Saturday, October 21, 2017

The tax cut that's really needed --
but neither party will talk about it

No one --including the Schumer-Pelosi Democrats-- is talking about the one tax cut that should be made as a matter of basic fairness: excluding social security payments from taxable income.

Nancy and Chuck: getting ready to sell out the middle class
Why? Because that money has already been taxed when you earned it and the government took it out of your paycheck. That's true also of the tax on the employer. From the point of view of the company, what "they" pay is simply part of the cost of having you work for them, same as if it appeared on your pay stub. In fact, the main category for company bookkeeping is not "wages" but "payroll" which includes the taxes and the cost of benefits that do not appear on your paycheck stub.

The other part of the social security trust fund are interest payments on the bonds the government theoretically sells the trust fund when it takes social security tax money and uses it for other things, mostly wars and toys for the generals.

But aren't government bonds tax free? Exactly. Rich people pay no federal income tax on the interest from bonds they voluntarily buy from the government, whereas regular people pay tax on the interest from government bonds when the income finally comes to us in the form of social security payments.

And government bonds at all levels have paid much lower interest rates than they would have had to pay if the federal government didn't give itself an automatic "loan" from the social security trust fund.

If Congress is going to talk about cutting taxes, stopping the double taxation of seniors' social security payments should be the first item on their agenda. Social Security payments are way too low anyways: the average is about $1,300 a month, and they are being cut through the "raising the full retirement age" scam.

The first step in fixing social security should be to exclude social security benefits from taxable income.

No comments:

Post a Comment