Index Minimum Wage? Do the Tax Code, Too.

By Steve Haner

One bill that certainly is heading for Governor Glenn Youngkin’s desk is the increase in the state’s minimum wage to $15 an hour as of two years from now. Both versions, House Bill 1 and Senate Bill 1, raise it to $13.50 for next year, with the $15 level kicking in a year later. Both bills are now out of their first committees.

It was a campaign promise. The Democrats in both chambers coordinated to make it their first bill of the year on both sides. Smart marketing. Soon the Republican governor must decide whether it becomes his first veto, with Republican legislators then having to vote to sustain it or not.

Which of course just tees up the issue as red meat for the 2025 statewide elections, with similar campaign promises and political claims that Republicans want to exploit workers. The days when some business-savvy Virginia Democrats might express concerns that rising wage rates will depress job creation are long gone. That critter is extinct.

When I graduated high school, the minimum wage was $1.60 per hour, which, using a basic inflation calculator translates to just under $12 per hour for 2023. If there is to be a minimum wage at all, it should have nexus to either inflation or the actual base wage employers are having to pay in the current market for unskilled labor. So, $15 for two years from now, given current inflation, has a rational basis.

But of course the bills do not stop there. Both versions of the bill, and this was also an element of the 2020 minimum wage legislation Governor Ralph Northam (D) signed, begin to increase the minimum wage annually. It goes on autopilot, adjusting pay up (but never down) for the Department of Labor’s urban consumer price index (CPI-U) in 2027 and after.

Virginia has already done this with its gasoline taxes, which now rise automatically each summer. And no legislation is necessary for inflation to increase the state’s take from income and sales taxes. If Democrats want to be honest about adjusting things for inflation, they must do the same with the state tax provisions. The standard deduction, personal exemption, and tax rate bracket amounts should all be adjusted annually to reduce the sting of inflation.

Even with the recent increases in the standard deduction (which are not permanent, you must remember, but expire after 2025) a person earning minimum wage for a full year will owe Virginia personal income tax.

No fiscal impact statement on these bills has been published, but when it shows up, if it fails to note that the state itself will be a huge winner, reaping millions in additional tax revenue, the evaluation will be totally dishonest. Government wins big.

As was clear from the testimony on the bills, the unions are the ones who extracted this promise from Democrats. Most union jobs pay substantially better than the minimum wage, but as the bottom floor rises so will all the other stops on the income elevator. This is proof Democrats really do understand the “a rising tide lifts all boats” concept. So again, as wages rise across the board, so do treasury receipts.

And as much as unions love inflation, government, with its reliance on personal income taxes and sales taxes is downright addicted to inflation. Causing inflation is a conscious financial strategy, until it gets out of hand, as it has in the past three years. If the higher wages raise the price of, say, a fast food meal, then the sales tax receipts rise, too. That better show up in the fiscal impact analysis. But it won’t.

No increase in the minimum wage should be considered until and unless the income tax provisions are tied to the same CPI index in exactly the same tax year. In the case of these bills, that would be with tax year 2025. It should have been part of the decision in 2020, but better late than never.

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110 responses to “Index Minimum Wage? Do the Tax Code, Too.”

  1. James Kiser Avatar
    James Kiser

    The state is all and all are the state. VA Democrats

  2. If Democrats want to honest about adjusting things for inflation, they must do the same with the state tax provisions. The standard deduction, personal exemption, and tax rate bracket amounts should all be adjusted annually to reduce the sting of inflation.

    That, plus tying these rates to the CPI should cut both ways. If the CPI drops, then so should the minimum wage, gas taxes, standard deduction, personal exemption, and tax rate bracket amounts,

    1. Eric the half a troll Avatar
      Eric the half a troll

      “If the CPI drops, then so should the minimum wage, gas taxes, standard deduction, personal exemption, and tax rate bracket amounts”

      If you want to use the CPI to reduce taxes, you might be waiting quite some time. The last time it was negative was in 2009 for a whopping -0.4%. Prior to that you have to go to 1955. To get anything meaningful, we would have to go through another Great Depression-type downturn.

      1. Cynthia Phillips Avatar
        Cynthia Phillips

        i was hoping someone else would say this. Isn’t this what SS is based on. if not it should be bsed on what ss is based on some years raises, some years not

      2. If you want to use the CPI to reduce taxes…

        I did not say I wanted to do that, so why did you bring it up?

        1. Eric the half a troll Avatar
          Eric the half a troll

          That is exactly what you said and I quoted. If the CPI drops, you said, taxes (specifically gas tax and tax rate) should be reduced. Granted the rate of tax increases could be justifiably reduced but to justify tax decreases based on the CPI, it would have to go negative.

  3. Bob X from Texas Avatar
    Bob X from Texas

    Thomas Sowell explains in “Basic Economics” that a minimum wage hurts people entering the job market.
    Politicians don’t listen to Thomas Sowell because he is Black and they are RACIST.

    1. Stephen Haner Avatar
      Stephen Haner

      No, they don’t listen because he doesn’t vote in their district. Give the Democrats this, they dance who who brung them.

