Posted on 08/08/2024 8:36:56 PM PDT by SeekAndFind
Possibly very true. Also possibly very true: The US might need to strike actual gold to afford it.
Nevertheless, Donald Trump has emphasized his desire to find new places to cut taxes in order to generate real economic growth. Those ideas are also clearly aimed at finding inroads into traditional Democrat constituencies. A proposal to end taxes on tips has a lot of appeal for low-income servers, who are likely younger voters, and both are key demos for Kamala Harris and other Democrats. It didn't woo the culinary union leaders, but it might appeal to their members.
His latest proposal clearly has the New York Times worried that Trump has found a mark, too. Trump has proposed ending taxes on Social Security payments entirely, a long-sought policy change by AARP and other senior interest groups. And this proposal will be tough to oppose by Harris and Tim Walz -- especially Walz:
First it was a tax cut for hotel and restaurant workers in Nevada, a swing state where Donald J. Trump proposed exempting tips from taxes. Then, in front of powerful chief executives gathered in Washington, Mr. Trump floated cutting the corporate tax rate, helping to ease concerns in the business community about his candidacy.
Now Mr. Trump is calling for an end to taxing Social Security benefits, which could be a boon for retirees, one of the most politically important groups in the United States.
It's such a politically potent idea that it's amazing no one has proposed it until now!
Oh, wait ... As the NYT goes on to explain, it has been proposed before --- by Democrats. And one Democrat in particular managed to get that policy implemented for state income taxes. Wanna guess who? Let's not always see the same hands ...
Still, there is bipartisan support for the concept. Some House Democrats introduced legislation earlier this year that would stop taxing Social Security benefits, while also raising payroll taxes on higher-income Americans to fund the program.
As governor of Minnesota, Tim Walz, whom Vice President Kamala Harris selected as her 2024 running mate, signed legislation that exempted Social Security payments from state taxes for many seniors.
That will make it difficult for Harris or Walz to argue against the proposal. Not that it's necessarily difficult to find such arguments, however, especially regarding fiscal stability. First, as the NYT points out, that would eliminate $1.8 trillion in revenue over the next decade, when the US is running massive annual deficits that keep adding more national debt to an overloaded plate. Trump himself has criticized the Biden administration's rapid expansion of deficits in this campaign.
Second, as former Social Security trustee Charles Blahous wrote yesterday, that lost income will destabilize the fund on which the benefits depend. Trump's proposal would also likely benefit those who need relief least, since the current system already shields low-income seniors to some extent:
Of the 85% of benefits subject to income tax, 50% goes to Social Security and 35% to Medicare Hospital Insurance.
The Committee for a Responsible Federal Budget has calculated that eliminating these would worsen shortfalls for Social Security and Medicare Hospital Insurance by 25% and 170%, respectively. It would make the latter insolvent by 2030, six years earlier than expected. ...
Excluding Social Security benefits from taxation would also be regressive. It would do nothing for the 60% of seniors who already pay no income taxes on their benefits and channel gains to the top 40% by income. Consider, too, that for the past few decades, the median wealth for Americans in their 60s and 70s has grown dramatically, while younger adults’ has lagged behind.
The political appeal of nixing taxes—especially for old people, who have a high propensity to vote—is obvious. Yet doing so would violate the principle of equal taxation for equal income, worsen Social Security and Medicare’s financial woes, and transfer more income to wealthier households. If we care about Social Security and Medicare and those who depend on them, the status quo should prevail.
This could still work -- if it came with a significant restructuring of both Social Security and Medicare. That is already long overdue, but neither party wants to take ownership of any such plan. George W. Bush tried to advance a restructuring plan in 2005 (with Blahous as one of the advisers, IIRC), but Democrats demagogued it so badly that it never went anywhere. When Paul Ryan tried again a few years later, Democrats ran ads depicting him pushing a wheelchair-bound grandma off of a cliff. Trump has refused to even consider reforming either program, let alone both, so this would be simply the kind of revenue cut that Blahous warns about.
That may make it tough to pass in Congress, but it's a lot easier to pass tax cuts than reforms that cost voters benefits and money. And having raised the expectation, seniors and activists will expect Trump to deliver:
Bill Sweeney, the senior vice president for government affairs at AARP, said any changes to Social Security should protect the program’s finances. He added that his group’s members were not shy about their distaste for taxes on Social Security.
That, of course, depends on Trump winning the election. And that's precisely what he wants seniors to understand too when they decide which candidate to support. The NYT understands this as well, which is why they're worried that this tax proposal might have struck gold.
