2017 Politics open thread, October 15-21

Any political comments?

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96 thoughts on “2017 Politics open thread, October 15-21

  1. The couple in Maine appear to have been self-employed during most of their prime working years. Even if most employers still offered pensions, they wouldn’t have been eligible for one. They don’t have retirement savings because they didn’t have enough disposable income to save. In that respect, how are they different from their counterparts in previous generations? What did their own parents do at the same age, if they lived that long?
    Wondering how much of this trend is people living longer versus not having the safety net of a traditional pension.

  2. Scarlett, thank you for that link. It’s helpful to see another view point and it supports my opinion that much if not most journalism is agenda driven.

    My anecdata informs me that senior citizens who were entrepreneurs tend to be worse off financially than those who were not.

    Later, they ran a business that put vinyl siding on homes and a little start-up called Southwest Stuff that sold Western-themed knickknacks.

    They raised two children and lived well enough but never had much extra cash to put away.

    The older entrepreneurs I know seemed to have lived good lives but failed to save sufficiently for their retirement. They invested in their businesses and had lifestyles that were perhaps a little too extravagant at times. Maybe it’s because in good years they felt “rich” and did not cut back on personal expenses during the lean years. My armchair analysis is that these entrepreneurs are more risk tolerant than worker bees (totebagger types?) who tended to save more consistently for their old age.

  3. They don’t have retirement savings because they didn’t have enough disposable income to save.

    Their $22k in SS indicates a (certainly not totebag level but decent for middle America) income. They didn’t save because like 10s of millions of others they just never got around to it for any number of reasons.

  4. Even if most employers still offered pensions, they wouldn’t have been eligible for one.

    There is no reason pensions need to be tied to employment.

  5. The part of the story I have the most issue with is in regard to the retirement account fees. As a very amateur retirement plan adviser I’ve come to see that what so many people need is someone to hold there hand and walk them through the process. The way the financial advisory world works, there is no interest in doing that. I’d say we either need to go the Singapore/Australia route or we need to allow enough money to be made off these accounts to warrant the hand holding.

  6. The poverty rate among working-age Americans is roughly double that level; among children, it’s at least triple. If poverty drops as Americans retire, how can that be a sign that our retirement system — which combines Social Security with employer-sponsored retirement plans and personal saving — isn’t working?

    The poverty rate for a retired couple is $14,604k per year. So, as an example, if when receiving SS 8% of retired couples incomes went up to $14,605 while 32% fell to $14,605 the author would say that’s a success because the poverty rate fell. And he’s criticizing the author for using statistical nonsense?

  7. If pensions aren’t tied to employment then who would fund them? If the answer is people would find them themselves, that’s called savings and people can already do that.

  8. I thought the chart comparing avg SS payout with federal minimum wage was a red herring. Or as a boss of mine used to say “comparing apples and gorillas.”

    Yes, originally, the federal minimum wage was supposed to be enough to support a typical family. No one believes that any more.

    SS was/is intended to help keep seniors out of poverty. We can argue whether the benefits are sufficient to do that.

    To compare it with the federal minimum wage just feels wrong to me and seems inflammatory.

  9. What is the rule/law re SS for someone who never paid into the system, was never a spouse of one who paid in and who now has no assets? Is there a minimum payout for everyone with a SSN once they reach eligibility?
    (perhaps my question is farfetched. The two examples are the trust fund baby who squandered all wealth or perpetually homeless person who is now 62/65yo.)

  10. If the answer is people would find them themselves, that’s called savings and people can already do that.

    They can but 10s of millions don’t. A “pension” in this case would amount to, more or less, a deferred annuity. You pay Prudential $50/week when you’re 25 and they invest that money and promise to pay you no less than (for the sake of argument) $1000/month when you’re 65. This differs slightly from a traditional pension as the amount isn’t fixed but rather it’s based on market returns with a minimum guaranteed return.

    Now in your totebaggery you’d say you’d be better off with a low cost Vanguard target dated mutual fund, which is certainly true. But, for the average person, this is a lot more straight forward and easier to understand. – you’re just buying a pension.