    2. Teddy007 Avatar

      Many areas in the U.S. have minimum wages well above what is set by law. Without the higher pay, the companies would not have any employees.

      However, as the Republicans in California proved to the country, never listen to a Republican when they try to justify cheap labor. The Republican Party in California killed itself by underestimating how expensive cheap labor can be.

      Would one rather pay higher prices to justify a higher wage or higher taxes to provide the services to people and families that are working for low wages?

  4. f/k/a_tmtfairfax Avatar

    Longterm, every worker must deliver value to the employer that exceeds the cost of the employee’s compensation. If not, the employer will find another solution that may or may not include keeping the employee on the payroll.

    This is not to argue that people’s compensation should not be increased over time. That’s a good way to lose good employees and not to be able to attack new ones, especially those who do or will deliver more than the value of their labor.

    1. Nancy Naive Avatar
      Nancy Naive

      Is that a law? Or does worker not apply to C’s (Cxx) and D’s (BoD)?

      1. f/k/a_tmtfairfax Avatar

        A law of economics.

  5. Nancy Naive Avatar
    Nancy Naive

    The Feds do… sort of. The problem is they’re so constantly fiddling with the brackets the indexing is virtually meaningless.

    Personally, I’d like them to map income to the tax due with a continuously increasing top bracket. Oh, and close loopholes.

    1. Randy Huffman Avatar
      Randy Huffman

      Some, but not all, taxes were simplified in the Trump 2017 tax changes. Standard deduction went way up; State Local taxes limited; and Miscellaneous Itemized Deductions eliminated, to name 3. That fact doesn’t seem to impress most Democrats in high tax states.

      1. Nancy Naive Avatar
        Nancy Naive

        Well, because in 2026, most of it goes back.

        As for SALT deduction limits, well, it costs a lot of money to haul trash to a landfill in NJ as opposed to loading up the pickup and dumping it in a ravine in TN.

        The one thing they changed that will hurt the “next generation” was the change in inherited IRAs. Our children must empty them in 10 years, as opposed to age by age 85, meaning Uncle Sugar will take a bigger tax bite faster. This will hurt Leona’s Little People.

        1. Randy Huffman Avatar
          Randy Huffman

          Are you suggesting NJ is cleaner than TN? Yes, there are people in rural areas that dump trash which shouldn’t, they are also typically your low income people (in urban areas they just dump it in someone else’s dumpster). But at least one ranker put NJ as the dirtiest state for pollution:

          1. LarrytheG Avatar

            New Jersey sends their trash to mega-landfills in Va…..

          2. Nancy Naive Avatar
            Nancy Naive

            It was humor. NJ has a lot that looks like TN too.

            BTW, as for “tax reform”, they did do that. They “reformed” the 1040 by adding 5 more Schedules. My wish list on “reform” would have been move Medical Deductions to a form that includes the Adv Premium and dovetail the two better. As an eldery person, I’m looking towards medical deductions. Now they have to be big to outsize the Standard Deduction. Yeah, yeah, I know. Without any medical deductions, I make out like a bandit with the standard deduction.

            I have made all the mistakes in retirement investing, e.g., avoid foreign investment, REITs and Partnerships in your tax deferred accounts. Foreign Tax Credits, oyvez! Avoid form 1116 at all costs!

          3. Eric the half a troll Avatar
            Eric the half a troll

            They aren’t counting acid mine drainage…

        2. Randy Huffman Avatar
          Randy Huffman

          You are right, but the new President and Congress can certainly change things. On IRA’s. ten years is still a pretty long period to average them out. Before the taxpayer passes and the IRA goes to children, the tax payer could be managing it down by paying taxes him/herself (they were the ones after all to get the original deferrals, AND they may not be in a high tax bracket), or donating it. Many people pay little or no income taxes, so this is only an issue for higher income tax payers.

          1. LarrytheG Avatar

            Many tax advantages from the Govt from tax deferrals on IRAs to stepped up basis on inherited investments, to lower taxes on capital gains, etc.

            Most of the benefit folks who are not poor.

          2. Randy Huffman Avatar
            Randy Huffman

            Step up’s in assets certainly benefit those with assets, but don’t forget that for the wealthy estate taxes kick in which are substantially punitive. Tax rate is 40% of the estate (after costs and any charitable gifts), not just on what is passed on.

          3. LarrytheG Avatar

            how much do they exempt before the estate tax kicks in?

            13 million or so?

            have you seen this:


            If we did not exempt FICA taxes, we could 100% fund social security without any other changes.

          4. Randy Huffman Avatar
            Randy Huffman

            FICA wasn’t supposed to be a tax, it was supposed to be a forced retirement plan. Benefits are capped.

            Yes the exemption is $12 Million or so (per person), and will scale back to $6 Million in 2026 without a tax law change (both indexed for inflation so changes).

          5. LarrytheG Avatar

            It was supposed to provide for people’s retirements instead of the govt having to provide entitlements to the aged poor.

