U.S. Budget & OBBB | OCT 1 - Gov’t Shutdown Begins
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p5mmr9
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Social Security isn't the problem. Healthcare cost is the biggest issue affecting Federal, State, and individual budgets. Cutting Medicaid will increase healthcare costs for everyone. Want to fix the budget? Fix healthcare.
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Yea
Of course the "plan" is to tax rich people-rich Corporations
Messaging that correctly is hard
And I don't know the "math"-it may not exist
EDIT
Soc sec is pretty easy compared to Healthcare or National defense
For high income earners with a tax break for bottom 75%
By 2029 SS Trust fund depletes to around 1 Trillion. Much of what keeps it going is the revenue derived from the trust fund which will be gone by around 2033. By that point, it would take an extra 300 B to 350B to make up the difference annually if I can remember the math correctly.
Perhaps you're are saying, fix healthcare and the general revenue can be transferred to make up the difference? If so, then that's a heck of a difference to make up.
Take away Trump Corporate tax cuts would help the math. The effective tax rates on many large corporations is in the single digits. That's a travesty. And we by far have the lowest Corporate tax rates of all the G-7 countries. And I bet their corporations don't have all the tax loopholes like ours have.
Interestingly, of the large, publicly traded corporations its estimated that up to 40% of their stock is foreign owned.
I suspect every Democrat will offer this as a solution. However, without closing loopholes and deductions you can't tax high income earners. They will escape every time. Sure, the lottery winners will have to pay.
superrific
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Tax capital gains. That's the solution in my view. We can start with baby steps: treat the use of equity as collateral as a realization event.
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However the fix for SS is simple. Remove the withholding cap.
TangledUpInBlue06
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The Budget Lab at Yale had interesting proposals on how to accomplish this: https://budgetlab.yale.edu/research...reatment-borrowing-against-appreciated-assets
Option (1): Deemed Realization for Borrowing
This option, based on a proposal by Liscow and Fox (2024), would treat loan proceeds as a “deemed realization” of unrealized capital gains. That is, borrowing would be treated as a realization event. After tax is paid, the basis of the affected assets would reset to fair market value, preventing double taxation if the assets are later sold.
Option (2): Withholding Tax on Borrowing
This option would apply a simple flat-rate “withholding” tax on loan proceeds, with the withheld amount creditable against future capital gains tax liability. Under the proposed 10% withholding rate, a $10 million loan would trigger an immediate $1 million tax payment regardless of the taxpayer's basis in their assets.
Option (3): Annual Excise Tax on Loan Balances
This reform, based in part on a Bipartisan Policy Center proposal, would impose a 0.5% annual tax on the outstanding balance of covered loans.1 In contrast with the prior two reform options, which would apply to net new flows of borrowing, this option would apply to the stock of debt. For example, a $10 million loan balance would incur an annual liability of $50,000.
Treat long term gains at a taxpayers normal tax rate or raise the rate? Seem like Biden proposed 28%, which we had for three to five years from 1988 to 1990 which happened to be the tax rate for those three years. Then 1991 and 1992 started going up on the top rate but kept the Long term Capital gains rate at 28% for those two years. What happened after that period of time really showed that the game for Congress was to raise tax rates but then give it back in special breaks like capital gains.
superrific
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I proposed the realization for borrowing a hell of a long time before 2024 but I guess I didn't publish it. You don't get credit for comments in workshops or job talks lol.
superrific
Master of the ZZLverse
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One thing that pisses me off -- I know I'm not the only one -- is why the billionaires are seeking tax cuts in the first place.
The point of being rich is that you no longer have to trouble yourself with such details. You don't have to make enemies just to save $20M on taxes when your net worth is 200x that. Do they also haggle over whether they got full credit for their discount rewards points at Subway?
The point of being rich is that you no longer have to trouble yourself with such details. You don't have to make enemies just to save $20M on taxes when your net worth is 200x that. Do they also haggle over whether they got full credit for their discount rewards points at Subway?
It would certainly help. I guess you mean raise the 176,100 cap I think it is? If you raise it too much, especially since basically talking about executive pay and then with the employer payroll match, you'd get into all kinds of motivated workarounds like stock options and such ,
This is interesting, but over my head. Will have to study this later and get back.
I could totally see Musk getting into a shouting match at the local Subway over his discount rewards point.
p5mmr9
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No. I'm saying the Social Security shortfall is mostly irrelevant and a distraction. As you note - Social Security is solvent for the time being. Its shortfalls in the future are easy to fix - remove the cap, reduce benefits for high earners, and raise the retirement age. Healthcare is a far more perilous problem and one that is eating away at federal, state, and individual budgets. Your post references messaging politics. I'm saying that SS is a distraction - fixing healthcare should be the message.