I do not support means testing, and especially don't support it at the 50K level.
Perhaps 50K per child.
I was raised in a big family (4 kids), I have a big family (5 kids, 2 step-kids), and I can tell you that most means testing does a piss poor job of calculating things.
I suppose bitching about it won't do much good, but as a conservative leaning swing voter (no on Trump, yes on Romney), this issue is one that would drive me to vote Democrat.
I wish I was a majority among us swing voters, but I doubt I am.
I get the encourage people to do the work thing... I do. I believe work is essential to self-worth. I think that overly generous unemployment or welfare for adults is counter-productive... however
Children aren't their parents. Its not a child's fault for their parents decisions. As a society we have an obligation to take care of children, and ensure they have what they need to become productive members of society.
Furthermore, there is nothing more conservative than encouraging family.
Then again... this is just a rant among people who agree...
I'll give a dissenting viewpoint. The Democratic messaging for this is 'money for kids'. Who could possibly hate kids. The reality is it's money for adults, not kids, who have more kids than they can afford. I'm all for it if it goes into a fund the kid gets for college, video games or whatever, and not his mother or father.
Given American birthrates, families having more kids than they can afford (but being financially aided, so that they can now afford it) is a huge net good for the country.
A net bad from my perspective. Until mom and dad figure out how to support themselves and raise their kids, they shouldn't be having kids, and the kids they do have aren't likely to be contributors to society, nor will their kids be and their kids' kids.
I believe the argument is also that things like Social Security and other public spending rely on younger people existing and working and putting in more than they are taking out (Isn't Japan having problems with an aging workforce?)
If you personally have very large retirement savings then you're probably fine either way, but if we don't have enough kids to support the retired/non-working adults we have real problems.
Over the 18 years they are 'kids" paying $3,600 for 6 years and $3,000 for 12 years is $57,600.
The argument is that each additional child is worth more than that to the U.S. to have. If that's true, then it's worth spending on.
Now one place where maybe it fails is if that's true on the margin, but many of those people would have had kids _anyway_ then this incentive is unnecessary, and increasing kids by 10% here may not be worth providing the benefit to 100% of the kids - that is we're paying $570,000 / additional kid.
On the other hand, for kids in poverty, their prospects as adults are much worse, so raising them out of poverty may not be increasing their contributions from $0(non-existence) but still increases their contributions to society (even ignoring the value to THEM of improvements to their own lives)
The CTC is $10/kid/day (roughly). It's fungible so you can't prove it gets spent directly on the kid but that will definitely increase the standard of living of the family, which should benefit the kids - more stable living situation etc.
And even if you put it into a fund that "had to be spent on the kids", then the parents who WERE spending $10/day on the kid could pull that back out and it's effectively the same other way.
I disagree with the assertion that it's money for adults who have more kids than they can afford. To offer my personal anecdote, my wife and I are upper-range tax bracket earners and have 4 kids, and are just barely qualifying for the expanded ETC. We live in a very expensive area (I pay 3600 in rent to live in a 100 year-old house with enough bedrooms for everyone). So, it's not that I "can't afford" my kids, I totally can. But the extra tax credit is ABSOLUTELY going into investments for things like college.
You and your wife have obviously had more kids than you can afford and want me to fund your kids' college education fund. Times and economic circumstances change. My parents, born over 100 years ago, had 4 kids too, and it all worked out. We were fed and put through college without debt. My wife and I had kids in the 80's and 4 kids were out of the question, so we had two. Our son and daughter shared a bedroom so my wife and I could put them through college without debt while saving for our retirement. People should make whatever personal choices they want, but shouldn't expect others to bail them out from their bad choices.
How are you defining "more kids than can afford"? I'm not clear on that. I also don't want you to fund anything, I'm telling you how someone in my situation uses a tax credit and I think I'm fairly representative. Your comment said "I'm all for it if it goes into a fund the kid gets for college, video games or whatever, and not his mother or father."
I don't get this. People at pretty much all income levels are richer than they've ever been, yet somehow having kids is now too expensive? Were our parents monsters for having us when they were so poor?
People laugh when I brag about being a mediocre parent, but I'm not lying. I do very little for my kids. They aren't spoiled at all. So far they have all turned out pretty decent.
I have a USC sweatshirt that has been through four of my kids as a hand-me down.
You running for office anytime soon? All those Californians in Idaho these days might mix up the voter pool such that you could platform as, well, yourself.
2. An adventurous life with more than my fair share of "scandals" in my past that could come up.
But honestly, it might seem cocky, but I think I would make a good politician... (not candidate)... I'm fairly open to negotiation, not afraid to change my mind or be convinced, and have a realist view of the world.
Trump is a saint compared to some of my adventures.
It's why I disliked Trump based on his egotism and idiocy not his colorful personal history. (note: I am referring to the consensual rumors)
On a side note, I was really turned off by the slut shaming of Melania because of her past modeling career.
Honestly, I liked Melania much more than Michelle Obama. She seemed more genuine, even if she has terrible taste in men.
Actually, I feel sorry for a few of Trumps family (as far as you can feel sorry for rich people)... only his son struck me as a real asshole. I think Ivanka tried to make the best of it she could. Having a father like Trump has to suck.
I think we should strengthen the EITC (especially for single non-parents). THAT is the way to encourage work. How to phase out the CTC is 100% an insider political calculation of what is more popular, will contribute most to retaining control of the House and Senate.
I see the EITC as a superior form of a minimum wage. Or rather a minimum wage as an inferior EITC/wage subsidy paid for by a tax on wages whose incidence even if it falls mainly on firms and their customers (and not much on workers via unemployment/reduced hours) is still rather arbitrary. Why not tax everybody? And in a way ISN'T a CTC subsidized child care? It can be used for that (commercial or to a relative) or the parent can pay themselves to do the child care.
It was a bit of a tangent. :) Probably rather than opining (I already know what I think about EITC, I should have asked you about your skepticism. That way I risk learning something new. :)
1. if its meant to help poor people, it misses out on some deserving people. My daughter for instance. Full time student, single mother, two year community college getting straight A's living on scholarships, and has a work study job as well. Didn't qualify for ETIC. (or the original CTC). Maybe its not meant to help her... who knows.
2. If purpose is to encourage people to work, it seems like such a convoluted way of doing it. Like someone is... hey, let me work so I can get some extra money besides my salary, otherwise I won't work at all. It just seems like an indirect way to encourage work.
I am a pro-work and support yourself type. Not a bleeding heart or naive, so I do appreciate the goal. I guess the method just doesn't seem the most efficient.
You think that’s actually true vs. the extra $10 or $20 million you’d have at 80 if you didn’t have kids and invested the money instead? Certainly the care would be better.
"Another significant change will be in the number of seniors who have children. Those who have never been married are much less likely to have children than those who have been married at some point.3 As a result, seniors in the future will be more likely to be childless than those today (Table 1). In 2012, just 12 percent of 75-year-old women had no children. We project that by 2030, nearly 20 percent will be childless.4 Since we know that adult children often provide care for their senior parents, these projections suggest that alternative non-family sources of care will become more common in the future.5"
That’s actually not true. There quite a number of affluent retirees.
Do you want your kids changing your diaper? Or when you need skilled nursing will you go to a nursing home rather than burden your children with your care.
Not to mention how physical able your 60 year old kids will be to help you getting to the toilet when you’re 90.
In my (very limited) experience, the most important thing affluent people with aging parents need to do isn't personally change their diapers, but handle all the logistics/decision-making/emotional support/etc. around who will change their diapers (plus a million other medical issues). I haven't done it myself, but it looks like quite a lot of work. More if you don't have siblings to share the burden with, still more if you're also responsible for your childless aunts and uncles...
I'm a little confused by this tread to tell the truth. I probably have a blind-spot, but its very hard for me to empathize with non-kid having arguments.
Honestly, not having kids makes someone a genetic dead end. Maybe my reproductive drive is too strong for me to see it any other way.
People who choose not to have kids strike me as sad. They are either selfish, narcissistic, or undesirable as mates.
What strikes me is how little difference there is between means testing with a threshold of $150k and no means testing at all. It doesn't really make any sense on paper to introduce a means test to withhold benefits from ~10% of the population and introduce an administrative burden for the eligible 90%, and the public seems to agree.
