will pursue some of her own. And I actually think she will yet pursue some of her own. What we do have is a pretty strong record as the short period of time that she was a US senator, some tax measures that, to me, helped define her perspective on taxes. What she's best known is something called the lift act, level income for families today to lift the middle class. And that lift act was a refundable tax credit for low income workers, sort of like our EITC, but more broadly targeted to low income workers without children, not just as EITC does, focus exclusively or nearly exclusively on workers with children. And it's a matching of $3,000 for the first $3,000 of, say, wages of singles and $6,000 for joint, for married couples, joint returns and the like. It really would have the impact of providing a real strong incentive for the bottom two income classes, and especially for the young. Some of our work at the Tax Policy Center reflects on the disproportionate benefit from Harris's proposal to help with more refundable credits for working low income workers. And from my perspective, I think focusing on the young is better than lambishing more benefits on the old. Not with saying the fact that I've now become a senior citizen myself. It does seem as if we invest far too much for the old and far too little for the younger generations. And maybe we're going to see a shift to a more funding for younger workers and younger families. We'll see. Well, before you get into, well, maybe this is where you were going to go, but I was just going, I think she had a proposal for how to fund this that's related to the TCGA. Yes, for this proposal, she suggested repealing the TCGA to fund the Tax Guts and Jobs Act to fund her lift tax credits. It would not be enough. I think she also suggested she would pursue taxing capital income more heavily, like capital gains as ordinary income and the higher tax rates. But that's where she would signal that she'd find the money, which is quite large. We estimated the Tax Policy Center that over the 10-year budget window, her lift act would cost like $2.7 trillion, a large amount of money. And I think it actually would need a lot more than, say, the $2 trillion loss that we incurred from the Tax Cuts and Jobs Act. But that's where she is on one of her Senate proposals. Now, she actually has big plans on the spending side as well. If you recall, when she ran in the primary, she wanted Medicare for all, and she suggested propose funding that with a financial transaction tax, a tax on stock trades of 0.2%. And so, again, she's thinking large, and she's thinking about large tax increases to offset some of these larger expenditures, whether they're tax expenditures through credits or spending. And the last question is, we wrap up, one of President Biden's signature promises was that nobody making under $400,000 a year, no household would get any increase in tax. I wonder if we know whether Vice President Harris has spoken on that subject. I don't know if that's part of her tax policy proposal. Well, as you know, President Biden pledged not to raise taxes for those making less than $400,000. During Vice President Harris' primary campaign, she pledged not to raise taxes for those making less than $100,000, which would allow the government more flexibility than it is the government could raise taxes between $100,400,000. My personal perspective is that flexibility is warranted. I would rather not see these campaign pledges that tie the fiscal hands of our elected officials. But politics are politics, and I'm not sure Vice President Harris can back away from President Biden's $400,000 pledge. No, I don't know, Steve, how you feel about the politics here, I think it's tough. Yeah, I mean, anytime a politician makes a campaign promise, he runs the risk of backing himself into a corner, and then when he actually gets in office, he discovers that the promises don't quite add up with what he needs to do, and that's the problem that you've seen. It's not a perennial problem. I had no idea how bad the problem was, and so now I'm going to have to change my campaign promises. Anyway, we'll worry all about that in January. Thank you for listening. I'm your host, Bob Bixby. You've been listening to "Facing the Future," Steve Robinson and Steven Rosenthal, and I have been discussing the tax policy proposals of the presidential candidates, and we'll be back next week with another edition of "Facing the Future." [MUSIC PLAYING]