  11. Fred,

    I assume you’d end up on SSI because at some point you’d qualify as unable to work due to old age.

  12. From the NR article: “Social Security Administration data for 1980, near the peak of traditional pension coverage, found that fewer than one-in-ten new retirees received any benefits from a private pension; even among the richest quarter of the population, only half received private pension benefits.”

    Pensions were never a significant component of the average retiree’s income, particularly among those with lower incomes.

  13. Scarlett,

    Pensions were never a significant component of the average retiree’s income, particularly among those with lower incomes.

    And that’s ideal?

    Are you saying out current system, which came about more or less by accident, is the best possible system we could ever hope to have?

  14. People over 65 who are not eligible for SS can get SSI. People ineligible for Medicare can get Medicaid. You are ineligible if you did not pay into the system or don’t qualify on someone else’s work record. Elderly non citizens without work records are in general not eligible for any of these programs, but there are some exceptions.

    Expanded SS and Medicare have eliminated the sort of desperate poverty and rapid medical decline that used to be routine for much of the elderly, especially elderly women, and have allowed people like those profiled in the article to live independently.

  15. This differs slightly from a traditional pension as the amount isn’t fixed but rather it’s based on market returns with a minimum guaranteed return.

    Note: This is similar to the system Singapore uses.

  16. “Among people between 55 and 64 who have retirement accounts, the median value of those accounts is just over $120,000, according to the Federal Reserve. ”

    A question that I always have in these articles – that is the median value of any individual account, no? So if I person has 4 different $120,000 accounts from various old jobs, that would be counted here as $120K not $480K. Are others reading that the same way? It’s misleading.

  17. Ivy,

    As I read it “‘median value of those accounts” indicates the combined value. To read it as you do they’d write, “the median value of each account is just over $120,000”

  18. Rhett, not saying that it is ideal, just that it has always been difficult for those of modest means to retire.

  19. They can but 10s of millions don’t. A “pension” in this case would amount to, more or less, a deferred annuity. You pay Prudential $50/week when you’re 25 and they invest that money and promise to pay you no less than (for the sake of argument) $1000/month when you’re 65. This differs slightly from a traditional pension as the amount isn’t fixed but rather it’s based on market returns with a minimum guaranteed return.

    First, people would have to voluntarily sign up and make the contributions. Why would they be any more willing to it for this than any other savings vehicle?

    Second, aren’t products like this already available?

  20. My point is that anything that is self-funded is simply some form of savings that people are already able to do if they choose. Pensions are an employer-funded benefit, so by definition they are tied to employment.

  21. July said “My anecdata informs me that senior citizens who were entrepreneurs tend to be worse off financially than those who were not.”

    A number of pundits have been noting that US society does not seem to be as entrpreneurial as it once was. Given the lack of support given to those who strike out on their own (poor healthcare insurance market until 2010 and maybe soon to be bad again, lack of retirement support), is it any wonder why?

  22. Prior to SS, there were many fewer people of truly modest means who lived past 65. Those who did mostly worked till they dropped, lived in poverty, or were part of multigenerational households, happily or not. SS initially did not include agricultural workers and domestics (excluding most African Americans was required to obtain passage) or non working wives/widows. These omissions were corrected sooner or later, starting with the widows. mid 1960s introduction of Medicare, which along with the anti smoking campaign and cheap bp and cholesterol drugs greatly increased life expectancy after 65 years of age, resulted in a large population of seniors of modest means who are physically able to be active, including working, and have enough base income via SS to choose to live and/or to be expected by younger generations to live somewhere other than the back bedroom.

  23. Ivy,
    I had the same view as you, though Rhett’s interpretation is likely, too. It is unclear. In addition to the 401k at her current employer, DW has a rollover IRA from a previous job that has ~$150k in it.
    So I was thinking about it the way you were, that the fed might be missing a lot of $$ stashed away for retirement if they aren’t looking at it e.g. what’s the amount tied to the SSN.