I don't see why Democrats feel such an intense need to pass everything on the list this year. Rather than cut all of their reconciliation items by 60% and half ass everything, wouldn't it be better to pick a priority (climate change? anti-poverty? seniors?) and put everything you want in there offset by a 25% corporate tax rate?
I just feel like that would be easier to message and better policy than whatever they are doing now. Presumably Democrats will win another election in the future, maybe even by better margins, and can then go back and do 2 year community college or whatever.
Passing stuff in an election year is really, really hard. And the filibuster forces you to put everything in a single bill instead of breaking things up.
I totally agree. The country is just too deeply and evenly split to believe it is ready to pass and accept this level of aggressive new policy. We can get as angry at Joe Manchin as we want but I suspect he's a helluva lot closer to MY's Post-It voter than we are.
Let's not be surprised that we can't get everything we dream of with our nanometer-wide majority. Let's get what's reasonable and work toward building a stronger majority. Politics is a long, unending game.
I think a lot of Dems are assuming they'll lose the House in '22 and won't have unified government control again for at least 6 years. I agree with you and would do just the CTC, negotiating prescription drugs and maybe one other item.
Tbh isn't this reconciliation stuff really only like half the Biden agenda? So I guess the hope is to pass this half now and then some more next year (before we lose the House and get stuck with a do-nothing presidency between then and 2024)
Yeah but it seems pretty clear that Biden & Bernie were a little overambitious in their "agenda" the context of their slim majorities - I am operating under the assumption that they can't pass the $3.5 trillion bill and will have to cut somewhere. In that situation I'd rather they preserve a portion of the bill intact than cut across the board.
Unpopular/contrarian opinion- when emergency rooms are mandated by federal law to treat people regardless of insurance status or ability to pay- really no one is uninsured? If your income or assets are low enough, they're not going to bother to collect.
A guy I went to high school with crashed his car while messed up on All The Drugs- he's low income and uninsured. He racked up at least a $200k hospital bill while intubated for several days, where they were mandated to treat him, and ultimately ended up paying nothing as he has no assets. How..... how is that not insurance? If I had done the same thing it would've been vastly more expensive
I'm all for unpopular opinions but this one is too far for me. I think we have enough research to prove uninsured Americans have far worse health outcomes. There's a book out there sub-titled ... "Too little, too late". Emergency room care for catastrophic injury is just not good enough.
"I think we have enough research to prove uninsured Americans have far worse health outcomes"
Actually giving people coverage didn't improve health outcomes. They did a randomized study in Oregon
"This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services"
Because emergency care isn't the only type of care. Your high-school buddy wouldn't be covered for cancer treatment or any kind of regular checkups or screenings. Also he presumably had to declare bankruptcy to get out of that $200k, right?
Not my buddy, just an acquaintance. No, you don't have to declare bankruptcy- presumably the hospital understands it can't blood out of a stone (a repeat criminal with a spotty work history).
How about- all Americans have baseline catastrophic emergency room insurance, for essentially free? Would that be wrong to say?
Yes, it would. Having to face off with a hospital billing department is not "free"--it carries administrative costs, risks of medical bankruptcy, etc etc
What percent of the 30m are here illegally, though? It's gotta be sizeable (and yes that also means quite a few million citizens are uninsured, which is very bad)
The denominator bounces around across all these studies. That HHS study doesn't specify; it's just "U.S. residents". This KFF one says 23% of the uninsured are "non-citizens" so 21M US citizens would be the uninsured population. Skewed heavily by states that haven't expanded Medicare.
I don’t understand why the payments can’t just be universal initially, and then have them clawed back when you do your tax return if your above a certain income threshold. You could give people the option to “opt out” of receiving the payments in advance if they think it’s going to be clawed back anyway, which would be equivalent to just withholding 100%. Then if they ended up being eligible, it would flow through in their YE tax refund.
Shor is saying that if the payments are universal initially, that's less popular than if they're means-tested to $50k/year income. I think a clawback scheme would just complicate things for voters compared to "you get this benefit if you're poor or lower middle class".
Maybe, but it shifts the administrative burden on filling out paperwork from poorer people to people who make more if the default configuration is “you get this money” and then, conditionally, “if you make more you might have to give it back.”
I’m talking more specifically about the mechanics of payment. Instead of proving your eligible to start receiving payments, which causes administrative burdens and less than 100% take up from eligible populations, you just give it to everyone and claw it back from those who you deem “make too much” through the tax system. It just seems like a mechanically better way to do the means testing, administered entirely through an existing system. While marginal tax rates aren’t 100% at any point, we do mechanically the same thing with social security (government sends money out, then ask for different amounts back based on the recipients other taxable income)
Apart from my objection on principle to creating administrative burden for working-class people, I worry that a program means-tested such that middle-class people aren't eligible will be subject to lots of memorable stories about cheaters. Not even urban-legend-written-up-in-the-press stuff, so much as people getting the vague sense that a specific neighbor who has a nicer car than they "should", or a cousin who they've always thought is a bum, is getting the tax credit without deserving it. Then Republicans, or even Democrats, will respond to that popular anger by piling on the administrative burden instead of expanding the credit. I think that kind of thing is hard to poll effectively, because it's hard for people to predict how much they'll be swayed by emotion in a theoretical situation. I'll admit Republicans voting to expand the CTC for middle-class families in the tax cuts bill suggests they may break the right way even in this scenario, but my fear is if you have the cognitive dissonance of "this is for the needy, but people who I don't think are needy are getting it", it's a way easier jump to "let's make it harder to get" than to "maybe the less-needy should get it too".
So, you’ve convinced me a means tested CTC is more popular right now. However, it may be the case that a universal (or closer to universal) CTC will be more popular in the long run after it is enacted.
As middle class people start receiving the credit, seeing its benefits, and taking it for granted, I think the politics might shift and make it more popular than it polls right now. Even those without minor children will see how it benefits friends and family with minor children, and they too would become lore supportive.
Plus, I think a broader program will be much more politically difficult for Republicans to repeal, because more people will be so materially invested in it that they’ll be willing to change their vote over this issue alone. Whereas, even if a highly mean tested CTC is Kyle popular, it will not have a huge constituency who will fight for it to that extent: fewer people will benefit from it and the beneficiaries will be the poor, who are politically disorganized and not viewed sympathetically by GOP politicians.
Democrats want to cut the number of dollars spent on this program to fit some target. They can either do it by limiting it in years, or by means testing it. Currently they plan on a short time limit and a high means test. A long time limit and a low means test would hit the same price target. There is a strong argument that a long time limit is better, because it makes the program hard to cancel, rather than let expire. The lower means test also happens to make it more popular, rather than less popular.
If you’re right that the program becomes more popular once it’s in effect, then maybe the means test can be raised later. But it’s better to have that debate than to start with the high means test and then have the debate about letting it expire (which can happen just because no agreement is reached).
There seems to be a balance between getting enough of the population enjoying the benefit AND for long enough to feel like losing it would be outrageous. Want to make sure you thread the needle for both of those. Means test to strictly and you don't get enough people. Don't get in place long enough and people will think it was just part of the covid stimulus and not a long term thing.
Yeah, I think that this gets at a key consideration- visibility to voters.
It's true that a short program with no means test is actuarily identical to a long program with a low means test threshold, but if your theory of enactment is that people will see the program benefits and push to extend them (or get angry about ending them) there is obviously a premium on making sure as many people get the benefits in hand as as possible.
The key problem with Shor's argument is that he assumes that the CTC is abstractly great and that the key problem is preventing Republicans from stripping it away in the future. While I agree that the CTC is great, the thing that will keep the CTC around in the future is many people agreeing that it is in fact great, and not tea leaf reading about who might control congress in 4 years.
If the Republicans control congress in 4 years it's likely that they will try to eliminate a lot of programs, including but not limited to the CTC. At that time the only thing keeping the CTC in place will be the pain that Republicans think they will incur by getting rid of it.
I'm less certain Republicans won't act to save it in some form. The CTC seems like its the kind of spending that Republicans would actually get behind - especially if they can market it as really just a tax cut. Its probably more beneficial to their constituents and I suspect popular with them.
