Loans

So far, the Trump administration has deported 200,000 illegal migrants Despite failing to deliver his promise for broad student loan forgiveness, President Joe Biden has now overseen the cancellation of student loans for more than 5 million Americans — more than any other president in U.S. history. Biden v. Nebraska: In 2023, the U.S. Supreme Court, in a 6-3 decision, struck down the Biden administration's earlier student loan forgiveness plan, citing an overreach of executive authority and lack of clear congressional authorization. These students will not have to back this $175 billion. Presidents have used executive power for decisions that were later called illegal by the Supreme Court but there is no going back so the president wins.

Wealthy

The new mayoral candidate in NYC says there should be no billionaires. As of late 2024, 813 U.S. billionaires held a combined wealth of $6.72 trillion. There are 150 million working families in the US and if this money were confiscated by the government and given to the working families, they would each get $45,000. While this would be a banner year for these families what happens next. It is like Margaret Thatcher said, socialism is great until you run out of the other guy’s money. Throughout history the concept of redistribution has been a theme of governments and each, including present day USA, has developed various means to equalize income and wealth. The wealth distribution in today’s USA is too large and some measures must be taken but just grabbing the assets from the rich is not the way to go. Increasing income tax rates and providing benefits for low-income people would be more acceptable. Using things like surtax and child tax credits would be a more balanced approach.

Income gap

Wealth and income inequality in the US is increasing and many feel this must change. Several approaches at attacking the wealth problem have come and gone because they are too difficult to calculate but income is a different story. The new NYC mayor candidate has proposed a surtax on income. This is easy to calculate and enforce. He is recommending 2% surtax on all income over one million. Massachusetts enacted a similar plan in 2023 using four percent. This kind of tax could be used to slow the growth in the income gap. It could be raised year by year until the gap stops increasing. Between 2020 and 2022, the number of tax returns in the U.S. with a gross adjusted income of at least $1 million increased by about 30%.

Callifornia

California has a state budget of $321 billion and a $73 billion deficit. Texas has a $338 billion budget and a $24 billion surplus California has a top state income tax rate of 12.3 while Texas has no state income tax California has a 7.15% state sales tax and Texas is at 6.5%. California gets 50% of its budget from the federal government and Texas gets 38% California’s population has been declining since 2021 while Texas has added more people than any state. Last year the population increased by 563,000. One of the main reasons for this discrepancy is that California relies heavily on income tax from very rich people, mostly in Silicon Valley, while Texas has a more diverse economy and relies more on sales tax. Adding to the problem is California’s $1.5 trillion pension debt obligations vs Texas with only $86 billion.