Free money includes Medicare, Medicaid, SNAP, Social Security, and more, discussed below.
Some may object to the term “free money” but the definition of Personal Current Transfer Receipts (PCTR) is “Payments to individuals for which no current services are performed, representing a component of personal income.”
I don’t want to get into a debate over “free” based on “current services”. Instead, let’s focus on the sustainability of the current path.
Personal Current Transfer Receipts Billions of Dollars Detail
PCTR as Percent of Personal Income
PCTR as a percent of PI is now 19.29 percent and rising.
Q: What if we adjust for inflation?
A: The numbers in billions change, but the percentages don’t. They are nearly identical.
Real vs Nominal Explanation
Medicare is indexed for inflation in several ways. The income thresholds for income-related monthly adjusted amounts (IRMAA) surcharges for Parts B and D premiums are adjusted annually for inflation. Additionally, certain payment rates for providers and other aspects of Medicare, such as Part D out-of-pocket caps, are also indexed for inflation.
Social Security benefits are indexed for inflation through a process called a Cost-of-Living Adjustment (COLA). This adjustment ensures that benefits keep pace with the rising cost of living.
Medicaid is indexed for inflation to a degree. Specifically, certain aspects of Medicaid, like the federal poverty level (FPL) used to determine eligibility, are updated annually for inflation. Additionally, the Affordable Care Act (ACA) expanded Medicaid eligibility to non-elderly adults with incomes up to 138% FPL, and the federal government provides 90% financing for this expansion.
Since benefits are indexed to inflation, there is no difference in the nominal vs real percentage numbers.
Demographics
Please consider 65…What It Means for You
The year 2025 marks a significant milestone in the United States. Why? Because a record number of people will reach the age of 65. On average about 11,400 Americans will turn 65 every day of the year 2025 a phenomenon referred to as Peak 65. This demographic shift, largely driven by the baby boomer generation, will have implications for retirement planning, healthcare, and the economy at large.
By 2025, approximately 73 million baby boomers will be 65 or older, making up more than a fifth of the U.S. population. This milestone represents not only an achievement in longevity but also a shift in how we think about aging, retirement, and more. As baby boomers reach retirement age in record numbers, many will be looking at new opportunities, while others may face unexpected hurdles.
Looking Ahead
Social Security payment are poised to skyrocket. Medicare will do the same.
There are fewer replacement workers and even less with skills. Those who support “deport them all” madness need to reconsider quickly.
Deportations or not, we are on a very unsustainable path with fewer workers with no wage guarantees who support more retirees with inflation-indexed benefits.
What’s Trump Doing?
As with Biden, and every preceding president, the answer is making it worse.
Trump is angry with Republicans for wanting to cut Medicaid. And Trump wants to make Social Security payments tax free.
And on the revenue side, the latest tax bill is a monstrosity. It’s expected to add $22 trillion to the national debt over the next 10 years.
Related Posts
May 22, 2025: The One Big, Irresponsible, Deficit-Increasing Bill Passes the House
Did anyone really think Republicans would be fiscally responsible?
Trump increased spending, increased deficits, decreased revenue, made the tax code more complex, made the tax code more unfair, raised taxes via tariffs (impacting small businesses and the lower income brackets the most), and finally he wants a ridiculous “Golden Dome” defense system that will cost trillions of dollars and is not even in this budget analysis.
May 25, 2025: What Should We Do to Get Government Spending Under Control?
That’s the question I was asked today. 12 Ideas.
May 28, 2025: Musk Slams Trump’s “Big Beautiful Bill” for Undoing the Work of DOGE
“I think a bill can be big or it could be beautiful. But I don’t know if it could be both.”
Gold Soars to Another New High, What’s the Message?
On May 6, I commented Gold Soars to Another New High, What’s the Message?
There are three messages. Do you see them?
Please click on the above link for details.
We are on an unsustainable path, and Trump is hell bent on making it worse with one big, ugly, and fiscally irresponsible bill.
As AI and robotics take over almost all future jobs, a guarantee income from the federal govt may be necessary as opposed to riots and/or revolution.
There will be no need for concepts like “income” or “money”. Everything will be free, within reason. That is, people will not be able to request their own super yacht, 787 private airplane 20k sqft home and other such unreasonable foolishness.
Ah, if only the money were truly free.
Sigh.
