We thought at first that it must be an April Fool’s joke until we saw the date the story was posted. On April 3, Bloomberg reported that Republicans “are weighing the creation of a new bracket for those earning $1 million or more to offset some of the costs of their tax bill.”
Earlier in the year, Politico reported that members of the House Freedom Caucus were considering boosting the corporate tax rate to 25% to “pay for” a doubling of the cap on state and local tax deductions.
As our friend Steve Moore put it: “I mean, Republicans, are they crazy?”
“Crazy” is putting it mildly.
Let’s review why Republicans need their heads examined for this sort of talk.
First and foremost, it plays into the left’s big lie that the rich don’t pay their fair share of taxes. Take a look at the chart below, courtesy of economist Mark Perry. It shows the share of federal taxes paid by the top 1% of income earners compared with the share paid by the bottom 95%.
Notice anything? The trend has been steadily upward, with the richest Americans picking up an ever larger share of the income tax burden. Now, you could say that, well, the rich have gotten richer. But that doesn’t explain it. As Perry notes, the top 1% earned just over 26% of all income but paid more than 40% of all income taxes in 2022. And that’s after decades of supposed “tax cuts for the rich.”
Adding insult to injury, a tax hike targeting millionaires will raise far less money than promised because the rich will find ways to avoid paying those higher taxes. And it will only whet the appetite of Democrats for more soak-the-rich taxes.
Other reports say some in the GOP are considering boosting the corporate tax rate to 25%. Which is just as dumb, since companies are paying more in corporate taxes after Trump slashed the rate from a high of 39% down to 21%,
In fact, the entire package of Trump tax cuts paid for itself.
That’s right. When all is said and done, federal tax revenues are higher today than they would have been without the Trump tax cuts.
Before Trump signed his tax cuts into law, the Congressional Budget Office issued its revenue forecast for the next decade. Without any Trump tax cuts, it said the federal government would bring in $40.7 trillion.
After the 2017 tax cuts passed, the CBO cut its forecast to $39.6 trillion.
But by 2022, it admitted that it was woefully wrong. Actual revenues will turn out to be around $41.3 trillion, the CBO said.
The reason: the economy grew faster than it would have otherwise.
This is exactly what “supply side” economists predicted would happen.
And what do these same economists say will happen if you raise taxes? You will get less revenue than you hope. Either because the rich can find ways to avoid the bigger tax hit, or because companies will be less productive, or both. In any case, it will cut economic growth.
The rich won’t suffer. But working-class families will.
There’s one more reason talk of raising taxes to “pay for” other tax cuts is lunacy for Republicans: It undercuts Trump’s central message: that we should be taxing imports more and Americans less.
As we said, calling this “crazy” doesn’t go far enough. It’s more like schizophrenia with a touch of early-onset dementia.
Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day – without fear or favor.
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The U.S. State Department said a second round of talks between Russia and the U.S. was "constructive," after delegations from both sides concluded nearly six-hour discussions in Istanbul.
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Ukrainian President Volodymyr Zelensky said his intelligence services had documentary evidence that at least 155 Chinese nationals were fighting on the Russian side in its war on Ukraine.
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The Kremlin on Thursday dismissed comments by Ukrainian President Volodymyr Zelenskiy that China was being drawn into the conflict in Ukraine, saying that Beijing has a "balanced position".
China warned Ukraine against making "irresponsible" remarks after Zelenskiy said Ukrainian intelligence had revealed at least 155 Chinese citizens were fighting on the side of Russia in Ukraine.
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The U.S. ambassador to Ukraine is stepping down from her post after nearly three years in Kyiv amid uncertainty over the Trump administration’s attempts to broker a peace deal to end the Russia-Ukraine war.
The State Department said Thursday that Bridget Brink will be leaving her post in the near future, although it was not immediately clear exactly when she would depart. Brink assumed the post under former President Joe Biden’s administration and has been a staunch advocate for U.S. military assistance to Ukraine.
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A U.S.-Russian dual national jailed in Russia on treason charges was freed Thursday in a prisoner exchange with Washington, the woman's lawyer and U.S. Secretary of State Marco Rubio said.