Not all support is created equal. Passion also matters. Supporting a policy has no electoral
importance unless it changes voting behavior. I strongly suspect that the effect on the voting behavior of parents who lose benefits to means testing would be stronger than the effect on non-parents who support sharper means testing. Increasing net support by 9 points is good, but if you really piss off 6% of the population while making 11% slightly more comfortable with the program, that isn’t really a win.
you double it when talking about net approval. if 11 people switch from opposition to support that nets 22. if 6 switch from support to opposition that nets -12. that nets to +10. i couldn’t get to 9 without using fractions.
This kind of motivated reasoning is why democrats lose elections. We have a 50/50 issue where people losing benefits will clearly care more than everyone else.
What is the expected % of childless, cross-over voters that will even know what the CTC threshold is on election day?
What is the expected % of parents who lose CTC that will know what the threshold is?
Is it as widespread as people think? Also I find there’s a lot of confusion about what it actually is… for example my company has an “affirmative action plan” but it’s focused on recruiting and development, not race-based hiring.
Yeah there's a big difference between "We attend women/minority-in-tech conferences and solicit resumes and talk about our company" and "We have explicit quotas".
My impression is the use of race in college admissions is very widespread. I think it’s also widespread in government hiring but not private sector hiring?
"affirmative action" in people's minds is like, race quotas and stuff. People don't like that. I think generally when there's an actual "affirmative action" policy in real life they tend to be less drastic than that.
Back in 2003 the Supreme Court held that race can be a "plus factor" in college admissions (still kinda sus but whatever) but that quotas are no bueno.
I would love to know if there's a constituency for making it easier to access benefits under the guise of relieving administrative burden. Like, make CTC universal and have the gov't do your taxes for you to make life a little easier and less cumbersome
People usually blame Intuit (makers of TurboTax) lobbying for the complexity of filing taxes in the US, though I've always wondered whether their lobbying can truly be that powerful.
Really simplifying the tax code would be wonderful, though I don't think that anyone is for that once you get into the details and it starts to be, "Cut this tax incentive."
I believe the USA could go the European-style "government calculates your taxes and sends you a statement" route without any major tax code simplification, and that's because *most* people's tax situation isn't all that complicated. I'd imagine plenty of Americans who realistically might not be able to take advantage of such a shift (that is, those with more complicated tax situations) wouldn't be able to avail themselves of the option in Sweden, either.
(I do support tax code simplification, though, as it happens.)
I don't blame Inuit (though I'm sure they have some influence). I blame Republicans who don't want anything to do with taxation to be pleasant or efficient.
As a general rule, when anti-government fanaticism and the opportunity for regulatory capture on an epic scale overlap, "both" is the correct answer when it comes to the GOP.
As a European who lives in the US, I strongly disagree. If I had to make a bet, I would even guess that the US has a simpler tax code. Therefore, I think there is zero reason (other than wanting to make life miserable for people) to not give everyone an exact copy of TurboTax through irs.gov, where all the fields that the government already knows about (wages, home ownership, kids etc) are already pre-populated. The government probably knows already about whether you qualify for that weird loophole and is automatically checking whether you qualify once you file (or, otherwise, invites huge fraud).
They do. If you ever download a tax transcript you see that they literally check the values you provide and your math immediately and automatically against the numbers they have and to double-check you didn't transpose a digit.
Now, if you own a business and they only have access to half of your input values, then yes, complexity increases, but that describes relative few people. For the vast majority of households the IRS internal process would provide correct values instantly at no expense of time or effort, and the vast majority of the rest would just be punching in a few additional numbers. (business expenses to offset 1099 income, for example).
The process should consist of the IRS prefilling all relevant forms and making them available for download, followed by a checkbox: correct or not correct? Selecting "not correct" leads you to be able to replace or append values and submit online with any evidence needed; selecting "correct" puts a check in the mail.
The lack of "end of year filing" isn't a function of tax code complexity as such. Rather, what it means is that the tax authority in question has figured out your tax burden in detail for you, so you, the taxpayer, don't have to do the paperwork. (But the underlying tax code could be plenty complex, and in Western countries generally is!)
The US Congress – in the same manner as the parliaments of various European states have done — could enact legislation directing its own tax authority (IRS) to do follow this practice, but has declined for whatever reason to do so.
Yeah - when I say simplify, I mostly mean simplify for the taxpayer. So just pre-filling a form would solve that.
As a second order, I would love to convert tax credits to direct payment and frame it as simplicity bit that's mostly b/c I'm a big fan of direct payments generally
I guess it depends, but do you mean that you didn't have to file anything or just that you didn't have to spend an ungodly amount of time filling? My experience is that filing in the US is terribly complex (unlike back home, where it's quick and easy for most individuals), but I don't think that the underlying tax code is more complex than the European ones. If anything, given how much better the US seems to be in business, I would bet that the US tax code is better than European ones.
It’s the top 10% who are able to massage their taxes to greatly reduce their tax burden. See, for example, all the discussion recently around whether or not people inheriting stocks must reset the value of the shares on the day they acquired them rather than the value of the shares on the day their parent/grandparent acquired them. The effect is that years of gains while the parent owned the stocks are erased and go untaxed. Dad bought Apple in the 80s but when Covid killed him and those millions of dollars worth of Apple stock became mine, I put my cost basis at $145. Retired at 35! Thanks dad! (Sadly not a real story, just an example of who wants to keep the tax code an arcane mess)
First: I think you're dramatically overestimating the number of people who are "able to massage their taxes to greatly reduce their tax burden." It's not the top 10%, it's mostly a fraction of the top 1%. The top 10% overwhelmingly get their income from ordinary wage income and have little ability to meaningfully reduce their taxes. $118k is top 10%.
Second: It's not the ultra-wealthy people with tax strategies that stop the tax code from being simplified. I mean, I'm sure they don't help, but they're few enough that even with their voices being amplified, nobody would worry too much about running over them. But what's happened is that we've created a million special carve-outs in the tax code that serve a small minority of people (outside of the very rich), but which is meaningful to each of those small minorities. So if there are 25 tax code exemptions, each of which serves like 0.5% to 3% of the population, then everyone says, "God, let's simplify this thing, it's horrendous," and everyone wants 24 tax code exemptions gone, but when you hit the one that they actually like, they're like, "whoah, whoah not that one!"
But it's all the special weird carve-outs that make taxes complicated to file, not the big top-line things.
(Sorry, $118k is old data. Top 10% is now more like $160k. Still overwhelmingly likely wage income, not investment income where you can play more tricks.)
Aw, she's just defending family farms. Maybe it's complicated by the fact we technically tax estates rather than inheritances, but I don't know why Democrats can't come up with some plan to raise inheritance taxes dramatically, but exempt family businesses, like farms, so long as the heirs are working full-time on running the business, to address that issue head-on.
Here's my disagreement: when my mother died 10 years ago she made me executor of her estate which consisted mostly of stocks and didn't add up to enough to let any of her heirs (my siblings) retire. A lot of them were the vestiges of her father's buying a 100 shares of AT&T in the 1930's, which then split into a gazillion Baby Bells in the 1980's. If I had had to figure out the tax basis of her estate, I would have just sent it all to the government and resigned the executorship to avoid the headache.
Sure, but there's alternative possibilities that we never consider exploring. How it actually works out is that the individuals inheriting the estate are responsible for figuring it all out, can't because 80 years of records may not exist. The burden on the individual is extreme and the result is a system where you just claim the cost basis is the day that you take possession of the asset reducing the taxes collected on the profits from that investment.
But what if there were records filed every year with the IRS by the banks or whoever is managing these investments? Why is it all incumbent on the individual who has every incentive to underreport capital gains to also faithfully report all of this? And the thing is, there are records of every sale of every share of every stock going back forever and if it were followed over time there would be no difficulty in evaluating the original cost basis and taxing the profits accordingly.
It shouldn't be on you to figure all this out. The IRS should know it and send you a bill.
Isn't it simpler and more fair set the basis at the current value on the day the heirs inherit it, and tax them for the inheritance based on the present day value? Who cares what a dead person paid for it 80 years ago. What matters is the value to the living person who's receiving it today.