I agree we have problems. Imo before you cut the programs you should have some sort of solutions to the problems that are about to arise from the cuts. It might be cheaper and bester for the economy as a whole to leave things the way they are.
More people in the labor force equals lower wages. We live In a society where a 500 dollar medical bill will sink a good chunk of households. To that seems like lower wages are a problem
Are there jobs in the locations where these people are living.
Every thing is connected. It would be interesting to see how much of the economy is supported by that 19 percent. What happens to gdp when nurses and such get laid off/ people on ss cant pay bills.
Also hospitals cant refuse people. Er visits are likely to increase with more people getting free” er. Visits expect your health ins to go up.
Looking at the different components, it seems Social Security had an unusual bump in outlays. Everything else appears to be on the same previous trajectory.
“Musk Slams Trump’s “Big Beautiful Bill” for Undoing the Work of DOGE”
That’s why Trump has power and Musk can go back to blowing up rocket ships and pretending Cybertrucks are not ugly scrap metal on wheels. Feed the boomers and hands OFF entitlements… maybe a 3rd term IS in the cards for the Trumpenator.
he had 14 seasons of the apprentice. so why not 14 terms of TACO boy and his cult of rally goers. trump rallies are like the old dead shows. an experience. not just music show.
if you ain’t playing the evil empire for what you can get out of it, before she totally goes teats up, you are a fool. see every empire from romans to soviet union for examples. i love the free shit army.
When the tide goes out: I wonder how red staters will take it when the Medicaid cuts signify the closing of rural hospital infrastructure?
Does this mean the immigrants will return home unclogging our rural ERs?
Beverley Hills, that’s where I want to be … gimme, gimme … gimme, gimme, living in Beverley Hills …
“I will keep [Social Security] in a lockbox. The interest savings, I would put right back into it. That extends the life for 55 years.”
Re “Deportations or not, we are on a very unsustainable path with fewer workers with no wage guarantees who support more retirees with inflation-indexed benefits.”
On the contrary, try eroding workers’ wages as a share of GDP below the current historic lows, and see what happens.
If the workers don’t make enough to cover the inflation-indexed benefits, then in addition to unhappy workers, the benefits also don’t get paid, and the retirees are also unhappy.
At that point all the government officials lose their jobs.
So yes, the workers have implicit wage guarantees, because the government officials don’t want to lose their jobs.
Bank tellers are not needed cos of ATMs.
Taxi drivers are not needed cos of WAYMO.
Etc, etc.
More and more free money will be flowing in the future.
I think Europe is looking into just slicing big taxes off the US-based tech firms. Maybe they learned that from a certain POTUS who thinks his citizens are being shafted, true or not. So “beggar they neighbor” could trickle up, down, sideways and metastasize everywhere.
There are over 100 million people of working age in the USA who are not working. Now we know why. Not all of those 100 million who are not over Federal Retirement Age can work, but at least a third of them could if they were not getting free money.
To clarify, what I am saying here is that there are at least ten million people in this country who should be working, but are not working because they can draw from the dole. They are ok with spending months filling out paperwork to find the right exception/pathway to be enrolled, but not otherwise ok with work.
You know nothing.
@Pokercat,
This came out just today, proving my point:
Perhaps you’re the one who “knows nothing.”
Ever since I migrated here, I haven’t seen a penny from the government. On the contrary, I paid out of State tuition in the beginning, and my first fiancée was trying to convince me that “the groom pays for the wedding here in America“.
Maybe because I was always free-lance, a category mostly screwed in taxes, health insurance rates, etc.
FYI, Greece is more fair with free-lancers (much cheaper public and private insurance, no payroll tax), though you get screwed in other ways (energy cost, bad checks, small and unreliable market, impractical passive attitudes never aiming at solutions, Master Degrees fighting for a bank teller job, and the weather is good only for the tourists).
Too esoteric to worry about as no one is going to make any changes to these definitions..
But patience Grasshopper. Once AI/robots take over government and all the work humans presently do, everything will be free. The concept of money will be an anarchism.
In good humor, I think you meant anachronism, but I like the idea of banned money as an “anarchism.”
Oops! You are correct.
Meanwhile I’m paying into the SS/Medicare system while Trump and his minions use that money to cut taxes for billionaires like himself and Elon Musk. Disgusting.