  24. First, people would have to voluntarily sign up and make the contributions.

    Why do you say that? It could easily be opt out rather than opt in.

    Pensions are an employer-funded benefit, so by definition they are tied to employment.

    That isn’t true. Many pensions require an employee contribution as well. And there is nothing about a pension that requires an employer component.

  25. “My anecdata informs me that senior citizens who were entrepreneurs tend to be worse off financially than those who were not.”

    Interesting. Among those I know 4 out of 5 are at the “buy my wife a Mercedes convertible for her 75th birthday” level of retirement comfort.

  26. people are already able to do if they choose.

    But due to the accidental nature of our current system it’s needlessly complex and requires more executive function and cognitive ability to navigate than is necessary.

  27. Opt out with an automatic paycheck deduction of a minimum of 3% was shown to be effective. Then bombarding participants with emails like “you require X dollars” to retire, increase your contribution to 6% works.
    6% was the company match.
    I loved the tool the employer provided and made sure I was in the green zone not the red.
    Of course the whole thing came with assumptions and fine print but it did make the people starting out save.

  28. “Among those I know 4 out of 5 are at the “buy my wife a Mercedes convertible for her 75th birthday” level of retirement comfort.”

    Rhett, you know that you’re rich and have rich friends, right?

  29. First, people would have to voluntarily sign up and make the contributions.

    Why do you say that? It could easily be opt out rather than opt in.

    Then it would be a government mandated program. Do you think that would have any chance whatsoever of passing?

    Pensions are an employer-funded benefit, so by definition they are tied to employment.

    That isn’t true. Many pensions require an employee contribution as well. And there is nothing about a pension that requires an employer component.

    I guess we’re hung up on semantics here. If the employer isn’t contributing, how is it any different from a 401k or IRA (in a general sense, not in the specifics)? If an employer isn’t contributing, then of course there’s no reason it needs to be tied to employment. If an employer is contributing, then how can it not be tied to employment?

  30. But due to the accidental nature of our current system it’s needlessly complex and requires more executive function and cognitive ability to navigate than is necessary.

    It’s really that hard to go down to your local bank branch and open an account?

    Maybe I’m totally misunderstanding your point, but here’s what I’m getting from this: Currently we have a system where many employers offer some sort of retirement benefits, whether that’s a pension or 401k, which the employer might or might not contribute to. When an employee is hired, someone from HR explains all the benefits to them so they can sign up (and this is usually repeated every year at open enrollment), so this takes care of the people with poor executive function. Signing up through an employer also allows contributions to be automatic, thus relieving the employee of the burden on making contributions on their own.

    You are proposing to decouple this from employment, which I can totally agree with. But then you say again that many people don’t have the cognitive ability to handle this on their own, so it should be opt-out rather than opt in. The only way an opt-out system can work is if there is a legal requirement for people to participate or actively opt-out.

    Or am I completely missing something?

  31. To me, a big advantage of pensions and social security is shared risk. If you live a long time, you don’t run out of money, On the other hand, if you die young, you have a negative return on your contributions but, since you are dead, you** no longer care.

    **Your heirs might.

    The problem with a pension system run/managed by employers is that companies are volatile and may promise pensions that are greater than what they can fund. Pension funding depends on economic and demographic assumptions that are not reliable over a period of decades.

    I’m reasonably satisfied with our current system of social security/Medicare. Low earners have a ~$1000 base minimum that keeps them from abject poverty and Medicare handles most of the medical expenses, with Medicaid as a backstop.

    Now we just have to raise taxes so that we can fund our existing system long-term, along with other goods we desire, such as adequate public education. (I’m a fan of eliminating the cap on W-2 income on which social security tax is paid to fund social security, and using any tax increases on the rich people with mostly capital gains income to subsidize healthcare for the poor/working class. If the federal government continues to fund social spending without raising taxes, instead of a targeted tax, we will have an untargeted tax in the form of inflation.