The problem is with inheritance taxes not being high enough, it seems, rather than with basis accounting.
I agree with this. An estate tax (better yet an inheritance tax) is a simpler and fairer solution. I bet the IRS has no idea and no records of anything in my mother's estate. Sure you can research stock prices going back to whenever, but I doubt you can identify when my grandfather bought his hundred shares of AT&T, probably one at a time over a decade at the local five and dime. I'm sure they can't identify the cost basis of stuff in her estate pre-dating the Civil War.
Someone buys stock for $100 and then 80 years later passes it to me for $1000 when they die. We set the cost basis to $1000(for future capital gains) and tax me on inheriting $1000? So if I sell immediately it's the same as if I got $1000 in cold hard cash?
That would certainly simplify things.
Although, having it complicated to try and figure out tax on stock if I sell it after 80 years WITHOUT passing it on to heirs isn't fun either.
Cost basis is collected by whichever broker you use to make a purchase and reported to the IRS on your year end tax forms. That started in the late oughts I think.
Everything in my mother's estate was pre-oughts, and a lot in my own brokerage account. When family wealth has been generated and passed on for generations, the notion of taxes based on a reporting system starting yesterday is delusional. The one constant in my experience is the tax law changes every 3-5 years, almost always to the benefit of billionaires.
Yeah but I wonder if you could do simplification by turning tax incentives into direct payments. It seems like Americans don't love direct payments, like getting benefits, and do like simplification. If you do a trade of simplification for checks under the guise of "simplifying gov't and reducing administrative burden", is that popular or no?
First, there is the principle of solidarity. The child tax credit needs to support and strengthen the idea that we are all in a community together, that all our children are important. Means-testing works against that. It sends the idea that children with well-off parents don’t really belong to the community, that they aren't worthy of help. Even if the credit is mostly taxed away, even if it’s worth only a few thousand dollars, it’s very important that the credit be universal for all children. I would happily see the Walton grandchildren get child tax credits just for that reason.
Second, the concentrated financial burden of raising children can be a strain even for well-off parents. Like Social Security, the child tax credit is inherently designed to redistribute funds between people in different phases of life. Older people help parents, who then grow into older people who help other parents. Parents put in a lot of work and care to ensure that there is a new generation to support older people. Social policy should give help and recognition for that.
This all goes beyond the (I would say, “narrow”) progressive goal of “ending childhood poverty” but has much broader benefits and strengthens our society up and down the scale, whereas the means-tested version almost certainly will do the opposite.
>>Democrats’ $3.5 trillion reconciliation proposal is almost certainly going to shrink — and possibly shrink a lot<<
At this point, such a sentence to my ears sounds positively optimistic. So, do Bazelon/Shor believe a (smaller) reconciliation bill actually will get to Biden's desk?
I also wonder about the prospects for the beefed up ACA credits provision. That's one I'd like to see survive.
Unless you somehow get sinema to change her vote, it seems like this is all just talk. Or Joe isn’t the Democratic Party and you guys had no intention of doing anything he said. Zero tax increases with big spending is the plan?
Heck, if it wasn’t for trump, we wouldn’t have gotten any stimulus, Dems wouldn’t have won the senate, and you guys could still be pretending that it’s republicans at fault.
But it’s like Trump. You have to get the politicians telling the right lies. That’s the first step.
This is Republican lite strategy. Some shitty welfare programs that nobody supports. I voted for an economic progressive that campaigned on creating popular programs in line with FDR and LBJ.
That's like saying if only McCain had supported Repeal and Replace, then it would have passed. There were somewhere around 40 other Republican Senators that would have stepped up and taken one for the team. It would have been truly a clusterfuck of epic portions and they all knew it. McCain was just the guy with terminal cancer so he had to give the thumbs down.
I'd say at least 10 Democratic Senators would have stepped up to prevent tax increases for the rich. Biden's platform was designed to be popular because Dems felt Biden had to beat Trump. Pretty clear that a bunch are economic conservatives. That's the fact that explains all their economic decisions, like Geithner as Obama's treasury secretary. Their decisions are bizarre unless you admit this one truth.
I think you're blaming the person describing reality, rather than blaming the American public for being largely stingy and a little cruel when it comes to welfare expansion
I think Arizona voters agreed that Biden had a good economic plan. That’s why they voted for him and her. That’s why I voted for Biden,
Warnick and Ossoff. The problem here doesn’t seem to be a problem with the American people but rather deception by our elected officials. That’s not Shor or Matt’s fault. The charts are very unclear. That’s shor’s fault but it allows him to drive the narrative more effectively.
The good news is that the average American does not give a damn about the nuts and bolts of policy.
If, in October '22, COVID can safely be ignored in 90% of the US and by 90% of its people, the supply chain kinks are mostly worked out, air travel abroad is relatively free and straightforward, and people are mostly back to work, then the Democrats can claim credit for all of that and run on it in the mid-terms. The bipartisan bill and a smaller-than-3.5 trillion reconciliation bill will be secondary considerations.
That may give them the chance to do better in '23. If we're lucky.
That might be true but it's reasonable to rely on polling to determine what people want. I definitely think typical issue polling is deceptive, as Shor says here, and it makes sense to test it against partisan messaging.
I support the Child Tax Credit.
I do not support means testing, and especially don't support it at the 50K level.
Perhaps 50K per child.
I was raised in a big family (4 kids), I have a big family (5 kids, 2 step-kids), and I can tell you that most means testing does a piss poor job of calculating things.
I suppose bitching about it won't do much good, but as a conservative leaning swing voter (no on Trump, yes on Romney), this issue is one that would drive me to vote Democrat.
I wish I was a majority among us swing voters, but I doubt I am.
I get the encourage people to do the work thing... I do. I believe work is essential to self-worth. I think that overly generous unemployment or welfare for adults is counter-productive... however
Children aren't their parents. Its not a child's fault for their parents decisions. As a society we have an obligation to take care of children, and ensure they have what they need to become productive members of society.
Furthermore, there is nothing more conservative than encouraging family.
Then again... this is just a rant among people who agree...
I'll give a dissenting viewpoint. The Democratic messaging for this is 'money for kids'. Who could possibly hate kids. The reality is it's money for adults, not kids, who have more kids than they can afford. I'm all for it if it goes into a fund the kid gets for college, video games or whatever, and not his mother or father.
I would actually support a version of this, where 50% of the money goes into a fund to used for college, or given to the kid at the age of 25.
But, there is no perfect way to distribute money. The percent of bad actors having kids to get "government checks" is miniscule.
Kids in poverty... kids out of poverty. Simple as that.
Given American birthrates, families having more kids than they can afford (but being financially aided, so that they can now afford it) is a huge net good for the country.
A net bad from my perspective. Until mom and dad figure out how to support themselves and raise their kids, they shouldn't be having kids, and the kids they do have aren't likely to be contributors to society, nor will their kids be and their kids' kids.
When our birthrate is this low, every non-criminal/unemployed adult is a big net contributor to society.
Matt's theory of a billion Americans. I'm opposed, but fuck away and make kids, Don't see why I should pay for them.
I believe the argument is also that things like Social Security and other public spending rely on younger people existing and working and putting in more than they are taking out (Isn't Japan having problems with an aging workforce?)
If you personally have very large retirement savings then you're probably fine either way, but if we don't have enough kids to support the retired/non-working adults we have real problems.
Over the 18 years they are 'kids" paying $3,600 for 6 years and $3,000 for 12 years is $57,600.
The argument is that each additional child is worth more than that to the U.S. to have. If that's true, then it's worth spending on.
Now one place where maybe it fails is if that's true on the margin, but many of those people would have had kids _anyway_ then this incentive is unnecessary, and increasing kids by 10% here may not be worth providing the benefit to 100% of the kids - that is we're paying $570,000 / additional kid.
On the other hand, for kids in poverty, their prospects as adults are much worse, so raising them out of poverty may not be increasing their contributions from $0(non-existence) but still increases their contributions to society (even ignoring the value to THEM of improvements to their own lives)
The CTC is $10/kid/day (roughly). It's fungible so you can't prove it gets spent directly on the kid but that will definitely increase the standard of living of the family, which should benefit the kids - more stable living situation etc.
