Wow. Not only is Biden going to tax us to death, but he’s going to take away your 401K tax benefits.
https://www.google.com/amp/s/www.cnbc.com/amp/202…
Basically it’s a crime/sin being rich/doing well for yourself in this country.
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Give it a break.
You're only paying couple hundred dollars more in tax. Cry me a river.
You can literally make up for that loss by making your own food for couple weeks instead of ordering Postmates everyday.
Also the title is a major clickbait. Cringe tbh.
democrats believe success and failure are completely external. Culture, effort, skill plays no role in their mind. If it’s all external might as well redistribute it. They want to turn the us into calcified low income, low growth Europe as long as it’s also low inequality (better we’re all poor than some rich).
Indoctrinated and cringe.
That read like a Democrat saying "Republicans want to turn this country into a Christian state where gays are persecuted and minorities are discriminated against".
Go read the article. Biden is literally suggesting that you get a flat rate tax credit of 26% on the amount of money put into 401Ks.
If your tax rate is above 26% then literally do this "your tax rate - 26% x your 401K rate"
If my tax rate was 30% and im putting away 5% of my income to 401K, that's
4% × 5% = 0.2% more tax that I'm paying. That's fucking nothing. If you're making 6 figures than you're only paying couple hundred dollars more.
Economically speaking, somebody making 6 figures losing $200 a year doesn't impact spending. Somebody making below GDP per capita gaining $200 a year more and saving more money is a short and long term economic stimulus.
Milton will you stop with all the logic and reading comprehension and just LET US HATE POOR PEOPLE /s
For all the dumbasses about to cry a river, here's what the article says.
Instead of tax deductions on 401K savings, you get a flat tax credit of 26%. If you're taxed at below 26%, you're actually making money more you put away to 401K. If you're taxed above 26%, you're losing a tiny bit.
Say you're taxed at 40% and you put away 5% to 401K. Then your effective tax increase is (40%-26%)*5%=0.7%. That's NOTHING. You're paying less than a single percent more of tax.
Also it's literally a form of Negative Income Tax. You know the concept created by yours truly, Milton Friedman? The guy who won the Nobel Prize in Econ and the Presidential Medal of Freedom from Ronald Reagan? Did you know that Richard Nixon, perhaps the most disagreable Republican president, tried to convince the Congress to pass Negative Income Tax laws?
I don't think this is a problem pertaining to only rich people. I think the average person in the US is taxed way too much.
It starts at 0.7% and will eventually keep on climbing up. Why is it that I'm paying so much in taxes, yet my pay is barely increasing and cost of living is sky-rocketing?
Instead of taking away more money from people, the government should instead lower the pay of those who are skimming from the top and making $600,000 working 9-4 in government roles where the pay shouldn't be more than 100k. If you do that to 100 people, that's 50 million in freed funds that can be used for schools/mental institutions and other programs that will help the country with its current issues.
There's a huge problem with government waste, and too many people are being over-paid for their government jobs, and too many government agencies are not utilizing their money effectively and only asking for more. Did you know that government agencies' budget is determined by the amount spent in a given year? Consequently, those gov agencies are incentivized to spend money on nothing to keep them from having a lower budget for the next year. It's frustrating to read stories on reddit from gov employees about how those institutions are spending money on random stuff like new couches to keep the same budget for next year.
I agree on the government waste part. I've been very vocal about how much overhead the US government has and how restructuring the executive branch and consolidating bunch of agencies would save us hundreds of billions if not trillions in tax revenue.
But this article is about redistribution that wealth to people in the lower tax bracket + encouraging lower income individuals to save more so they don't end up dirt poor when they retire.
Unequal amounts of wealth >>>>> equal amounts of poverty
I don not think this is going to be a big deal but I need to take a closer look at this. I think the current tax structure should be addressed again. I personally benefitted from Trump's tax reform as both me and my wife have pass through entities. I think that many people who live in the northeast/other high property tax states and who work for corporations probably saw their taxes go up due to SALT. For exemple, people in NJ, might pay $20,000 or more in property taxes and they are capped on a deduction at a much lower level. The tax reform resulted in most people taking the standard deduction instead of itemizing.
Can someone explain this simply to me. I'm not an accounting person, and this kind of stuff confuses me. I get how the tax breaks will be lessened, but not much else. Is it that everyone will be taxed 26%?
OP should reading the damn article. It adjusts the benefit slightly for a high earner and it would only affect $19k of income anyway. Does this even affect the OP who doesn't demonstrate an ability to read or think? Hard to imagine they're in the tax bracket that would be slightly dinged.
Given the advantages of the government incentivizing saving for retirement, this could potentially be a good policy if the tax credit were 26% as advertised, along with current rates and brackets. For 2020, there's a $19,500 limit on elective deferrals, so the maximum tax credit would be $5,070. The 2020 top marginal rate is 37%, so the most it could cost anyone would be $2,145 ($7,215 - $5,070). However, Biden supports raising the top marginal rate, and it's very possible the Dems, if victorious, could change the brackets, which is a tested way of raising taxes on most people without making it look like a tax increase -- rates in each bracket stay the same but kick in at lower income levels. If that happens, the 26% tax credit replacing pretax retirement contributions could soak a lot more people.
The policy challenge is to encourage more retirement saving without giving up too much tax revenue. But in the ugly process of crafting legislation (like sausage making, something you don't want to watch), it could all too easily end up as basically a stealth tax hike.
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