            And it’s way more than a “retirement” plan. It has disability and survivor benefits also.

            And it actually works and what we have chosen to do in terms of funding it is to exempt funding that would have come from some income earned so that , that income loss would be used to subsidize employer-provided health insurance.

            Also wanted to get back to you on deficits and spending and show that the deficits outside the pandemic years has not changed that much and again that if we stopped subsidizing employer-provided health insurance, stepped-up capital gains and other “entitlements”, we’d wipe out the deficit.

            We’re paying for these taxpayer subsidies, in effect, by borrowing money.

            We want these subsidies but we say we don’t want the deficits. We need to match our words with action if we are serious IMO.

            When we talk about “cuts” these subsidies ought to be as fair game as any other IMO.

            look at this chart at the non-pandemic years:



          6. Randy Huffman Avatar
            Randy Huffman

            Capital gains and dividends are not subsidy or corporate welfare, these profits are taxed by the corporation, so subject to double taxation. Having lower rates evens it out. You can argue what the rate should be, but not that it is unfair to have a lower rate. Pure economics and fairness.

            As for deficits, you need to go way back to see the trends, we have argued about it before so I’m not going to get back into it.

          7. Eric the half a troll Avatar
            Eric the half a troll

            “Capital gains and dividends are not subsidy or corporate welfare, these profits are taxed by the corporation, so subject to double taxation”

            For dividends, that argument may be valid. Capital gains realized by the investor are set by the market and are not a part of the underlying company’s financial statements.

          8. Randy Huffman Avatar
            Randy Huffman

            Disagree. Some corporate earnings are paid out in dividends, but the majority are re-invested for growth, or could stay in to pay off debt or enhance working capital. Re-investment of earnings drives up the value of stocks in the market; without earnings (or earnings potential), stock prices go nowhere. Also for a Private C Corporation (which I used to work for), the only time the market comes into play is when the company is sold. The book value of the company is driven directly by earnings growth.

          9. Eric the half a troll Avatar
            Eric the half a troll

            “…without earnings (or earnings potential), stock prices go nowhere”

            While stock price can (and often do) move even when earnings are flat, you got it right on earnings potential. The dot com boom proved that. Certainly taxes have not been paid by the corporations on hypothetical future earnings (which is one important factor that impacts current stock prices). No double taxation is happening when it comes to investor capital gains.

            Even with private companies, the stock value is typically calculated based on projections of how much income it could generate in the future.

            To follow your logic, if I invest $1000 in a machine with money I have paid taxes on and with that machine I manufacture $2000 worth of tables, I should not have to pay taxes on that $2000 those are my earnings generated because of my investment. Also, don’t forget that I can deduct the original $1000 from my income as a business expense.

          10. Randy Huffman Avatar
            Randy Huffman

            Again, your focusing on large public corporations, they are just one (albeit large) subset of the universe. What you are saying applies mostly to Growth stocks, and those earnings forecasts are net of expected taxes, so its a timing difference. Having said that I do agree that a portion (but not all) of the growth of these large stock prices do not realize actual tax payments.

            But again there are many much smaller corporations and private corporations where the double taxation is a huge consideration, and that is the world I lived in for a long time.

          11. Eric the half a troll Avatar
            Eric the half a troll

            See my edits above. Private firm stock prices are also calculated based on future earnings potential.

          12. Randy Huffman Avatar
            Randy Huffman

            Private company stock don’t trade in a market until such time there is a transaction like a sale, going public, etc. Many businesses run for years without such a transaction.

            Your point above only uses an investment in the machine. You need to factor in labor (even owners pay themselves a salary), materials for the tables, administration/overhead, then get to a pretax profit, then the owner needs to pay TAXES to establish net profit. The machine gets depreciated over a number of years, not expensed up front (unless there is bonus depreciation for taxes, which is a timing difference, a whole different discussion) .

          13. LarrytheG Avatar

            some why are some dividends “qualified” and others not?

            Also, take a look at QBI on the 1040 line 13.


            It shows up on many tax returns of folks who are not in business but have investments.

          14. Randy Huffman Avatar
            Randy Huffman

            I know very little about QBI, it’s intended to be a deduction for those investing in domestic businesses, not a C Corporation, and has income limits. Essentially to incentivize US small business investment. I’ve never dealt with it and it’s complicated as crap. You and I disagree on a lot but I would agree this is one of those tax deductions our politicians came up with to incentivize a narrow segment of business we would scratch our heads on.

            Alot of investment’s we make that we would think of as paying interest, such as money market funds, gets reflected in the tax code as dividends, but since they are not equity investments it gets shown as non qualified dividends. Qualified dividends are from C Corporation stocks so available for the lower tax rates. So non qualified dividends is properly taxed the same as interest, I have no idea why the IRS doesn’t just have it called interest to make it simpler to follow.