  32. Houston, arguably you have universal basic income for people of eligible age. I thought universal basic income was supposed to be independent of age.

  33. If you decouple pension from employment, you have universal basic income.

    In other words, a government program. We already have a government program for retirement, wouldn’t it make more sense to tweak that one instead of coming up with something new?

  34. DD – exactly what I was thinking.

    There are multiple ways to “fix”, if it needs fixing, SS. By fixing, I mean to provide people with more income in their golden years.
    (1) remove the cap. I think this year both the employee and the employer pay 6.2% of the first $127,200 of earnings into the pot. Self-employeds pay the whole 12.4% themselves. People who earn > the limit can, IMO, afford the additional cost. The political minefield is with employers because 6.2% across all the earnings for all the employees making > $127,200 can be a lot of money.
    (2) increase the % withheld
    (3) fix immigration so we have more workers contributing to the pot.

    Without doing any research, I think #1 would be sufficient (but also essentially impossible).

  35. If you decouple pension from employment, you have universal basic income.

    No, you’d have everyone default into a low cost differed annuity product that would pay out at retirement. The only involvement you’re employer would have is using the direct deposit system to route the money to your account.

  36. “No, you’d have everyone default into a low cost differed annuity product that would pay out at retirement.”

    How would you get the unemployed to contribute?

  37. “we will have an untargeted tax in the form of inflation.”

    A concept I’ve raised here in the past. Get rid of the IRS, just print money to pay for government expenditures.

  38. “A number of pundits have been noting that US society does not seem to be as entrpreneurial as it once was.“

    The medical profession seems to be getting much less entrepreneurial.

  39. Rhett, how does what you describe differ from SS?

    Several way:

    1. You’d default into a differed annuity contact with an insurer.
    2. You could opt for a different investment mix

    It would be similar to SS in that loans, withdraws, cashing out when you leave a job etc. would be forbidden.

  40. “They’d end up on SSI like they do now.”

    OK, so no private annuity for them. What everyone gets out is directly based on what they put in, modified by their choices of investment mix, market performance, etc.

  41. Why don’t elderly people live with their kids in extended families like in the old days? Not ideal, but it can be an option for those with little savings. The SS income can help support the house hold.

  42. Why don’t elderly people live with their kids in extended families like in the old days?

    Many do. Although in all the instances I know it’s always a widowed or divorced woman. Other than Louise, I’ve never heard of anyone living with both parents. There is also the divorce issue, I doubt there are too many adult children clamoring to take in their divorced parents.

  43. “Why don’t elderly people live with their kids in extended families like in the old days?”

    Because it can be so incredibly trying for everyone involved. My mother’s mother lived with my parents, my brother, and me for about 20 years, and it was really difficult, especially on my mother. My mother, God rest her soul, swore she would never do that to my brother or me (and she didn’t).

  44. The in laws are an example of people who have not paid into either SS or Medicare and are ineligible for both. Their earnings were in home country currency which doesn’t equate into much in dollar terms. To be eligible for Medicaid they would have to spend down their modest pot of savings primarily on a very cheap condo. There would be nothing left over for condo fees etc. In order to have this modest pot as a sort of emergency fund they live with us. A perfect example of people who don’t have much in terms of savings and are ineligible for the major government programs.
    If they were living in the home country they would still be leading a modest life but would be fine covering the basics because FIL does get a pension that is enough to live on. He also gets medical care covered at the government hospitals but the level of care at those hospitals leaves a lot to be desired. When they lived in the home country, DH and brothers sent money so that their parents could lead a little more comfortable life.

  45. “Why don’t elderly people live with their kids in extended families like in the old days?”

    Because we are endlessly told we must push our kids out. It has become this cultural norm that kids should go as far away as possible. No wonder the kids don’t want us.