Two wins for the American worker and American retiree. End taxes on tips and End taxes on Social Security checks.
The Committee for a Responsible Federal Budget has calculated that eliminating these would worsen shortfalls for Social Security and Medicare Hospital Insurance by 25% and 170%, respectively. It would make the latter insolvent by 2030, six years earlier than expected. ..
More of this, Mr. Trump. Eliminating taxes on Social Security benefits is something every senior can vividly comprehend and appreciate. Make it a national policy, not just per state, as Walz has done in his own state.
Starting with the top alphabet departments.
I wish Trump would start a movement to make property taxes unconstitutional. With these taxes in effect you are basically a renter, not an owner.
Exactly. Eliminating waste in govt will pay 10 times required amount over 10 years. Entire departments can be eliminatd starting with education.
Stop giving SS Ben is to people who never iPad into the system would save a massive amount...
Funny how the Slimes worries about balancing the budget when it is a Trump proposal. The only time the Federal Debt was zero was way back when Andrew Jackson was President. Milton Friedman made the case that only a Balanced Budget Amendment is ever going to work .
I doubt a big number of retirees pay any taxes on Soc Sec regardless. This would mostly help the higher levels recipients.
For single taxpayers, there are no taxes on Soc Sec up to an income of $25K with only 1/2 of Soc Sec in that $25K calculation. The average Soc Sec check is about $21K, and only half of that is in the calculation.
Which means most people are already not paying taxes on it.
It’s $32K for married. Which would be two checks coming in. $21K each is $42K and only half of that counts so no taxes for them either.
The people this helps is those with other income in retirement than Soc Sec. They are going to blast through the $25K threshold. This will end them paying taxes, but as retirees go . . . they are “the rich”.
That’s how this will be attacked.
This guy is interesting. He points out a number of areas that could save the taxpayers some money. Think Javier Milei style cuts.
https://petersantenello.com/videos/inside-americas-corruption-capital-washington-d-c/
Most of the “alphabet departments” were created in the late ‘60s and ‘70s basically in an attempt to placate rioting hippies.
They can be dispensed with. And should have been long ago.
At least halve them.
Weaken the power of government services unions. Make it open shop at least with the possibility of union members suing the union for misdirecting funds.
..lots of things to do. Make teacher unions open shop..
make it only for each state.
Tax write off for private or home schooling...or public schools. Force public school budgets to tell taxpayers how much of the taxpayers tax goes to education and is therefore write-off possible.
“ Of the 85% of benefits subject to income tax, 50% goes to Social Security and 35% to Medicare Hospital Insurance.”
So they tax us to pay for the program that pays us, then when we finally get to get paid they tax us again to pay for the program. It’s a snake eating its own tail.
L
My mom would approve of that she pays so much for the damn property taxes here in so cal it’s ridiculous
So true! Ours just went up again. 15 years ago when we bought the house our mortgage was 1400 a month and now it’s 1800, even though we’ve paid off a lot on the actual house! Some of that is higher insurance rates but mostly it’s taxes.
As for SS, taxation on it is too complicated. Taxes have been paid on half of the "contribution" already, your part. Make 50% of it taxable for the amount above the poverty level x2 and forget the rest.
Most things the gooberment does are way to complicated. It is intentional. NObody can screw up so much by accident. The Part D drug scheme for example, donut hole? Why? Incentive to better manage drug costs? Really? Is that scheme working? I see that in '25 it becomes simplified but we will see if it actually becomes less costly.
Gooberment never helps those who need help and tapers off the ones who just need a little help. It is all or nothing to and past the cut-off points. Idiocy.
Want to save some money? Some real money? Eliminate baseline budgeting and go back to zero base budgeting. Give congress something to work on besides making stupid laws, more programs and fiddle farting around. Justify every penny every year and encourage savings instead of the spend or lose it incentive and the built in increases now. Baseline budgeting is why government has automatically outstripped inflation far and away.
A side benefit is the 12 to22 tax bracket switch - currently about $95K. If a couples AGI is $95K any Mandatory Distribution (MD) would be taxed at the 22% level. If SS is no longer part of AGI, MDs would only be taxed at 12%
It would also help retirees who are working or would like to work. If you want to work while drawing Social Security it gets complicated to work more than part time.
Trying to balance working just enough hours without earning over the amount that triggers the complications with needs of employer for any decent job can get tricky.
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