          15. LarrytheG Avatar

            I do volunteer taxes and while we have to be certified in a lot of different areas and are limited in”scope” to others, QBI is essentially a black box in the software and we don’t mess with it at all but I notice that it appears in the tax returns of ordinary, modest income taxpayers who have some simple investments. For dividends, they can be nonqualified and qualified and are taxed at different rates but beyond that I have little knowledge other than to plug the numbers into the right boxes! If you try to do taxes by hand, and try to use standard tax tables you can get messed up on this (as well as a variety of other areas where the tax treatment differs especially in areas that involve IRAs both on the front and back). I am very clueless about the corporate investment/tax subjects you and Eric were discussing.

          16. Randy Huffman Avatar
            Randy Huffman

            Just think of qualified dividends as coming from stocks, which is why they are afforded lower rates, and non qualified dividends as fixed income interest. That’s how I think of it. There could be special rules for certain types of investments but that’s not going to be relevant for the vast majority of taxpayers

          17. LarrytheG Avatar

            yep.. understand the concept but huge difference between passive investors and active ones in terms of investment strategies relative to holding time. Passive investors get what they get on their 1099B’s they receive and just fill in and file. A lot more going on with hands-on folk I suspect. Many passive investors also, at least initially, don’t understand the tax consequences of investments that don’t normally withhold taxes and they become “due” at tax time!

          18. LarrytheG Avatar

            re: double taxation.. you could argue that about a wide variety of things, right?

            The question is WHY …SOME are taxed at one rate and others at another rate…right?

            re: deficits –

            You need to look at the Trump tax cuts also.

            They bring in more revenue than before but they do not bring in more taxes so they do not pay for themselves.

            But the bigger point with deficit is – are you collecting enough tax to pay for what services/benefits.

            If you cut taxes like the Trump tax cuts did, and they don’t generate enough revenues to pay for services that were paid for before the cuts….

            Finally, tax expenditures are subsidies in reality.

            For instance, what justifies not paying income taxes wages used to pay for health insurance when others who don’t have employer-provided have to pay taxes on the money they spend for health insurance.

            what justifies the disparate treatment?

          19. Nancy Naive Avatar
            Nancy Naive

            $12M per taxpayer, $24M for a martial estate. When the first dies, the estate should fill out a fed form to “claim the dead spouse exemption “.

            FWIW, 99.1% of estates pass wholly untaxed.

            In 2026 the exemption halves and then 98.9% will pass untaxed.

          20. f/k/a_tmtfairfax Avatar

            If the feds truly wanted to cap wealth, the estate tax would apply the same exemption amount to bequests to charitable and private foundations. Buffett can leave $13 M to the Gates Foundation tax free but the rest is taxable just like it would be if he left it to his heirs.

          21. LarrytheG Avatar

            Is the “goal” to “cap wealth”? The govt/IRS let’s you donate to charity what you would owe in taxes, right?
            I think it IS capped… isn’t it? ” For tax years 2023 and 2024, the limit on charitable cash contributions is 60% of the taxpayer’s adjusted gross income. ”,Charitable%20contributions%20must%20be%20claimed%20as%20itemized%20deductions%20on%20Schedule,on%20annual%20rules%20and%20guidelines.

          22. f/k/a_tmtfairfax Avatar

            Larry, I’m talking about the federal estate tax and not the federal income tax. Today, a billionaire can leave hundreds of millions of dollars to a private foundation that can, in turn, spend millions trying to influence public policy and opinion. This is all tax free. Why

          23. LarrytheG Avatar

            TMT – don’t you report your inherited estate on your income tax as well as charitable deductions? Why do we allow charitable donations to orgs that influence public policy? I’m not happy with it either especially the
            “donor-advised” funds that don’t have to report who was the donor. The original bargain was that people
            could donate but we’d know who donated to what orgs… now it’s “dark”.

          24. f/k/a_tmtfairfax Avatar

            No, one doesn’t report your inheritance on federal income tax. Future earnings on the inheritance, if any, are taxable, of course.

            My point remains that, if we are concerned by large concentrated sums of wealth and the power that goes with them, why do we allow private foundations that engage in public policy to be free from taxes? Estate and income?

            If a foundation or charity pays for dental care for poor people, let it be tax free. But if it wants to advocate for changes in health care, tax it.

          25. LarrytheG Avatar

            so how does the 11 million exemption “work” if not done on taxes? Your second question relates to tax policy and how it can be used to incentivize personal spending, right? Folks argue that citizens participate in things like health care policy decisions by giving to organizations that advocate for them. Corporations participate the same way by hiring lobbyists to advocate for their interests. You’d want a level playing field for both sides to be able to participate, no?

          26. Nancy Naive Avatar
            Nancy Naive

            This is exactly correct. We of an age, made tax-deferred contributions to IRAs or 40X(Y) plans, or our employer did through plans such as profit sharing, that then grew tax deferred. Starting at various age points, 71.5, 72, 73, and soon to be 75, we are required to take distributions based on living to something bizarre like 120. For the vast majority, this means RMDs of a few 10s of 1000s even with “mean high balances”. In 2020, Congress reduced the lifetime RMDs of inherited from life expectancy of 85 to 10 years.

