Core Viewpoint - The proposal to eliminate income tax, suggested by President Trump, has garnered significant attention and debate, with economists deeming it largely unfeasible under realistic financial conditions [1][2] Group 1: Budget Implications - The removal of federal income tax could create a budget deficit of approximately $2 trillion annually, fundamentally disrupting the U.S. economy [3][4] - Federal income tax is the largest source of revenue for the government, and its elimination would severely impact funding for essential programs such as Social Security, Medicare, and military spending [4] Group 2: Replacement Taxes - To address the budget shortfall, alternative taxation methods would likely be necessary, including a national sales tax potentially ranging from 20% to 30%, increased payroll taxes, or new taxes on wealth and consumption [5] Group 3: Economic Effects - Short-term benefits could include increased take-home pay for workers, particularly high earners, and a boost in investment and business activity [6] - However, potential negative consequences may arise, such as higher deficits, increased sales taxes, and cuts to federal programs [6] Group 4: Distributional Effects - The shift from a progressive income tax system to a regressive sales tax system would disproportionately benefit high-income earners, investors, and corporations, while adversely affecting lower and middle-income households, seniors on fixed incomes, and families with high consumption but low savings [7]

UK businesses are turning to the self-employed in an effort to rein in costs as they try to navigate Chancellor of the Exchequer Rachel Reeves’ £26 billion ($34.5 billion) payroll tax hike https://t.co/2zkLvm9hHQ ...

Medicare Tax - Medicare wages are employee earnings subject to the U.S payroll tax known as the Medicare tax [1]

Economic Impact - UK employers are facing a more significant financial burden from the payroll tax hike than originally anticipated [1]

Britain’s economy lost jobs again in June as the Labour government faces growing criticism for lifting the minimum wage and imposing a £26 billion payroll tax hike on companies https://t.co/7PGhS3z0Yb ...