    In sub communities where this is not the norm, there is more support for elderly people. I have a co-worker from a very traditional Italian-American family in Queens. She and her siblings went to college in the city and lived at home. She isn’t married so she still lives at home, with her elderly parents and even more elderly grandmother. Her married siblings, who have kids, live right down the road and eat with the parents many nights. She is very involved with her nephews and nieces and functions as a major source of childcare for her siblings. It is a lifestyle that many of us would find difficult, but there is no question, there is a lot more support for every stage of life in a family like that. As I have mentioned before, my husband’s family is also very much like this.

  46. When my husband was a kid, his family lived in a triple decker with his grandparents on top, and aunt and uncle and their kids on the bottom. His family lived in the middle. I think that is a great solution.

  47. There are no ideal solutions for elderly who have not been able to save enough funds for independent retirement. Living with family members is a feasible option. Another is to never retire. A third option is to create a complex and expensive new entitlement that takes money from other parts of government and gives it to the elderly.

  48. There are no ideal solutions for elderly who have not been able to save enough funds for independent retirement.

    After the horse is out of the barn, you’re right. But other countries have had better luck with other systems that had more thought put into them than our accidental reliance on a obscure portion of the tax code designed originally as a way to limit highly compensated employees from sheltering their income.

    We tend to think of 401(k) plans as the bedrock of the retirementsavings system.

    But these plans, named after a section in the InternalRevenue Code, were actually developed more by accident than by design. When lawmakers originally established theRevenue Act of 1978, the goal was to limit executives at some companies from having too much access to the perks of cash-deferred plans. (Why, you ask? Since the 1950s, companies had been fighting with the InternalRevenue Service to allow moremoney to be squirreled away in such plans.)

    http://www.nasdaq.com/article/the-surprising-origins-of-your-401k-cm258685

    For examples of a better system:

    https://en.wikipedia.org/wiki/Superannuation_in_Australia

  49. The elderly in this country, with few exceptions as noted above, are the one group that already has a safety net. My friend’s mom who spent 25 years in the double wide in Tucson had enough on SS to get by, rather than languishing in the back bedroom of her other son’s dilapidated scratch farmhouse in Minnesota. In her last illness, my friend who was better off went to her as needed to avoid relocation and disruption. She had medicare, and went to Mexico twice a year to buy her meds. She left an estate of a illiquid trailer that was discarded, a jalopy, a storage locker filled with junk, and a few thousand in the bank that covered final arrangements. In the very last years or in situations of illness, everyone no matter how wealthy needs an advocate or someone to watch over them. Isolation and abandonment are separate issues from basic paying of bills.

    It is not always the kids who don’t choose life with the old, it is also the old who don’t choose life with the kids. I have many acquaintances in the triple decker ethnic world, and while it works well for the clan, there are always a few escapees and a few members who must accept the constraints of their assigned place in the family universe, not always contentedly.

  50. In the very last years or in situations of illness, everyone no matter how wealthy needs an advocate or someone to watch over them. Isolation and abandonment are separate issues from basic paying of bills.

    This is a big issue. Even in the home country where culturally the elderly are taken care of, if you are dependent on people who don’t want to take on the advocate role your level of care is very poor.
    As some of our regulars have posted they had to become involved in elder care advocate roles or were satisfied that someone else wa doing an adequate job.

  51. Back to Social Security. I got an email from SS saying it’s time for my annual account look-see. So I did that for us last night.

    The great news: If I choose to work till 70, which would make DW 67, and our investments were at the amount they currently are we could annuitize enough of our current salaries for the subsequent 22 years and not touch the principal if SS pays out according to the current schedule. (assumes annual 4.17% earnings and 4% withdrawal rates on our savings). So I feel much better about us being on track to be comfortable in retirement. Excludes any financial good news from our house and bequests from parents (both sides).

    Despite having a fairly cush job that pays well, I definitely do not plan at this point on working to 70. I wasn’t up wasn’t up to doing the math last night for the what-if cases of 65 for me (the earliest I can see hanging up the spikes given the way we currently do health insurance in the USA) and 67.5 (highly likely). But I’m feeling better about things overall, because the “number” I had been thinking we need to make things work was much higher than what I now think it’ll take.

    Assuming SS exists.