I have to say, SS certainly didn’t feel free when I involuntarily paid into it for 38 years.
Agree. Mish says he doesn’t want to get into a debate over “free” based on “current services” but then wants to conclude that we are on an unsustainable path in part because of SS payments. Which are in some part just monies someone is getting back after paying in for decades. Which doesn’t fit the definition of free whether based on current services or not.
Explain again how my 50 years of payments to SS amount to “I did nothing.” Ditto with 10yrs Medicare payments?
Medicare is not free. Besides prepaying for years almost $200 per person is taken from SS payments plus most people pay an additional supplemental insurance to cover the 20% Medicare does not cover. So added up “free” Medicare coverage costs my wife and I about $800 per month combined. Medicare advantage is a scam and mostly worthless if you actually get a serious illness. So please stop with the “free” bullshit.
Saved by Medicaid: New Evidence on Health Insurance and Mortality from the Universe of Low-Income Adults
https://www.nber.org/papers/w33719
The present increased demands for credit are the result of the irresponsible fiscal practices of the Federal government. The funds being borrowed do not increase our productive capacity, nor increase the efficiency of the work force. Rather public sector funds are used largely to finance transfer payments to nonproductive recipients, and to finance “dead weight” military hardware.
If the deficits represented by the deficits are spent on projects which increase productivity and reduce waste, the deficits are beneficial no, matter how financed. However, debt incurred to finance transfer payments (interest, pensions, etc.) is of dubious quality. Any enterprise, private or public, is in dire straits if it has borrowed in order to make such payments.
Keep The Party Going!
How many boomers were double-vaxxed and triple-boosted? Problem solved.
Unfortunately, auto-pen Biden was not a boomer, nor was Reagan, Carter, Ford, Tricky Dick or Bush 1. However Bimbo Bill was the first draft dodging boomer president with numerous bimbo eruptions, depending, of course, upon what the meaning of “is”—free sex—is for a boomer bimbo. Ditto for boomer Barack. .
the so called greatest generation got great benefits like GI bill……….by the men who fought ww1 and spanish amerikan war. the greatest generation sent their sons generation to Nam and Korea………and screwed them with dumb wars and shit benefits……….then the boomers did the same to the now younger generation. amerikans are assholes. only known democratic war mongering imperial power in world history. we vote for all the wars and nasty stuff. maybe a dictatorship would be better. someone like the late great pee wee hermann.
Just about every single one I know. They’re all still kicking and living the good life.
Yet 27.6% of seniors say they are disabled.
https://www.consumeraffairs.com/news/the-united-states-of-disability-1-in-4-americans-identify-as-disabled-081524.html
mostly just grifting the system. i know scores of so called disabled construction and veterans that just hose the system……….
I know scores of blue collar Americans destroyed by overwork and brutal employers. Insomnia from stress can actually be disabling. A studio Teamster I know was driven to a mental breakdown by ungodly hours and workplace harassment. A postal worker I know was driven to a breakdown by Kaiser Permanente with a broken ankle after 21 years on the job that Kaiser refused to classify as an on-the-job injury, denying his workmans comp. But you know what you really want is half the population to disappear and most of the rest (except you and your besties) to return to affordable slavery.
Data indicate the working-age demographic getting hit harder in recent years. Even if some sources put blame elsewhere the trend is acknowledged. Problem exacerbated.
https://www.pbs.org/newshour/show/why-mortality-for-young-americans-is-increasing-at-an-alarming-rate
I am one such person and will race you any minute up any hill or mountain/trail you designate, any daytime temp.
Just check the obituary pages in the hometown newspaper of the Villages, Florida’s premier retirement community and you’ll see the results of the fear mongering vaccine pushers. All countries were broke before the COVID scamdemic was implemented and used the vaccine mandates so that useless eaters would take the jab and be permanently removed from government dole, thereby reducing every countries debt load. Notice how coordinated the media effort and vaccine incentives
were by each country’s leaders and bureaucrats. All by design, so they wouldn’t
have to payout for all the SS and Medicare you paid in.