And even if you put it into a fund that "had to be spent on the kids", then the parents who WERE spending $10/day on the kid could pull that back out and it's effectively the same other way.
I disagree with the assertion that it's money for adults who have more kids than they can afford. To offer my personal anecdote, my wife and I are upper-range tax bracket earners and have 4 kids, and are just barely qualifying for the expanded ETC. We live in a very expensive area (I pay 3600 in rent to live in a 100 year-old house with enough bedrooms for everyone). So, it's not that I "can't afford" my kids, I totally can. But the extra tax credit is ABSOLUTELY going into investments for things like college.
You and your wife have obviously had more kids than you can afford and want me to fund your kids' college education fund. Times and economic circumstances change. My parents, born over 100 years ago, had 4 kids too, and it all worked out. We were fed and put through college without debt. My wife and I had kids in the 80's and 4 kids were out of the question, so we had two. Our son and daughter shared a bedroom so my wife and I could put them through college without debt while saving for our retirement. People should make whatever personal choices they want, but shouldn't expect others to bail them out from their bad choices.
How are you defining "more kids than can afford"? I'm not clear on that. I also don't want you to fund anything, I'm telling you how someone in my situation uses a tax credit and I think I'm fairly representative. Your comment said "I'm all for it if it goes into a fund the kid gets for college, video games or whatever, and not his mother or father."
I don't get this. People at pretty much all income levels are richer than they've ever been, yet somehow having kids is now too expensive? Were our parents monsters for having us when they were so poor?
People laugh when I brag about being a mediocre parent, but I'm not lying. I do very little for my kids. They aren't spoiled at all. So far they have all turned out pretty decent.
I have a USC sweatshirt that has been through four of my kids as a hand-me down.
Used to be. But kids aren't as expensive as it seems to tell the truth.
You running for office anytime soon? All those Californians in Idaho these days might mix up the voter pool such that you could platform as, well, yourself.
I have considered getting into politics... but
1. I travel so much... just not practical
2. An adventurous life with more than my fair share of "scandals" in my past that could come up.
But honestly, it might seem cocky, but I think I would make a good politician... (not candidate)... I'm fairly open to negotiation, not afraid to change my mind or be convinced, and have a realist view of the world.
Oh well...
After Trump, not sure #2 ("adventurous life") is that much of a hurdle...
Trump is a saint compared to some of my adventures.
It's why I disliked Trump based on his egotism and idiocy not his colorful personal history. (note: I am referring to the consensual rumors)
On a side note, I was really turned off by the slut shaming of Melania because of her past modeling career.
Honestly, I liked Melania much more than Michelle Obama. She seemed more genuine, even if she has terrible taste in men.
Actually, I feel sorry for a few of Trumps family (as far as you can feel sorry for rich people)... only his son struck me as a real asshole. I think Ivanka tried to make the best of it she could. Having a father like Trump has to suck.
I think we should strengthen the EITC (especially for single non-parents). THAT is the way to encourage work. How to phase out the CTC is 100% an insider political calculation of what is more popular, will contribute most to retaining control of the House and Senate.
As an non-single parent, I disagree! Ok, maybe not. But I don't want to just encourage work, I want to encourage families, and discourage not-working.
I have issues with the EITC, but I am agnostic about it. I just don't think it is very effective at what it does.
I would rather support a higher minimum wage, subsidized child care, affordable health insurance.
Higher minimum wages increase unemployment, and make jobs go away if the value of that job is less than the minimum wage.
Better to have people working
Disagree. Some jobs should go away. Or the cost of the product should rise.
I’m more of a reasonable minimum wage guy anyway. 10-12 dollars. Perhaps adjusted for regions and cost of living.
I see the EITC as a superior form of a minimum wage. Or rather a minimum wage as an inferior EITC/wage subsidy paid for by a tax on wages whose incidence even if it falls mainly on firms and their customers (and not much on workers via unemployment/reduced hours) is still rather arbitrary. Why not tax everybody? And in a way ISN'T a CTC subsidized child care? It can be used for that (commercial or to a relative) or the parent can pay themselves to do the child care.
I'm going to be honest. I'm not smart enough to understand what you said. And not exactly sure what you are advocating for.
It was a bit of a tangent. :) Probably rather than opining (I already know what I think about EITC, I should have asked you about your skepticism. That way I risk learning something new. :)
My skepticism about the ETIC is...
1. if its meant to help poor people, it misses out on some deserving people. My daughter for instance. Full time student, single mother, two year community college getting straight A's living on scholarships, and has a work study job as well. Didn't qualify for ETIC. (or the original CTC). Maybe its not meant to help her... who knows.
2. If purpose is to encourage people to work, it seems like such a convoluted way of doing it. Like someone is... hey, let me work so I can get some extra money besides my salary, otherwise I won't work at all. It just seems like an indirect way to encourage work.
I am a pro-work and support yourself type. Not a bleeding heart or naive, so I do appreciate the goal. I guess the method just doesn't seem the most efficient.
Single people would rather just import people on the cheap. It’s not a bad idea in a lot of ways.
Single people are short sited.
At least I have a shot at being taken care of well and visited when I am old and infirmed. (four daughters increases the odds)
You think that’s actually true vs. the extra $10 or $20 million you’d have at 80 if you didn’t have kids and invested the money instead? Certainly the care would be better.
How many single old people do you know with 10 or 20 million?
People spend what they have.
And I guarantee that a millionaire old person with no kids at the age of 90 is jealous of the getting by 90 year old living with their kids.
And if you’re 70 and not 90 will your kids have the time to help you when raising their own kids? It’s quite a burden.
Hey dude... just saw this. Interesting.
"Another significant change will be in the number of seniors who have children. Those who have never been married are much less likely to have children than those who have been married at some point.3 As a result, seniors in the future will be more likely to be childless than those today (Table 1). In 2012, just 12 percent of 75-year-old women had no children. We project that by 2030, nearly 20 percent will be childless.4 Since we know that adult children often provide care for their senior parents, these projections suggest that alternative non-family sources of care will become more common in the future.5"
https://www.ppic.org/publication/planning-for-californias-growing-senior-population/
At 70, I will be enjoying my retirement. No need for help. Hell, I will be helping them with the grandkids.
Grandkids are actually the number reason to have kids anyway.
I just became a grandfather at 50. Im here in Argentina, and its my granddaughter I miss the most.
<I> People spend what they have.</I>
That’s actually not true. There quite a number of affluent retirees.
Do you want your kids changing your diaper? Or when you need skilled nursing will you go to a nursing home rather than burden your children with your care.
Not to mention how physical able your 60 year old kids will be to help you getting to the toilet when you’re 90.
In my (very limited) experience, the most important thing affluent people with aging parents need to do isn't personally change their diapers, but handle all the logistics/decision-making/emotional support/etc. around who will change their diapers (plus a million other medical issues). I haven't done it myself, but it looks like quite a lot of work. More if you don't have siblings to share the burden with, still more if you're also responsible for your childless aunts and uncles...
I'm a little confused by this tread to tell the truth. I probably have a blind-spot, but its very hard for me to empathize with non-kid having arguments.
Honestly, not having kids makes someone a genetic dead end. Maybe my reproductive drive is too strong for me to see it any other way.
People who choose not to have kids strike me as sad. They are either selfish, narcissistic, or undesirable as mates.
What's the point of life if not making more life.
Even if kids put parents in retirement home… they are more likely to monitor for adequate service compared to single patients who have no one.
Damn. I lost track. Are u with or without kids. What are u saving for?
10 or 20 million?
Also - I've seen care given by children and care given by institutions. They can both be bad, but generally only one is good.
There are a small subset of kids that abuse their older parents, but I'd rather be taken advantage of by my kids than by strangers.
Don't get old, is the obvious solution!
Die first
Ironically, kids will age you fast. Its a conundrum.
From experience, kid (singular) also has that effect.
Four girls would kill me at 40. One will just kill me at 75.
so... and studies show this. each kid gets harder until Number 3. After Number 3, it actually gets easier.
