…but are sure they are the most heavily taxed people in the world.
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/s aside: only if one assumes the current tax rates are on the right side of the Khaldun / Keynes / Smith / Mellon Curve. It is possible that the current tax rates are on the left side. No one seems to consider where they exactly are before proposing the thing they want to do.
I read it. I like some things. Yep, balancing Social Security should partially come from cutting benefits for retired actuaries and other high income people. I like capping the tax savings rate on itemized deductions at 15% (I’d eliminate them entirely). Get rid of the TCJA 20% discount for pass-thru businesses, eliminate step-up in basis, hire IRS auditors. Those are all good.
But, I don’t like other stuff. It seems to say we can save significant Medicare spending by privatizing Medicare. I don’t believe that. It raises tax rates on high income wage earners, but doesn’t raise cap gains tax rates on billionaires. I’ll pass.
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Also worth noticing that a comparison of tax *rates * is often counter intuitive. If you make the taxable income smaller, the rate goes up! Magic!!!
It takes a closer look at the definitions to draw any meaningful conclusions about the tax burden. The US has tomes and tomes full of adjustments to gross income. I mean, there has to be a reason for Intuit to exist, amirite?
Like I said, it’s pretty easy to find individual items that you might disagree with. She does a good job explaining why “tax the rich” will not come close to fixing the deficit. I’m down with capital gains over some threshold being taxed higher. As a bonus it might lead to a temporary tax windfall.
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I disagree with cutting SS benefits for anyone. You pay into the system, you should get back what you pay.
It’s sad that SS has turned into the largest ponzi scheme in the world.
But we haven’t paid in as much as we’ve promised ourselves. Plus the first recipients didn’t pay in anything. Frankly taking anything is pushing that unethical decision down a generation.
I agree with this in principle.
Our Liberal government put forward legislation to do this in 2024 but it got withdrawn after Trump started his assault on Canada. Tax cuts rather than tax increases have prevailed here since then.
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SS did not “turn into” a Ponzi scheme.
The very first retirees in 1940 got all their taxes back in the first 2-4 months of benefit payments. After that, all their benefits were covered by the taxes on active workers.
SS has been paygo since the beginning.
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So eliminate the insurance portion? No one gets more than they pay in? Everyone gets no less than they pay in?
I used to think that part of the push under the younger Bush to privatize Social Security was to make people more aware of the progressive nature of the benefit calculations as they saw that what went in was not what changed in their account balances. Well, that and to make his Wall St. donors money.
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Sadly, that’s not the way the system is designed.
Despite the trappings to avoid upsetting too many people scared of “socialism”, it’s always been a social contract creature – you pay money to support old people, disabled people, and orphans, and in return you get money when you are old or disabled.
Sadly, the powers that be haven’t kept up with the mathematic reality imposed by demographics / actuarial calculations and chose to use temporary surpluses for other things.
We could move to a different structure, where your future benefits are funded by your current contributions…but someone’s going to get pretty badly screwed in that transition.
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We needed to do that much earlier, like Canada did. It is too late for us to do this now with just employee and employer contributions.
It was painful, even in 1997, to put the Canada Pension Plan on a long term stable funded basis. It required increasing employee and employer contribution rates by about 80% over a couple of decades. The funding was enhanced by the creation of a professionally managed, independent investment fund. Unlike Canada, US politicians would probably interfere with such a massive pot of money.
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Out of curiosity, if someone dies before they get their money back, what happens to the balance ?
My impression is that GOP orthodoxy is that current tax rates are at the far right side of the curve. Any tax reduction will cause the economy to flourish as it’s currently suppressed under Stalinist level tax rates.
Others suggest we may be on the left portion of the curve.
Yup. That is what he believe/claim/think/are-told.
But, it is not easy (certainly not as easy as simply claiming) to figure out exactly where we are, since we have multiple types of taxes.
Well, let’s make it simple. I’m going to put total state, local, and federal taxes collected in the numerator, and use GDP as the denominator. No nuance at all. And I Know that peeps have favorite subsidies, tax deductions, and whatever. But I don’t want to debate which are good ones and which are bad ones. I’m just asking where the USA stands wrt other nations on that simple metric.
About 8% below average. It’s worth noting that the 2024 federal deficit was a whopping 6.28% of GDP. Now, how exactly does that line up with “highest tax rate”? Answer is: all those adjustments to income and items excluded from taxable income but are in GDP.
So let’s stop whinging about the high tax burden in the USA. Sure, if you look at the top marginal rate, it’s high. But who the fuck cares when you apply that rate to something called adjusted income? It’s all about defining terms.
You know what country has the highest average growth rate in GDP these past 5 years? It’s Ireland. All because the year in which Apple started to send all its marketing and brand income thru an Irish subsidiary. Ireland GDP rose 24% that year. Not that any Irishman became a billionaire, mates.
And while I’m at it, did you realize that the tariffs, if they succeed in eliminating trade deficits, will actually increase US GDP. That’s simply because trade deficits are a subtraction in the calc of GDP. Do ya really think the US is “richer”?
Link for chart:https://www.crfb.org/blogs/us-highest-taxed-nation-world
There’s no question in my mind that the US needs to pay higher taxes. It’s necessary. The current thinking among politicians is that keeping your job requires you to cut taxes and hand out more candies every year.
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Helps to raise other districts’ and states’ taxes instead of those who vote for you.