  52. “The great news: If I choose to work till 70”

    Do you really need to work until 70? Since the news was a result of viewing your SS account, if you’ll already have 35 years of good income paying FICA before you’re 70, you could retire before that, and just chose to not start collecting SS until you hit 70.

    That’s my plan.

  53. BTW, that leads to another possible way to make SS more solvent: base payouts on a longer work history. Currently, there’s no benefit in terms of SS checks to working more than 35 years beyond replacing some lower paying years already counted to the 35. Increasing that provides an incentive for people to work, and thus contribute, longer.

  54. Finn,
    agree with all you wrote. That’s why I need/want to build a model/do the math beginning at a lower age, say 65 for me, to see what it says for what we need in savings given projected SS payouts. Knowing me, I’ll end up doing something that shows what it’ll take for me to be mentally comfortable at each (year) age from 65 to 70.

  55. Fred – All you have to do to figure what you will have if you stop working at your full retirement age if it is 66, and wait till 70 is to collect, is to look at the payout they say you would have if you stop working at full retirement age and multiply by 1.32 for what you get at 70. You will see that the payment difference if you keep working or just let it sit is pretty minimal. Modeling software can handle almost any scenario you devise, at least modeling software that cost a few dollars, figuring out your mortgage paydown, pretax and after tax saving out of work earnings, investment effects of taking money out prior to 70, etc.

  56. “You will see that the payment difference if you keep working or just let it sit is pretty minimal.”

    This does assume that you would already have 35 years contributing to SS, which is likely the case for you.

    For people who have taken time out of the paid workforce, or worked for a while in jobs in which they did not pay FICA (typically government jobs), the assumption may not be valid, and effect of the extra years of working on the payout may be more than minimal.

  57. Fred I saw an article saying that in 10 years or so, retiree health care costs will equal around 124% of social security. That was more than I had been using in my planning. I think I was using something like 25-30%. Can I ask what others are using for healthcare cost estimates in retirement?

  58. Medical costs, including medicare, supplement premium, routine meds, copays, etc should run 500 a month, maybe less, per person.. My HMO style medicare plan costs just the medicare premium (120 base, 180 next income tier, and up) and the out of pocket is capped at 4000 a year. An employed totebagger’s social security is going to be 2500 a month. So Becky, your percentage is much more reasonable. I think the articles use a number like 250K total for a healthy 65 year old couple. If you are retired for 20 years, that would be something like 500 per month per person.

    Most people want an additional chunk of money for the final years if attendants are needed or assisted living, but in the spreadsheet that should come out of the late life care/inheritance bucket, not the daily cash flow bucket.

  59. Hmm, perhaps I need to budget for more than $500k:

    https://www.cheatsheet.com/money-career/soon-wont-be-able-afford-health-care-retirement.html/3/

    “Health care will be one of the most significant retirement costs. HealthView Services predicts lifetime health care premiums will hit $321,994 for a healthy 65-year-old couple who retire in 2017. This includes Medicare Parts B and D, supplemental insurance, and dental. But these estimates are just a starting point. When adding deductibles, copays, and other out-of-pocket costs into the mix, that number grows to a stifling $404,253 in today’s dollars.”

  60. Becky – I am a light user and my 75 year old husband is a power user. When he spent a week in the hospital with his heart condition, on the one tier up from the bottom Medicare advantage plan his entire bill was 1200. He has a combined premium of 160 a month (mine on the bottom tier plan is 120), which goes up by law to 300-260 a month in years when the prior tax year had a lot of investment income, but comes back down in less prosperous times. He never reaches the donut hole on his many meds, all now generic. It is completely prudent to put aside a chunk of untouched money for late life care (what I call the inheritance bucket), or to have long term care insurance, or both, and a bit of money in the current pot put by for hearing aids (not covered – a single year expense – think of it in the same way as having money put aside for a new roof or boiler). It is not the year to year medical care itself or insurance that is expensive. It is the personal care or in many cases supported living situations needed at the end of life. Rehab after an illness is often covered by Medicare. And if you don’t have family nearby, paying someone to do all things family usually assist with in your last years, especially if you don’t drive.

