Political Nutz

Observations on the pathetic state of American politics

Tax Cut Extension: A Lose, Lose, Lose for Retirees

So Mr. Obama has signed the “historic tax compromise.”  Seems like there’s something in it for everybody, right?  Well… not quite. 

Retired folks get nothing now and way less later.  Retirees living on fixed income from Social Security and personal savings get zero benefit (except for whatever small capital gains they may realize on investments).  It’s also clear that with the reduction in withholding for Social Security, Republicans are aiming at balancing the budget next year by taking a big bite out of Social Security and Medicare, their favorite targets. So while multi millionaire bankers, CEOs and Senators are wallowing in tens of thousands of dollars in tax breaks senior citizens, who had their savings accounts ravaged by the Great Recession, will have to get by on reduced Social Security benefits and higher medical costs.

Righties will argue that the continued 15% tax on dividends and capital gains is a major benefit to retired folks.  But they conveniently ignore the fact that fewer that half of U.S. families have any dividend/capital gains income at all.  No, those breaks work most for the super rich, not for the rest of us.

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