This problem cannot be fixed without a serious crisis-level realignment or -regrettably- war. Once you go down these redistribution schemes how do you get out of them? Human nature is what it is and I’m not one of those people that try to shame people for looking out for their own self interest. Even people who are theoretically against these things on principle are going to look at any cuts with the perspective of “I’ve been paying my SS tax – why should I get left out in the cold while previous generations got the benefits” and they would be right. Any politician that runs on fixing this will never win an election. Any politician that gets in and begins trying to fix this will be a one termer. Public policy should be crafted in a way that accounts for a collective group of people each acting in their own self-interest. One critical factor that is desperately needed is to severely curtail the ability of governments at all levels to levy taxes, fees and other forms of collective theft. People should be educated about this from the time they are young. Unfortunately the system is woefully corrupt -perhaps irretrievably so.
The problem isn’t taxes. The problem is issuing debt because you want to spend more than you take in. Force a balanced budget amendment and all of these issues will come to a head. Republicans could never again cut taxes without cutting spending. And Democrats could never again raise spending without raising taxes.
from ZH
If Senator Rand Paul votes against our Great, Big, Beautiful Bill, he is voting for, along with the Radical Left Democrats, a 68% Tax Increase and, perhaps even more importantly, a first time ever default on U.S. Debt,” Trump wrote on Truth social Saturday afternoon.
“Rand will be playing right into the hands of the Democrats, and the GREAT people of Kentucky will never forgive him! The GROWTH we are experiencing, plus some cost cutting later on, will solve ALL problems. America will be greater than ever before!”
====
jesus!!!
I live in Russia, so i dont pay any attention what Putin or any gov person/entity say form tv . IT IS ALL BULLSH11IT ANYWAY!!
it has been this way last 15 years at least!
===
BUT Trump takes the cake. !!! honestly! what a phony.
does anybody really think anything will be diff in terms of debt/deficit /etc in 5 10 years? of course it will be much much bigger. and worse
====
yeah, it seems Trump fixed the border more or less. but other than that what are positives? it is all bullshi11t and gaslightning !
and of course Mr Paul is piker. I like his dad . not him!!
alx
I don’t know the fed just bumped up growth to 4.8 % for second quarter maybe Trumps on to something . I know if we start getting good numbers there will be some major hand ringing on this blog .
“When the people find that they can vote themselves money that will herald the end of the republic.” — Benjamin Franklin
The problem is the people. No one who runs on government being fiscal responsible has a chance to get elected that is the truth . It has been that way for decades . If Trump or Biden said that hard choices had to be made and benefits cut that would be the end of that candidate .The representatives the same . The people would rather be told a lie than the truth been that way for a long while .
You are right. In fact, taxes have to be dramatically raised. And no American is patriotic enough to actually pay a nickel more.
It’s not patriotism to pay taxes for a debt that unpatriotic a-holes in the legislative and executive branches racked up over centuries. It’s bootlicking. And that’s leaving aside the hidden tax called inflation we’ve all paid since we left a gold standard in the 1930s. Patriotism would entail repudiating the debt and defaulting on it.
There was always a tension between the interests of the royalty/oligarchy and the “mob.” Both want to vote themselves prosperity (or otherwise finagle it for themselves by whatever means). This is merely one facet of it. The Founders knew this very well — it was core to their debates. But like Adam Smith, I think they expected better from individuals than what they/we got, from the very start. The 1790’s look an awful lot like this decade.
80s in USSR, too and countless examples
It is mind boggling to me that we index social security to inflation but don’t do the same for minimum federal wage laws. Federal minimum wage is still $7.25/hr with the last change on July 24 2009. Using the BLS own inflation calculator, min. wage should be $10.80 right now.
This change alone would help with the imbalance but for some reason never happens. But it’s all futile now anyway, the whole thing will crash around 2032 or so without radical reform and cuts.
The federal minimum wage is mostly irrelevant. Even Arkansas’ minimum wage is $11. Alabama, South Carolina, Tennessee, Louisiana and Mississippi are the only states without their own minimum wage.
AI says: “The starting wage for a Crew Member at McDonald’s in Alabama generally ranges from $10 to $15 per hour, according to Indeed and ZipRecruiter. Some McDonald’s locations in Alabama may offer higher starting wages, with some reaching $15 per hour.”
add utah to that list $7.25
$20 in CA! Plus benefits.
Then there should be no concern about raising the federal minimum wage.
Not sure Federal minimum wage actually matters. It should be scrapped anyway and left to individual states to decide as many States have done already.