            This means that the best course of action is for the owner to “play his tax brackets” taking his RMD plus a conversion in an effort to pay less now so Junior isn’t slapped int the +32% tax brackets. It is what it is. I’m just glad I caught it.

            I have since counseled my daughter to put her retirement contributions into taxable accounts. A single taxpayer is going to get as much as $40K of dividends and LT gains at 0% tax. You’d have to have ~$400K in investments to achieve that. The “plus” is “no strings attached”, i.e., penalties for early withdrawal. Once she begins paying any tax on the QDLTCG, then invest in the Roth vehicles.

          27. Randy Huffman Avatar
            Randy Huffman

            at my strong suggestion, my sons make Roth contributions while they can (meaning you can’t after income hits something like $140k)

          28. Nancy Naive Avatar
            Nancy Naive

            Are you kids available for Roth 401(k)? The IRA limit is $153K and $160+ next year. It moves up. When my daughter was young, 18, I had her investing in TRADs to get the deduction, then when she had an employer plan with a match, move to that, extra to a brokerage.

            It’ll be a cold day before she reaches the Roth limit. She makes a nice income but…

            Good on your kid for the income. Good on ‘em for saving. Between $90K and the $153 the Roth is a good option.

          29. Randy Huffman Avatar
            Randy Huffman

            I don’t know exactly what my sons get in their jobs, I try not to pry too much, but emphasized the importance of starting retirement saving several years ago, and they responded positively. I know two are well below the Roth IRA limit (I did their taxes until a couple years ago, one got married and the other moved to Boston), not sure about the third (good for him!).

          30. Nancy Naive Avatar
            Nancy Naive

            Sounds like you done it good, Dad. Don’t laugh, but telling them to watch Suzy Orman isn’t a bad thing.

            I have the one. I remain linked via a joint savings account. She opened it and added me when she had a medical problem in college and there were none, zero, zip doctors in our company health insurance network within 100 miles of her. She keeps adding to it and I can see it. She has her 6 month emergency cash and some. Her company retirement plan is a golden goose. She puts 5% of her income in, and the company puts in 9.5%! 9.5%. She fully vested last year.

          31. LarrytheG Avatar

            Here’s a question. Why does the govt limit ROTH IRA contributions? Why can’t someone put as much as they want/can into a Roth IRA?

          32. Randy Huffman Avatar
            Randy Huffman

            There are income limits where you cannot contribute if income exceeds a certain amount, and also caps on how much you can contribute. Both are to ensure high income people either cannot participate or if your below the caps but still well to do, don’t put too much, as then all future growth is tax free as long as you follow the rules on when you take it out, etc.

            There are more than a few tax incentives out there that have income limits so higher income people can’t take the deduction

          33. LarrytheG Avatar

            Yes, understand the limits but what is the logic behind them? If there is no deferral of taxes (like
            with TArad IRA) and you pay the full tax as income, then why is there a limit … say, any more or
            less than there would be a limit on how much you could invest your post-tax money in other instruments?

          34. Randy Huffman Avatar
            Randy Huffman

            Because in a Roth IRA you never pay taxes on the earnings-appreciation. So if you put in $100,000 over a 15 year period and then when you retire its worth $300,000, you can pull out the $300,000 (usually over time to live on) tax free. If no limits, a high income taxpayer could put in say $1Million and get to appreciate it to $3 Million, and pay no taxes on it.

          35. LarrytheG Avatar

            yes…. so the govt is providing a “break” on taxes but “limited”. They could means-test it so that lower income might have higher limits to set aside for their retirement (as opposed to building wealth).

          36. Randy Huffman Avatar
            Randy Huffman

            I believe they already do by phasing out the ability to add to a Roth after income hits a certain level.

          37. LarrytheG Avatar

            on the budget and spending… can we talk about it?

          38. Randy Huffman Avatar
            Randy Huffman

            I have to say I am done with that, I think we established a long time ago we had irreconcilable differences.

          39. LarrytheG Avatar

            We likely do but not sure I ever understood where you and others think cuts should be
            made to get to a balance but if you’re done talking about it, I should stop asking.

          40. Randy Huffman Avatar
            Randy Huffman

            I’ve been worn out on this topic because everyone knows we have had a spending problem for decades, so you can’t look at a budget from a year or two ago, you gotta go back much further. Nobody is dealing with this , instead Biden opens up the border, exponentially increases spending and lies about it. So I’m not going to pull out a budget from a year or two ago, instead go back ten or more years and justify all the increases that took place since then, and how to pay for it. We have a real mess.

          41. LarrytheG Avatar

            Reasonable data below: ? (from BARD query)

            the question I asked BARD was :

            ” so can you show the US budget deficits for the last 15 years and provide the source of your data?”

            Bards Answer:

            “You can explore an interactive bar chart of the past 15 years of US budget deficits (2009-2023) on the Congressional Budget Office (CBO) website:

            Navigate to “Historical Tables” > “Table 1.1: Federal Government Summary (Fiscal Years)” and select the years of interest (2009-2023). You can further customize the visualization by changing the data displayed and chart format.”

