9 ms·
A Year After the Middle Class Tax Cut, the Rich Are Winning
- HillaryBriss 8y ago> ... the rich are winning sort of like saying "the winners are winning." the rich are pretty much always winning.
- qntty 8y agoNot true, there are programs that transfer wealth from the rich to the poor, e.g. social security.
- dragonwriter 8y agoSocial security (well, the old-age and survivors portion; disability insurance is a little different) transfers wealth from the young to the old, not the rich to the poor.
- geggam 8y agoSocial Security is something you pay into. The fact politicans raid the social security fund and bleed it dry shifting the burden to the young isnt the design Social Security is not wealth transferred young to old. Its wealth stored in govt care and because the govt is irresponsible the youth has to be taxed to make up the difference
- AnthonyMouse 8y agoSocial Security started out as an inter-generational wealth transfer and it still is. The original beneficiaries received benefits without paying in and everybody since then has been paying for their parents. The only reason the "trust fund" has anything in it at all is the population expansion of the baby boom, which is drawing itself down as they retire. And there was never any money to begin with -- it's all government paper. The government collected social security tax, lent the money to itself and immediately spent it. Now it owes itself money. "But it's the social security administration's money" doesn't change anything about where it ultimately comes from -- present day taxpayers.
- muzz 8y agoThe trust fund is over $2.5 Trillion
- AnthonyMouse 8y agoIn treasury bonds. Whether present day taxpayers pay the money from withholding taxes to cover the bonds or social security taxes directly, it still comes from present day taxpayers. And even that $2.5T is substantially less than the amount they are projected to pay out.
- muzz 8y agoWhere else would you suggest the surplus be invested? Do you think there is a safer investment vehicle on the planet?
- AnthonyMouse 8y agoIt isn't a matter of investing it in something else. There was never actually any surplus to begin with. If the government had done anything other than lend it to itself, they wouldn't have had that money to fund the programs they voted for. Then they would either have had to pay the full amount from additional taxes or borrow the money and pay interest, which over that time period was a >6% rate and would have been even higher if that amount of debt had actually been issued into the bond market. I leave it as an exercise to the reader to calculate what percentage of the "trust fund" total would have had to be paid in interest at those rates over half a century if they had actually paid it. Spoiler alert, it's most of the total. The net inter-generational transfer is actually substantially more than that, because the true measure of the inter-generational transfer is the debt itself, which exceeds even what's held by social security and medicare. That is what they spent without paying for and what their kids inherit. If they hadn't spent more than they paid there wouldn't be trillions in US government bonds for the "trust fund" to hold. That's the only way to have actually paid for it -- have held a net surplus of that amount, so you pass on net assets rather than net debt. And that isn't what happened.
- deleted 8y ago[deleted]
- justinzollars 8y agoSorry people are downvoting you. I really hate this feature - I just want you to know I appreciate your comment and if I were in charge I'd kill this feature.
- HillaryBriss 8y agothank you kindly. i'm not a fan of HN down voting either. i try not to do it at all. (i think my total number of down votes can be counted on one hand.)
- ams6110 8y agoWith any tax cut, the rich will benefit the most because they pay most of the taxes.
- disishhsha 8y agoThat doesn’t have to be true. Examples: 1) A credit of $1,000 per taxpayer. 2) Increase the standard deduction by $1,000. And countless others. Tax cuts benefit the rich by design, not due to some natural law.
- deleted 8y ago[deleted]
- copenja 8y agoOver 40 percent of Americans don't pay ANY Federal income tax. So, by natural law, doesn't any tax cut not benefit them? This includes most of the countries poorest citizens.
- theplague42 8y agoDefine "tax cut". A tax credit would benefit those who already pay 0.
- walshemj 8y agoIts also a tax subsidy for low wage employers - I am fairly left wing by HN standards but I am not keen on my taxes subsidising starbucks baristas.
- AnthonyMouse 8y agoAll benefits for lower income people are subsidies for low wage employers. A tax credit has the benefit of being particularly efficient and with a minimum of bureaucracy, as compared with the typical highly distorting programs like housing or mortgage interest subsides, federally-backed student loans or health insurance subsidies that inflate rents and housing/education/healthcare costs.
- ItsOk4Be 8y agoBad orange man creates infinite outrage clickbait. Just oppose everything he does. Wants to pull out of Syria? WTF I love war now.
- robertAngst 8y ago>The tax law limits or eliminates dozens of itemized deductions, including for SALT, mortgage interest, home office expenses and fund management fees. Wait, they got rid of mortgage interest? Since the internet told me to see a CPA, I did. And I was not happy at how limited his knowledge base was. I corrected him a few times during our meeting. We had a conversation about Mortgage Interest and this never came up. Isnt the point of the certification to be the expert? I'm just a math guy that can read.
- hkmurakami 8y ago$1M --> $500k mortgage principal for the deduction was the change. Also, get a personal referral for a CPA.
- bdhess 8y ago$500k was one of the drafts; the final amount is $750k.
- robertAngst 8y agoIt was a personal referral :O
- zdragnar 8y agoFor primary residencies, you can now only deduct interest on up to $750,000 in debt (i.e. your mortgage principle) rather than the $1,000,000 if you had bought your home before 2018. In short, most people won't be affected, unless you own a mansion or a home in an overpriced market such as SF or NYC. Keep in mind that the standard deduction also doubled, so depending on your own situation, you may not even need to itemize your deductions, such as your mortgage interest.
- robertAngst 8y agoThank you! (also makes the article less valid IMO for being sensationalist)
- icsllaf 8y ago
- kurthr 8y agoIs it really a "middle-class tax cut" when, "one in 20 families face a higher tax burden this year... [but] 7.3 percent of middle-income groups." That means that the middle class have a 146% chance of having a tax increase relative to the median. Of course you could claim that the upper middle class got more $ cut than the lower middle class or some such thing.