There was a freakanomics podcast talking about this, and car seats, and mini-vans.
My girls are easy to tell the truth. My son has been the stressful one.
*sighted
I've just been shor-pilled.
Slow Shoring
What strikes me is how little difference there is between means testing with a threshold of $150k and no means testing at all. It doesn't really make any sense on paper to introduce a means test to withhold benefits from ~10% of the population and introduce an administrative burden for the eligible 90%, and the public seems to agree.
I don't see why Democrats feel such an intense need to pass everything on the list this year. Rather than cut all of their reconciliation items by 60% and half ass everything, wouldn't it be better to pick a priority (climate change? anti-poverty? seniors?) and put everything you want in there offset by a 25% corporate tax rate?
I just feel like that would be easier to message and better policy than whatever they are doing now. Presumably Democrats will win another election in the future, maybe even by better margins, and can then go back and do 2 year community college or whatever.
Passing stuff in an election year is really, really hard. And the filibuster forces you to put everything in a single bill instead of breaking things up.
"Don’t half-ass two things. Whole-ass one thing."
I totally agree. The country is just too deeply and evenly split to believe it is ready to pass and accept this level of aggressive new policy. We can get as angry at Joe Manchin as we want but I suspect he's a helluva lot closer to MY's Post-It voter than we are.
Let's not be surprised that we can't get everything we dream of with our nanometer-wide majority. Let's get what's reasonable and work toward building a stronger majority. Politics is a long, unending game.
I think a lot of Dems are assuming they'll lose the House in '22 and won't have unified government control again for at least 6 years. I agree with you and would do just the CTC, negotiating prescription drugs and maybe one other item.
Tbh isn't this reconciliation stuff really only like half the Biden agenda? So I guess the hope is to pass this half now and then some more next year (before we lose the House and get stuck with a do-nothing presidency between then and 2024)
Yeah but it seems pretty clear that Biden & Bernie were a little overambitious in their "agenda" the context of their slim majorities - I am operating under the assumption that they can't pass the $3.5 trillion bill and will have to cut somewhere. In that situation I'd rather they preserve a portion of the bill intact than cut across the board.
This is the FY22 bill, no?
Last one was FY21, which was available only because the House stopped Trump from using/needing one in '20.
Just checked. Yeap. 30m still uninsured. Figured with how little this has been talked about it was solved.
https://aspe.hhs.gov/sites/default/files/private/pdf/265041/trends-in-the-us-uninsured.pdf
Unpopular/contrarian opinion- when emergency rooms are mandated by federal law to treat people regardless of insurance status or ability to pay- really no one is uninsured? If your income or assets are low enough, they're not going to bother to collect.
A guy I went to high school with crashed his car while messed up on All The Drugs- he's low income and uninsured. He racked up at least a $200k hospital bill while intubated for several days, where they were mandated to treat him, and ultimately ended up paying nothing as he has no assets. How..... how is that not insurance? If I had done the same thing it would've been vastly more expensive
I don't think they treat leukemia or whatnot in the ER.
I'm all for unpopular opinions but this one is too far for me. I think we have enough research to prove uninsured Americans have far worse health outcomes. There's a book out there sub-titled ... "Too little, too late". Emergency room care for catastrophic injury is just not good enough.
"I think we have enough research to prove uninsured Americans have far worse health outcomes"
Actually giving people coverage didn't improve health outcomes. They did a randomized study in Oregon
"This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services"
https://www.nejm.org/doi/full/10.1056/NEJMsa1212321
Because emergency care isn't the only type of care. Your high-school buddy wouldn't be covered for cancer treatment or any kind of regular checkups or screenings. Also he presumably had to declare bankruptcy to get out of that $200k, right?
Not my buddy, just an acquaintance. No, you don't have to declare bankruptcy- presumably the hospital understands it can't blood out of a stone (a repeat criminal with a spotty work history).
How about- all Americans have baseline catastrophic emergency room insurance, for essentially free? Would that be wrong to say?
Yes, it would. Having to face off with a hospital billing department is not "free"--it carries administrative costs, risks of medical bankruptcy, etc etc
What percent of the 30m are here illegally, though? It's gotta be sizeable (and yes that also means quite a few million citizens are uninsured, which is very bad)
The denominator bounces around across all these studies. That HHS study doesn't specify; it's just "U.S. residents". This KFF one says 23% of the uninsured are "non-citizens" so 21M US citizens would be the uninsured population. Skewed heavily by states that haven't expanded Medicare.
https://www.kff.org/racial-equity-and-health-policy/fact-sheet/health-coverage-of-immigrants/
Tbh the way Biden basically hasn't said a word about his public option plan since getting elected makes me think it's just not going to happen.
Infrastructure?
Just want to say I love the guest authored posts!
I don’t understand why the payments can’t just be universal initially, and then have them clawed back when you do your tax return if your above a certain income threshold. You could give people the option to “opt out” of receiving the payments in advance if they think it’s going to be clawed back anyway, which would be equivalent to just withholding 100%. Then if they ended up being eligible, it would flow through in their YE tax refund.
Shor is saying that if the payments are universal initially, that's less popular than if they're means-tested to $50k/year income. I think a clawback scheme would just complicate things for voters compared to "you get this benefit if you're poor or lower middle class".
Maybe, but "Great new benefit for families that's tax free for for those making less than X thousand bucks" doesn't seem all that complicated.
Maybe, but it shifts the administrative burden on filling out paperwork from poorer people to people who make more if the default configuration is “you get this money” and then, conditionally, “if you make more you might have to give it back.”
That is basically what it is now, it's just a question of what threshold covers it.
I’m talking more specifically about the mechanics of payment. Instead of proving your eligible to start receiving payments, which causes administrative burdens and less than 100% take up from eligible populations, you just give it to everyone and claw it back from those who you deem “make too much” through the tax system. It just seems like a mechanically better way to do the means testing, administered entirely through an existing system. While marginal tax rates aren’t 100% at any point, we do mechanically the same thing with social security (government sends money out, then ask for different amounts back based on the recipients other taxable income)
Apart from my objection on principle to creating administrative burden for working-class people, I worry that a program means-tested such that middle-class people aren't eligible will be subject to lots of memorable stories about cheaters. Not even urban-legend-written-up-in-the-press stuff, so much as people getting the vague sense that a specific neighbor who has a nicer car than they "should", or a cousin who they've always thought is a bum, is getting the tax credit without deserving it. Then Republicans, or even Democrats, will respond to that popular anger by piling on the administrative burden instead of expanding the credit. I think that kind of thing is hard to poll effectively, because it's hard for people to predict how much they'll be swayed by emotion in a theoretical situation. I'll admit Republicans voting to expand the CTC for middle-class families in the tax cuts bill suggests they may break the right way even in this scenario, but my fear is if you have the cognitive dissonance of "this is for the needy, but people who I don't think are needy are getting it", it's a way easier jump to "let's make it harder to get" than to "maybe the less-needy should get it too".
I find it very frustrating that Americans don't support more generous programs. We are out own worst enemy in so many ways.
More generous programs cost money. We have already promised WAY more in benefits than we have money.
So, you’ve convinced me a means tested CTC is more popular right now. However, it may be the case that a universal (or closer to universal) CTC will be more popular in the long run after it is enacted.
As middle class people start receiving the credit, seeing its benefits, and taking it for granted, I think the politics might shift and make it more popular than it polls right now. Even those without minor children will see how it benefits friends and family with minor children, and they too would become lore supportive.
Plus, I think a broader program will be much more politically difficult for Republicans to repeal, because more people will be so materially invested in it that they’ll be willing to change their vote over this issue alone. Whereas, even if a highly mean tested CTC is Kyle popular, it will not have a huge constituency who will fight for it to that extent: fewer people will benefit from it and the beneficiaries will be the poor, who are politically disorganized and not viewed sympathetically by GOP politicians.
I think the overall argument is like this:
Democrats want to cut the number of dollars spent on this program to fit some target. They can either do it by limiting it in years, or by means testing it. Currently they plan on a short time limit and a high means test. A long time limit and a low means test would hit the same price target. There is a strong argument that a long time limit is better, because it makes the program hard to cancel, rather than let expire. The lower means test also happens to make it more popular, rather than less popular.