            Here’s a static bar chart showing the US budget deficits for the past 15 years (2009-2023):

            Year | Deficit ($ billions)
            2009 | 1,452
            2010 | 1,270
            2011 | 1,082
            2012 | 1,090
            2013 | 879
            2014 | 514
            2015 | 439
            2016 | 587
            2017 | 665
            2018 | 984
            2019 | 1,190
            2020 | 3,057
            2021 | 2,771
            2022 | 1,200 (estimated)
            2023 | 0.91 (projected as of October 2023)
            Source of data:

            The data for the static chart above is drawn from the following sources:

            Congressional Budget Office (CBO): Table 1.1: Federal Government Summary (Fiscal Years)
            Office of Management and Budget (OMB): Historical Tables

          42. Randy Huffman Avatar
            Randy Huffman

            You need to look at revenues and outlays.

            We had a Republican Congress during the later years of Obama. Trump did not cut spending as much as I would have liked (part of it was he was rebuilding defense). So I still I don’t understand from that standpoint why he is loved by so many. Having said that, he did much better controlling spending then Obama or Biden (see the difference when Obama came in office, part of it was the recession but after it was over, it never went down!). This is explosive growth in spending, I realize some of that growth 2022 forward is interest (and we could dig to find but I don’t have time) but that is the issue with so much debt. Look at Revenue, it grew even after the tax cuts! And guess what, Biden ahs kept most of the tax cuts in place, and the economy benefited.

            So where do we cut spending? Everywhere!


            Year Receipts Outlays Surplus or Deficit (-)

            2004 1,880,114 2,292,841 -412,727
            2005 2,153,611 2,471,957 -318,346
            2006 2,406,869 2,655,050 -248,181
            2007 2,567,985 2,728,686 -160,701
            2008 2,523,991 2,982,544 -458,553
            2009 2,104,989 3,517,677 -1,412,688
            2010 2,162,706 3,457,079 -1,294,373
            2011 2,303,466 3,603,065 -1,299,599
            2012 2,449,990 3,526,563 -1,076,573
            2013 2,775,106 3,454,881 -679,775
            2014 3,021,491 3,506,284 -484,793
            2015 3,249,890 3,691,850 -441,960
            2016 3,267,965 3,852,615 -584,650
            2017 3,316,184 3,981,634 -665,450
            2018 3,329,907 4,109,047 -779,140
            2019 3,463,364 4,446,960 -983,596
            2020 3,421,164 6,553,621 -3,132,457
            2021 4,047,111 6,822,470 -2,775,359
            2022 4,897,399 6,273,324 -1,375,925
            2023 estimate 4,802,483 6,371,827 -1,569,344
            2024 estimate 5,036,384 6,882,738 -1,846,354
            2025 estimate 5,419,473 7,090,942 -1,671,469
            2026 estimate 5,772,622 7,293,572 -1,520,950
            2027 estimate 6,080,462 7,589,373 -1,508,911
            2028 estimate 6,399,527 8,003,139 -1,603,612

          43. Randy Huffman Avatar
            Randy Huffman

            Thanks Larry, I’m going to end here as gotta move on, but good discussion and info sharing.

          44. LarrytheG Avatar

            Thanks, Randy

          45. LarrytheG Avatar

            right… but allowing larger contributions for lower income…than higher income….

          46. Stephen Haner Avatar
            Stephen Haner

            Such nice problems to have. Larry is right about who cares. 🙂

          47. Nancy Naive Avatar
            Nancy Naive

            I care. I’m really big against bait&switch. I expected to get screwed on the Roth, but they blindsided me on the Trad.

          48. f/k/a_tmtfairfax Avatar

            My wife worked with our son to put his money in a Roth IRA. More young people are doing just as you advise.

          49. Nancy Naive Avatar
            Nancy Naive

            I wonder the psychology of deferred gratification v. FOMO?

        3. LarrytheG Avatar

          Well… Uncle Sugar allowed untaxed money to go into the IRA at the start, right?

          And stepped up basis on inherited investments?

          If these (and other) tax expenditures went away, it would cover the deficit.

          So… do we want to not have a deficit – hands up if you agree!

          1. Nancy Naive Avatar
            Nancy Naive

            Well, if you were putting it away with a 24% tax deduction, but your kid has to pay 32%… ya see the problem?

            Have they? Have they removed the step gain? I didn’t think that passed.

          2. LarrytheG Avatar

            stepped up still in force.

            How is kid paying 32%… I’m dense sometimes.

          3. Randy Huffman Avatar
            Randy Huffman

            Nope, your never going to deal with the deficit with more taxes (plus Dem’s will write in loopholes for all their buddies, just watch). Sure that can dent it, you gotta cut spending, or as some people suggest, at least cap spending. But we have had that argument before

          4. LarrytheG Avatar

            the vast majority of the spending is military and health care. It’s a no go except for the political theater.

            Tell people you’re gonna cut their Medicare or make their employer-provided contributions taxable.

            Look at the budget. the cuts are not there unless we cut military and medical.

            guns and butter!