Besides, do you know anyone making minimum wage? I don’t and that includes my teenage daughter at her summer job (making 14/hr at a water park). Businesses pay a wage to attract a worker. If they don’t pay enough they don’t get workers. It’s not like 100 years ago when if you didn’t work you could starve (no social net) because these days you just go on government benefits (SNAP, Welfare etc).
Finally even if you start at minimum wage you should be getting yearly increases of 3% even if you are brain dead so you won’t be at min wage for long.
Working people are basically punished for working. You have to stop being productive and be born rich if you want those sweet tax breaks.
poppycock. i know scores of working men who were laborers or plumbers…….and became small time landlords with one to 10 properties and didn’t pay taxes…….due to being in the correct asset class. r/e landlording and development.
It is true that taxation was shifted from capital to labor under Reagan. The highest rate 70% was cut, if memory serves me to 29%, actually under that of a fully employed journeyman blue collar wage earner which was in the low 30s. They called it the Reagan Bubble I think, but don’t quote me.
Individuals who are at minimum wage skill level cannot contribute as much to the economy as they once did. So that means the economy gradually expects to subsidize them more and more, right? I mean, that’s what the math says to me.
Do away with the minimum wage by replacing it with a maximum wage of 12 times the lowest paid employee. CEO wants $2 million annual, lowest paid employee makes $166,666. Fair.
“Social Security benefits are indexed for inflation through a process called a Cost-of-Living Adjustment (COLA). This adjustment ensures that benefits keep pace with the rising cost of living.”
This adjustment ensures that benefits slightly increase with the rising cost of living.
Fixed it to reflect reality.
Note that the Medicare premium deducted from Social Security payouts always increases faster than the Government COLA.
It is ironic that the Senators and Congressmen that created this black hole cannot be sent to prison like Bernie Madoff.
Abortion is the problem. There are not enough young workers because many millions of lives were aborted since it became legal 50 years ago. So, now you want to blame Trump instead of the Dems who spearhead abortion. Abortion is the reason for the fiscal mess we are in.
Not at all.
It is Putin’s fault.
/s
Depends exactly who got murdered.
There is no evidence that the rate of abortions increased after Roe v Wade. My mother told me that abortion was very common prior to Roe v Wade, you just needed to know the right people, and most women would be happy to tell you and help you out. Like criminalizing drugs, making abortion illegal doesn’t change anything. You have to change hearts and minds, which, of course is a level of complexity that is just too hard for most.
Yeah, like all the clueless singles could add so much value to a modern economy if they became teen moms, right? I’d be interested in seeing the lively urban scene (and budget numbers) then. Maybe they could produce drone workers for Trump’s t-shirt factories, but I note Amazon is turning everything to robots as we speak.
The problem is we need post birth abortion after 21 years when we can see how the fetus turned out.
Trump doesn’t have the votes in the Senate to pass the BBB. A group of republicans will vote no. They want to break it up and do one bill that makes the 2017 tax cuts permanent, then do another bill to deal with the rest. They object to the “no tax on tips/overtime” because those provisions make the tax code even more complex. And unfair. Better to just raise the standard deduction so all low wage workers as well as retired folks, get a bigger tax break. What’s so special about tip earners? Lots of people work very hard and are just as deserving of the tax break.
Should be interesting to see what happens in the Senate.
The GOP knows Trump’s political capital is perishable, and he basically gets this one shot for whatever his wish is, and they must deliver tax cuts to their base. Everything else is secondary. They will complain but knuckle in and take one for the team. This bill will pass.
they are cowards and will fold, 100 percent guaranteed.
from Steve in MA. Phil already responded correctly about SS. Medicare premiums are taken from our SS checks each month, so that isn’t free either. It is subsidized to a degree. Welfare, medicaid, and SNAP (food) are social safety nets which surely have been abused by some, but which are the choice of the majority of citizens or Congress wouldn’t be able to maintain those laws for many decades as is the case. Social cohesion is value returned for the $s.
Every society is three meals away from chaos. – Lenin
And considering Lenin knew something about delivering massive chaos, he is worth listening to, on this.
romans knew it was 9 meals. or 3 days. IKE and lenin both copied the old roman adage, panem et circenses. you need the bread in every home every day. or else the empire is gone. 3 days.
A couple of thoughts:
1) We need to grow the working population to offset growing aging population so we really need to develop a sensible immigration policy that brings people here that can work and contribute to the SS deficit and grow our economy.