If you’re right that the program becomes more popular once it’s in effect, then maybe the means test can be raised later. But it’s better to have that debate than to start with the high means test and then have the debate about letting it expire (which can happen just because no agreement is reached).
There seems to be a balance between getting enough of the population enjoying the benefit AND for long enough to feel like losing it would be outrageous. Want to make sure you thread the needle for both of those. Means test to strictly and you don't get enough people. Don't get in place long enough and people will think it was just part of the covid stimulus and not a long term thing.
Yeah, I think that this gets at a key consideration- visibility to voters.
It's true that a short program with no means test is actuarily identical to a long program with a low means test threshold, but if your theory of enactment is that people will see the program benefits and push to extend them (or get angry about ending them) there is obviously a premium on making sure as many people get the benefits in hand as as possible.
The key problem with Shor's argument is that he assumes that the CTC is abstractly great and that the key problem is preventing Republicans from stripping it away in the future. While I agree that the CTC is great, the thing that will keep the CTC around in the future is many people agreeing that it is in fact great, and not tea leaf reading about who might control congress in 4 years.
If the Republicans control congress in 4 years it's likely that they will try to eliminate a lot of programs, including but not limited to the CTC. At that time the only thing keeping the CTC in place will be the pain that Republicans think they will incur by getting rid of it.
I'm less certain Republicans won't act to save it in some form. The CTC seems like its the kind of spending that Republicans would actually get behind - especially if they can market it as really just a tax cut. Its probably more beneficial to their constituents and I suspect popular with them.
Ah, ignore the autocorrect errors, I did this from my phone.
Not all support is created equal. Passion also matters. Supporting a policy has no electoral
importance unless it changes voting behavior. I strongly suspect that the effect on the voting behavior of parents who lose benefits to means testing would be stronger than the effect on non-parents who support sharper means testing. Increasing net support by 9 points is good, but if you really piss off 6% of the population while making 11% slightly more comfortable with the program, that isn’t really a win.
Thank you. The people who support this care a hell of a lot more than the people who are against it.
11 - 6 isn't 9.
you double it when talking about net approval. if 11 people switch from opposition to support that nets 22. if 6 switch from support to opposition that nets -12. that nets to +10. i couldn’t get to 9 without using fractions.
Fair.
This kind of motivated reasoning is why democrats lose elections. We have a 50/50 issue where people losing benefits will clearly care more than everyone else.
What is the expected % of childless, cross-over voters that will even know what the CTC threshold is on election day?
What is the expected % of parents who lose CTC that will know what the threshold is?
How is affirmative action so widespread, given that it's so unpopular?
Is it as widespread as people think? Also I find there’s a lot of confusion about what it actually is… for example my company has an “affirmative action plan” but it’s focused on recruiting and development, not race-based hiring.
Yeah there's a big difference between "We attend women/minority-in-tech conferences and solicit resumes and talk about our company" and "We have explicit quotas".
The former is (AFAIK) widely supported.
My impression is the use of race in college admissions is very widespread. I think it’s also widespread in government hiring but not private sector hiring?
It was adopted in the 1960s/1970s when elite opinion was willing to ignore public opinion and now benefits from status quo bias.
Legislation from the bench
Elites like affirmative action.
"affirmative action" in people's minds is like, race quotas and stuff. People don't like that. I think generally when there's an actual "affirmative action" policy in real life they tend to be less drastic than that.
Back in 2003 the Supreme Court held that race can be a "plus factor" in college admissions (still kinda sus but whatever) but that quotas are no bueno.
Supermajorities oppose the use of race as a factor in admissions (example: https://www.google.com/amp/s/www.pewresearch.org/fact-tank/2019/02/25/most-americans-say-colleges-should-not-consider-race-or-ethnicity-in-admissions/%3Famp%3D1)
I would love to know if there's a constituency for making it easier to access benefits under the guise of relieving administrative burden. Like, make CTC universal and have the gov't do your taxes for you to make life a little easier and less cumbersome
People usually blame Intuit (makers of TurboTax) lobbying for the complexity of filing taxes in the US, though I've always wondered whether their lobbying can truly be that powerful.
Really simplifying the tax code would be wonderful, though I don't think that anyone is for that once you get into the details and it starts to be, "Cut this tax incentive."
I believe the USA could go the European-style "government calculates your taxes and sends you a statement" route without any major tax code simplification, and that's because *most* people's tax situation isn't all that complicated. I'd imagine plenty of Americans who realistically might not be able to take advantage of such a shift (that is, those with more complicated tax situations) wouldn't be able to avail themselves of the option in Sweden, either.
(I do support tax code simplification, though, as it happens.)
I don't blame Inuit (though I'm sure they have some influence). I blame Republicans who don't want anything to do with taxation to be pleasant or efficient.
erm, "Intuit" not "Inuit" (I definitely don't blame the latter!)
As a general rule, when anti-government fanaticism and the opportunity for regulatory capture on an epic scale overlap, "both" is the correct answer when it comes to the GOP.
I think Intuit helps give this bipartisan cover for complexity, by lobbying a few Democrats.
As a European who lives in the US, I strongly disagree. If I had to make a bet, I would even guess that the US has a simpler tax code. Therefore, I think there is zero reason (other than wanting to make life miserable for people) to not give everyone an exact copy of TurboTax through irs.gov, where all the fields that the government already knows about (wages, home ownership, kids etc) are already pre-populated. The government probably knows already about whether you qualify for that weird loophole and is automatically checking whether you qualify once you file (or, otherwise, invites huge fraud).
They do. If you ever download a tax transcript you see that they literally check the values you provide and your math immediately and automatically against the numbers they have and to double-check you didn't transpose a digit.
Now, if you own a business and they only have access to half of your input values, then yes, complexity increases, but that describes relative few people. For the vast majority of households the IRS internal process would provide correct values instantly at no expense of time or effort, and the vast majority of the rest would just be punching in a few additional numbers. (business expenses to offset 1099 income, for example).
The process should consist of the IRS prefilling all relevant forms and making them available for download, followed by a checkbox: correct or not correct? Selecting "not correct" leads you to be able to replace or append values and submit online with any evidence needed; selecting "correct" puts a check in the mail.
Could you elaborate? My experience in a Euro country was that there was no end-of-year-filing
The lack of "end of year filing" isn't a function of tax code complexity as such. Rather, what it means is that the tax authority in question has figured out your tax burden in detail for you, so you, the taxpayer, don't have to do the paperwork. (But the underlying tax code could be plenty complex, and in Western countries generally is!)
The US Congress – in the same manner as the parliaments of various European states have done — could enact legislation directing its own tax authority (IRS) to do follow this practice, but has declined for whatever reason to do so.
Yeah - when I say simplify, I mostly mean simplify for the taxpayer. So just pre-filling a form would solve that.
As a second order, I would love to convert tax credits to direct payment and frame it as simplicity bit that's mostly b/c I'm a big fan of direct payments generally
Re: second order — likewise
I guess it depends, but do you mean that you didn't have to file anything or just that you didn't have to spend an ungodly amount of time filling? My experience is that filing in the US is terribly complex (unlike back home, where it's quick and easy for most individuals), but I don't think that the underlying tax code is more complex than the European ones. If anything, given how much better the US seems to be in business, I would bet that the US tax code is better than European ones.
Altho obv every country is different but my understanding has always been that taxes in US are unusually complex
It’s the top 10% who are able to massage their taxes to greatly reduce their tax burden. See, for example, all the discussion recently around whether or not people inheriting stocks must reset the value of the shares on the day they acquired them rather than the value of the shares on the day their parent/grandparent acquired them. The effect is that years of gains while the parent owned the stocks are erased and go untaxed. Dad bought Apple in the 80s but when Covid killed him and those millions of dollars worth of Apple stock became mine, I put my cost basis at $145. Retired at 35! Thanks dad! (Sadly not a real story, just an example of who wants to keep the tax code an arcane mess)
I have several disagreements.
First: I think you're dramatically overestimating the number of people who are "able to massage their taxes to greatly reduce their tax burden." It's not the top 10%, it's mostly a fraction of the top 1%. The top 10% overwhelmingly get their income from ordinary wage income and have little ability to meaningfully reduce their taxes. $118k is top 10%.