          5. Randy Huffman Avatar
            Randy Huffman

            Defense is a huge number, not going to suggest otherwise. But the country (by voting in politicians who increased spending) chose butter. See the trends. I just grabbed this quickly, but have been aware of the trends for years.


          6. LarrytheG Avatar

            well, it sorta looks like this:


            social security is funded from FICA, no general revenues so look at the rest of the pie chart for cuts.

            Most are not going to agree to cut military nor health care.

            That leaves you in those small pie cuts.

            I’d argue that the tax subsidies/tax expenditures are fair game.

            If we’re gonna cut, all of us are gonna get our share of it.

            not some other guy.

  6. Lefty665 Avatar

    That’s the ticket, adjust deductions, tax rates and brackets every year. That’s what’s recommended by the Programmers and Accountants Full Employment Act. We’ve been indexing our hourly billing rates for inflation plus for years so we’re tanned, rested and ready! Bring those annual tax code changes on, our boat payments have been going up too.

    1. Super Brain Avatar
      Super Brain

      The 86 tax act indexed brackets, exemptions, and standard deductions. Other parts of the IRC have hard wired amounts and could use a refresh.
      The 2017 act cut rates but raised the tax base.
      Many people pay more in local PP and RE tax than income tax. Index those and stop raising the base.

      1. Nancy Naive Avatar
        Nancy Naive

        Change RE tax from a tax on paper wealth to a flat tax and a gains tax.

        PPT — what a sad idea. Cars, boats and RVs depreciate. Tax goes down. Boat and RV owners vote with their wheels. “If I move the RV to a storage lot in the next tax entity over, I save a ton in PPT.”

        1. Lefty665 Avatar

          Y’all missed my point which was to bring on the tax changes. It doesn’t matter what they are, just that they’re changes.

          Each and every change generates billable hours for those of us in the programming and accounting fields. We could tithe to the GA and still be money in the bank ahead if they index taxes to inflation.

          The week between Christmas and New Years I updated FIT withholding tables for 2024. Every one of my customers had to have them. They are billed either hourly or as part of annual maintenance agreements. Either way the customer pays. If Virginia indexes state FIT or other taxes annually the billable hours will occur every year. I think it’s a great idea:)

          1. Nancy Naive Avatar
            Nancy Naive

            That sounds suspiciously progressive. Conservatism is “no changes, it’s okay the way TJ did it.”

            I do my taxes in ExCel. Updated my tax brackets and rates in December.

          2. Lefty665 Avatar

            I haven’t had to touch Virginia tax tables for several decades so that’s conservative? That includes the Warner, Kaine, McAwful and Northam years and likely Wilder. Baliles may be the last time they changed, or maybe Robb.

            It ain’t rocket science, but it’s a little more work when you do them for all incomes and tax statuses. IRS Pub 15 is my friend.

          3. Nancy Naive Avatar
            Nancy Naive

            Don’t know about that 15, or the IRS, but I agree that “Pub is our friend.”

  7. James Wyatt Whitehead Avatar
    James Wyatt Whitehead

    The business owner is going to do this. Squeeze the 15 buck an hour guy for two employee’s worth of labor and not bother hiring additional help. Already happening in areas of the labor market where help cannot be found.

    1. LarrytheG Avatar

      which makes that employee valuable enough, you not only cannot do without him/her, but the one that does the work , is harder to find a replacement as not everyone at that pay rate is a winner in productivity and efficiency.

      1. Nancy Naive Avatar
        Nancy Naive

        Plus, squeeze them hard enough, and he will unionize.

      2. Nancy Naive Avatar
        Nancy Naive

        Plus, squeeze them hard enough, and he will unionize.

        1. James Wyatt Whitehead Avatar
          James Wyatt Whitehead

          So the union bosses can drive bigger Cadillacs.

  8. Randy Huffman Avatar
    Randy Huffman

    Good suggestion. Am I correct that Youngkin could formally offer amendments. For example, agree to increase the minimum wage but nix inflation adjustments?

    1. Stephen Haner Avatar
      Stephen Haner

      Yes, he could offer that amendment.

  9. LarrytheG Avatar

    Nothing that does not have super-majority support will clear a Youngkin veto.

    Some of it is to force the GOP to take votes that then will be used
    in the next elections.

    But Youngkin actually does have an opportunity to make changes – but it will require some compromises and horse trading if he has got someone on his team who can work that way.

    I note also that Federal std deductions ARE index and adjusted annually.

  10. walter smith Avatar
    walter smith

    One would hope that with a governor who actually was quite successful in the real world, he could articulate beyond stupid talking points why the real minimum wage is zero.
    No politician should be able to vote for such a bill unless and until he has had his own payroll, tracked hours, issued weekly, bi-weekly, semi-monthly checks, and made sure to deposit all the withheld taxes appropriately. I doubt they have any idea how difficult that is, besides setting wages artificially higher than need be.
    But, if we are going to engage in this stupidity, why not $500 per hour? Won’t that make everyone rich? Why stop at $15?
    GY failed to articulate that the baby-killers advocated killing babies and thought being silent was the way to go. He was wrong. Instead of cowering in fear, man up and tell the world why this Commie idea is a bad idea and won’t actually help the people the Commies say they care about.