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President Donald Trump warned Wednesday that Israel would “be the leader” of any potential military action against Iran if it refuses to end its nuclear weapons program.
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8. How Former French President Sarkozy Allegedly Received Millions From Libya's Gaddafi — France 24
The trial of former French president Nicolas Sarkozy came to a close this week, ending three months of exhaustive examination of allegations that the right-wing politician had struck a bargain with Libyan dictator Muammar Gaddafi to finance his 2007 bid for office.
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French prosecutors on Thursday requested a seven-year jail term for the former president.
9. Germany Is Back, Says Merz, After Sealing Government Deal — BBC
Merz, 69, said their agreement sent "a strong and clear signal" to Germans and the EU that they would get "a strong government capable of action".
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China’s expansion of its armed forces is “staggering”, NATO’s chief said on a visit to Japan beginning Tuesday aimed at “projecting” the alliance’s power in the Asia-Pacific region.
“Let us not be naive about China,” secretary general Mark Rutte told the Japan Times.
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China is reaching out to other nations as the U.S. layers on more tariffs in what appears to be an attempt to form a united front to compel Washington to retreat.
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Facing the cratering of global markets, Trump on Wednesday backed off his tariffs on most nations for 90 days, saying countries were lining up to negotiate more favorable conditions.
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Australia on Thursday declined Beijing's proposal to work together to counter U.S. tariffs, saying instead it would continue to diversify its trade and lower its reliance on China, its largest trading partner.
"We are not going to be holding hands with China in respect of any contest that is going on in the world," Deputy Prime Minister Richard Marles told Sky News, referring to the Chinese ambassador's proposal for countries to "join hands" on trade.
13. Taiwan Could Buy $200 Billion More From US, Increase LNG Imports As Part Of Trade Deal — Reuters
Taiwan state-backed bodies could over the next decade buy an extra $200 billion from the United States and bump up the percentage of LNG it gets from the county by one-third to help narrow the trade deficit, the economy minister said on Thursday.
Taiwan President Lai Ching-te on Sunday pledged to seek a zero tariff regime with the United States and buy more from and invest more in the country, and said that Taipei would not retaliate in response to U.S. tariffs - now put on pause by President Donald Trump.
14. India Seeks Quick US Trade Deal As Trump Tariffs Paused — Reuters
India wants to move quickly on a trade deal with the United States, a government official said on Thursday, after President Donald Trump's decision to pause reciprocal tariffs on dozens of countries, while hiking levies on China.
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The Chinese Defense Ministry has criticized the United States for selling F-16 fighter aircraft to Taiwan and the Philippines.
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The United States stands strong with our allies and partners in the Indo-Pacific, and we continue to take decisive actions to counter threats, enhance economic resilience, and advance shared interests.
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17. Ex-Facebook employee accuses Meta of 'betraying US values' and collaborating with China — France 24
Former Facebook executive Sarah Wynn-Williams, who wrote a scathing memoir about parent company Meta, has accused the social media giant of "betraying US values" and undermining national security by collaborating with the Chinese government on US artificial intelligence projects.
18. U.N.: Men With 'Wrong' Hairstyle, Women Speaking In Public Targeted Under Taliban Law — UPI
The Taliban's morality police – some 3,300 officers vested by the regime to enforce its so-called "Propagation of Virtue and Prevention of Vice" laws – routinely detain Afghans for having the wrong haircut or beard-style and not attending mosque for daily prayers, the United Nations said Thursday.
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The SEC welcomes new leadership as its incoming chair vows to overhaul crypto regulation, signaling a powerful pivot toward innovation, clarity, and pro-growth digital asset policies.
The U.S. Securities and Exchange Commission (SEC) issued a statement on April 9 confirming the appointment of Paul Atkins as the agency’s next chairman.
In a congressional hearing last month, Atkins said the lack of regulatory clarity in cryptocurrency markets is hindering growth and creating uncertainty. “Since 2017, as I have led industry efforts to develop best practices for the digital asset industry, I have seen how ambiguous and non-existent regulations for digital assets create uncertainty in the market and inhibit innovation,” he stated. “A top priority of my chairmanship will be to work with my fellow commissioners and Congress to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach,” the incoming SEC chair affirmed.
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