  61. Thanks Meme. That is helpful, as I was really focusing on the monthly cost.

    Through my employer, we will have no retiree healthcare plan. My DH’s employer is noncommittal. We pay money to have the option to have it if they decide to offer it. If they do not, we will get that money back, but if they do decide to offer it, we cannot opt in if we have not paid in all these years. My guess, given the current cost environment, is that they will decide not to offer it.

  62. MyRA seemed like a solution in need of a problem. Vanguard has either a $1000 minimum for its retirement accounts with 0.05% fees (quite reasonable) or (for ETF accounts) a 1 share minimum, no $1000 balance required. The local credit union requires a $5 minimum balance and has no fees for basic accounts. You have to buy your own checks.

    If the federal government is serious about saving, they should reduce the identification/paperwork requirements, at least for people under 18, so kids can get in the habit of being “banked”. It was a hassle to open accounts for my kids and fewer teens have bank accounts than In My Day. We switched from checks as awards for the essay contest I manage to gift cards. $75 checks to middle school winners were left uncashed, due to no way to deposit them.

  63. When DS got his job, I didn’t even thing about MyRA, I just opened a Roth IRA for him.

    One issue with MyRA is the $15k limit. I’m hoping DS exceeds that fairly quickly.

  64. And while we are all distracted with the fallen soldier dispute, the Republicans evidently want to limit our ability to save for retirement via 401K’s? I can’t see people going for that one,

  65. Re cuts in 401k contributions: I had not been aware of this one and agree many constituents will oppose this. Someone who just returned from an investment professionals conference told me this was all the buzz there. But I’m not sure who will win out, politicians looking for short-term revenue or lobbyists striving to protect their interests.

  66. The optics are bad – cut back the main retirement savings vehicle for the middle class to fund tax cuts for the rich. I just can’t see that playing out well.

  67. They are going to propose so many things that fall primarily on the lackey/professional class (us) that they will wear down the resistance and in the end we’ll be happy our 4000 tax hike is not 8000.

  68. I thought that everyone did believe Corey Feldman. The same few names float around as potential perpetrators.

    I hope they do the 401(k) and SALT changes.

  69. The vague proposal only allows mortgage interest and charity, no health, casualty, miscellaneous, investment etc. and eliminates exemptions. If tax rates were going to be slashed I can see that being a great simplification strategy, since very few filers would itemize. But in practice with proposed rates it has little benefit to the lower and true middle class, and gores the UMC. I should say that I would support paying more taxes myself if the offset were payroll tax relief for the working and true middle class. But it is not – it is reducing taxes on the top tier and starving the government beast.

  70. Meme – yes. We just filed our returns last week, so this is fresh in my mind. Mortgage interest deduction, state/local taxes including state income, local personal and real estate, max out 401(k), charitable, tax prep fee. Our largest by far are the SALT ones.

  71. Meme – sorry. I misunderstood your question.

    Not really. I see no reason for them. And they help the UMC and above in a disproportionate way. I would rather have a large standard deduction and then the tax brackets.

    It doesn’t really please me that the winners of this tax reform will be the wealthy, but that’s what you get when the government is all red. And that’s who got the votes.

  72. 401K’s certainly do not benefit the truly poor, but I know an awful lot of middle class (not UMC) folks who have them and save in them. Why do we want to make it harder to save for retirement?

    When they change the tax plan to dramatically shift the money to the poor, then I will rethink my position on this.

  73. “And that’s who got the votes.”

    Um no, actually not. The popular vote went blue

  74. Not for Congress. They got the votes. We have big problems with gerrymandering, but the red team is king right now and we put them there.

  75. It’s unlikely that taxpayers earning the median income are socking away more than a few thousand in retirement plans. They won’t be affected by the proposed changes nearly as much as prudent UMC Totebaggers will. The same group who prevented Obama from killing the 529 plans.

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