  11. Nancy Naive Avatar
    Nancy Naive

    Michael Mann’s Defamation Lawsuit Finally Goes To Trial

    1. Stephen Haner Avatar
      Stephen Haner

      Once a UVa Prof. Nothing else to say.

      1. Nancy Naive Avatar
        Nancy Naive

        The jury/judge will do that.

        I’m sure no one here accused him of falsifying data.

  12. Nancy Naive Avatar
    Nancy Naive

    When I graduated high school, a college education was the best mechanism for upward mobility, minimum wage was $1.45, and an apartment cost $150/month.

    Working a part time job year around, and a full time job from May to September with two skipped semesters to add to the accounts, it was possible to attend a State four-year college and graduate debt free ($100 in a checking account, and $40 on the credit card that the banks gave any senior for the asking).

    Run that that through your inflation calculator.

  13. Eric the half a troll Avatar
    Eric the half a troll

    “The days when some business-savvy Virginia Democrats might express concerns that rising wage rates will depress job creation are long gone. That critter is extinct.”

    Many things die when exposed to sunlight… this is but one more example…

  14. Nancy Naive Avatar
    Nancy Naive

    Mar-Jac Poulty — When it comes to minimum wage employees, we don’t mince words.

    Upton Sinclair is not surprised.

  15. Nancy Naive Avatar
    Nancy Naive

    When I graduated high school, a college education was the best mechanism for upward mobility, minimum wage was $1.45, and an apartment cost $150/month.

    Working a part time job year around, and a full time job from May to September with two skipped semesters to add to the accounts, it was possible to attend a State four-year college and graduate debt free ($100 in a checking account, and $40 on the credit card that the banks gave any senior for the asking).

    Run that that through your inflation calculator.

    1. LarrytheG Avatar

      More than a few did this and the idea was to get 4 yrs of college without debt.

      IOW, it was pay as you go. Mom & DAD very much encouraged that idea.

      1. Nancy Naive Avatar
        Nancy Naive

        My parents could only dream of a college education, but then their generation had other paths to a blue collar defined pension retirement and the advent of the social networks just as need. Theirs was the end of the Industrial Age.

        Our generation had affordable paths to the new white collar jobs and we rode into the Information Age. We were more on our own. Defined pension plans were waning (subject to corporate raiding) and we banked on deferred compensation.

        Our children’s path started with debt.

        1. LarrytheG Avatar

          but you can STILL work your way through school, no?

          1. Nancy Naive Avatar
            Nancy Naive

            Not as easily.

          2. LarrytheG Avatar

            right, but – times change and one has to evolve and adapt or should with help from parents. The first
            option should not be to go into debt on the front end and by the back end – be so deeply in debt that
            one cannot buy a house or build wealth.

            I know one guy that told his kids that they would not be able to help them much financially and
            they needed to get top grades so they could get a merit scholarship from some colleges and only’
            those colleges that offered the merit scholarship would be considered. His son went to UVA,
            debt-free. I see this as a certain level of personal responsibility instead of relying on the govt
            and/or blaming the govt … make your own way in the world as much as you gain IOW and
            if you actually end up needing/using help from the govt, don’t grow up to be a conservative blaming
            the govt and forgetting that it did help you… and that govt assistance is not an inherently evil thing!

        2. Lefty665 Avatar

          My family was lucky. My parents were both college educated. Dad was admittedly unusual, he was an EE shortly before WWII and had an amazing career. Mom said her generation was the first one with fairly widespread college.

          Certainly with us boomers college was ubiquitous. Some of us early boomers had to scramble to get on board with the information age. I was in my early 30s when I jumped into the deep end of the technology pool. It has been a good ride and I have not regretted it for a minute. Yes, it was indeed distressing when defined benefit retirement plans bit the dust.

          My kids got through school without debt, they were there before college costs exploded. When they were at VCU about $10k apiece a year covered it all, tuition, books, rent and food. Higher interest EE savings bonds came around at the right time to make saving for their education easier.

          We’re now building 529 plans for grand kids so hopefully they will have educational opportunities without too much debt. It is wonderful to be able to pay some of it forward too.

          I can see 4 generations in my family with educations, and a 5th before that includes a DDiv, a RN, a school teacher and an electrician. We’ve been fortunate indeed, also with a smattering of brains and industrious. For some of us it has been a land of opportunity for generations.

  16. Eric the half a troll Avatar
    Eric the half a troll

    “Even with the recent increases in the standard deduction (which are not permanent, you must remember, but expire after 2025)…”

    I pointed that out back when you were pushing for permanent tax cuts in Virginia in response to Trump’s cuts and you swore they would be extended permanently. Changing your tune now, are we?

    1. Nancy Naive Avatar
      Nancy Naive

      Careful, you mixed preferred pronouns in that last sentence.

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