Second: It's not the ultra-wealthy people with tax strategies that stop the tax code from being simplified. I mean, I'm sure they don't help, but they're few enough that even with their voices being amplified, nobody would worry too much about running over them. But what's happened is that we've created a million special carve-outs in the tax code that serve a small minority of people (outside of the very rich), but which is meaningful to each of those small minorities. So if there are 25 tax code exemptions, each of which serves like 0.5% to 3% of the population, then everyone says, "God, let's simplify this thing, it's horrendous," and everyone wants 24 tax code exemptions gone, but when you hit the one that they actually like, they're like, "whoah, whoah not that one!"
But it's all the special weird carve-outs that make taxes complicated to file, not the big top-line things.
(Sorry, $118k is old data. Top 10% is now more like $160k. Still overwhelmingly likely wage income, not investment income where you can play more tricks.)
Heidi Heitkamp is certainly earning her salary this fall.
Aw, she's just defending family farms. Maybe it's complicated by the fact we technically tax estates rather than inheritances, but I don't know why Democrats can't come up with some plan to raise inheritance taxes dramatically, but exempt family businesses, like farms, so long as the heirs are working full-time on running the business, to address that issue head-on.
Here's my disagreement: when my mother died 10 years ago she made me executor of her estate which consisted mostly of stocks and didn't add up to enough to let any of her heirs (my siblings) retire. A lot of them were the vestiges of her father's buying a 100 shares of AT&T in the 1930's, which then split into a gazillion Baby Bells in the 1980's. If I had had to figure out the tax basis of her estate, I would have just sent it all to the government and resigned the executorship to avoid the headache.
Sure, but there's alternative possibilities that we never consider exploring. How it actually works out is that the individuals inheriting the estate are responsible for figuring it all out, can't because 80 years of records may not exist. The burden on the individual is extreme and the result is a system where you just claim the cost basis is the day that you take possession of the asset reducing the taxes collected on the profits from that investment.
But what if there were records filed every year with the IRS by the banks or whoever is managing these investments? Why is it all incumbent on the individual who has every incentive to underreport capital gains to also faithfully report all of this? And the thing is, there are records of every sale of every share of every stock going back forever and if it were followed over time there would be no difficulty in evaluating the original cost basis and taxing the profits accordingly.
It shouldn't be on you to figure all this out. The IRS should know it and send you a bill.
Isn't it simpler and more fair set the basis at the current value on the day the heirs inherit it, and tax them for the inheritance based on the present day value? Who cares what a dead person paid for it 80 years ago. What matters is the value to the living person who's receiving it today.
The problem is with inheritance taxes not being high enough, it seems, rather than with basis accounting.
I agree with this. An estate tax (better yet an inheritance tax) is a simpler and fairer solution. I bet the IRS has no idea and no records of anything in my mother's estate. Sure you can research stock prices going back to whenever, but I doubt you can identify when my grandfather bought his hundred shares of AT&T, probably one at a time over a decade at the local five and dime. I'm sure they can't identify the cost basis of stuff in her estate pre-dating the Civil War.
Trying to make sure I understand you.
Someone buys stock for $100 and then 80 years later passes it to me for $1000 when they die. We set the cost basis to $1000(for future capital gains) and tax me on inheriting $1000? So if I sell immediately it's the same as if I got $1000 in cold hard cash?
That would certainly simplify things.
Although, having it complicated to try and figure out tax on stock if I sell it after 80 years WITHOUT passing it on to heirs isn't fun either.
Cost basis is collected by whichever broker you use to make a purchase and reported to the IRS on your year end tax forms. That started in the late oughts I think.
Everything in my mother's estate was pre-oughts, and a lot in my own brokerage account. When family wealth has been generated and passed on for generations, the notion of taxes based on a reporting system starting yesterday is delusional. The one constant in my experience is the tax law changes every 3-5 years, almost always to the benefit of billionaires.
Yeah but I wonder if you could do simplification by turning tax incentives into direct payments. It seems like Americans don't love direct payments, like getting benefits, and do like simplification. If you do a trade of simplification for checks under the guise of "simplifying gov't and reducing administrative burden", is that popular or no?
There are two problems with this argument.
First, there is the principle of solidarity. The child tax credit needs to support and strengthen the idea that we are all in a community together, that all our children are important. Means-testing works against that. It sends the idea that children with well-off parents don’t really belong to the community, that they aren't worthy of help. Even if the credit is mostly taxed away, even if it’s worth only a few thousand dollars, it’s very important that the credit be universal for all children. I would happily see the Walton grandchildren get child tax credits just for that reason.
Second, the concentrated financial burden of raising children can be a strain even for well-off parents. Like Social Security, the child tax credit is inherently designed to redistribute funds between people in different phases of life. Older people help parents, who then grow into older people who help other parents. Parents put in a lot of work and care to ensure that there is a new generation to support older people. Social policy should give help and recognition for that.
This all goes beyond the (I would say, “narrow”) progressive goal of “ending childhood poverty” but has much broader benefits and strengthens our society up and down the scale, whereas the means-tested version almost certainly will do the opposite.
>>Democrats’ $3.5 trillion reconciliation proposal is almost certainly going to shrink — and possibly shrink a lot<<
At this point, such a sentence to my ears sounds positively optimistic. So, do Bazelon/Shor believe a (smaller) reconciliation bill actually will get to Biden's desk?
I also wonder about the prospects for the beefed up ACA credits provision. That's one I'd like to see survive.
Unless you somehow get sinema to change her vote, it seems like this is all just talk. Or Joe isn’t the Democratic Party and you guys had no intention of doing anything he said. Zero tax increases with big spending is the plan?
Heck, if it wasn’t for trump, we wouldn’t have gotten any stimulus, Dems wouldn’t have won the senate, and you guys could still be pretending that it’s republicans at fault.
But it’s like Trump. You have to get the politicians telling the right lies. That’s the first step.
This is Republican lite strategy. Some shitty welfare programs that nobody supports. I voted for an economic progressive that campaigned on creating popular programs in line with FDR and LBJ.
I voted for FDR/LBJ style programs, too. And if Democrats had won one or two additional Senate races, that might well be what we'd be getting.
That's like saying if only McCain had supported Repeal and Replace, then it would have passed. There were somewhere around 40 other Republican Senators that would have stepped up and taken one for the team. It would have been truly a clusterfuck of epic portions and they all knew it. McCain was just the guy with terminal cancer so he had to give the thumbs down.
I'd say at least 10 Democratic Senators would have stepped up to prevent tax increases for the rich. Biden's platform was designed to be popular because Dems felt Biden had to beat Trump. Pretty clear that a bunch are economic conservatives. That's the fact that explains all their economic decisions, like Geithner as Obama's treasury secretary. Their decisions are bizarre unless you admit this one truth.
It’s smart of Matt to let guest posters present the bad ideas that he agrees with.
I think you're blaming the person describing reality, rather than blaming the American public for being largely stingy and a little cruel when it comes to welfare expansion
I think Arizona voters agreed that Biden had a good economic plan. That’s why they voted for him and her. That’s why I voted for Biden,
Warnick and Ossoff. The problem here doesn’t seem to be a problem with the American people but rather deception by our elected officials. That’s not Shor or Matt’s fault. The charts are very unclear. That’s shor’s fault but it allows him to drive the narrative more effectively.
The good news is that the average American does not give a damn about the nuts and bolts of policy.
If, in October '22, COVID can safely be ignored in 90% of the US and by 90% of its people, the supply chain kinks are mostly worked out, air travel abroad is relatively free and straightforward, and people are mostly back to work, then the Democrats can claim credit for all of that and run on it in the mid-terms. The bipartisan bill and a smaller-than-3.5 trillion reconciliation bill will be secondary considerations.
That may give them the chance to do better in '23. If we're lucky.
That might be true but it's reasonable to rely on polling to determine what people want. I definitely think typical issue polling is deceptive, as Shor says here, and it makes sense to test it against partisan messaging.
Yea, the polling clearly shows that Biden's agenda is popular. The votes also showed that.