2) Think about how we pay for medical care. The current system does not work and yet a policy that says unless you work for an employer that provides healthcare, you cant get it makes no sense either. So somehow we need to find a way to offer health care to people. Healthy people are good for the country.
Point 1 is the ‘infinite growth’ fallacy. In other words if we have 60 million retirees and we need 3-1 workers then we need 180 million workers.. But then those 180 million retire we will need 540 million workers and when those retire we will need 1.6 billion workers and so on.
So we can’t keep growing the working population by importing more and more workers. At some point we have to find another way (working longer / machines doing more work or something else) so that population stabilizes while being able to take care of everyone.
Point 2 says we have to have a real conversation about medical care at end of life. For example someone getting a knee replacement at 65 is reasonable because they likely have 10-20 years of life left. But at 75, we should no longer be doing that. If they need one then, they or their family pays or they do without. That’s the incentive to work and save. It gets even worse when end-of-life care gets factored in and we spend insane amounts of money to prolong someone for another couple of months. Either they spend their own money or they go early.
Once the entire population of the Earth is here, we’ll have to start bringing in Martians.
Yup and even then that will only work for 1 lifetime and then we’ll need to bring Venusians + Jovians to cover Earthlings + Martians and on it goes.
Ponzi dynamics illustrated!
dinosaurs lasted 165million years, and went extinct about 65million years ago, except for the newer winged ones. humans have only been maybe 400thousand years. almost 100% chance another huge meteor hits within 500million years. wipe out all life. per my astronomy class about a decade ago. so don’t sweat the small stuff. get on the free shit army. like the CIA and pentagon and MICC do.
Love your honesty but can we raise the age for knee replacements to 80???
What you are saying is that we need to increase productivity among working people, pay them for that increased productivity, and collect higher SS taxes based upon that increased pay. A meritorious idea. The growth in productivity from 1980 to current has actually been enough to cover SS far into the future. Unfortunately, that growth in productivity did not accrue into the wages of those who pay into SS. It accrued into the hands of the investing class who used it to fuel economic growth in China and growth in the US stock market. So there is a structural problem in our system of wage growth.
Bringing in young immigrants to “fix” Social Security will only work if they themselves won’t ever get Social Security.
That was the de facto “system” we had before. But some guy had to go and break it.
nah. SS was only supposed to be insurance for outliving actuarial date of death. when i was born, 1960, SS was to be paid at 65. they increased it only 2 years. but life expectancy went from about 65 give or take. in today’s world, SS should not pay out until early 80s. if solvency is the goal. it’s insurance. not retirement. i did take mine early as i love the free shit army. the kids are paying for me to sit around and trade stocks.
I disagree with point 1. Steady state will eventually occur and the economy will have to adjust.
I’d even venture to say the world economy would be better off with fewer people.
Malthus suggested we will get to the “fewer people” thing, or at least closer to a steady state, if not a huge dip, one way or another. We can go nicely or we can go not nicely (as many animal and human sub-populations do, even now). An interesting author and blogger in that regard, with some unexpected angles on lots of things, is Ugo Bardi.
Growing the population where machines are going to take all their jobs only results in the need for greater government support!
Not to mention the erasure of all sorts of unbelievably interesting things and bio-forms, to just make — more — copies of — people.
Of which 50% are dumber than average to paraphrase George Carlin.
The future has to be some type of hybrid socialism there will be no other peaceable choice.
You don’t want to get into a debate about the semantics of the clickbait title “free money” because you know it’s not a fair characterization… as if workers don’t spend their entire lives paying into Social Security or medicare…
“Payments to individuals for which no current services are performed, representing a component of personal income.”
“Personal Current Transfer Receipts” – not “Free Money!” That’s your verbiage! You framed it as “free money” yourself.
The money sure wasn’t free for the 50 years you spend working and paying into it! But suddenly because you need the benefit, it’s free? Why would you perpetuate such a mischaracterization? Words matter.
This kind of framing of social benefits like Social Security and Medicare will be how the right wing plutocracy tries to rob Americans of benefits that they spent their whole lives paying into. You’re almost there recognizing what a disaster Trump’s bill is… more than anything, because this is the most stupid time possible to be cutting taxes on the wealthy! Here’s an interesting question…. how much would tax rates need to increase to close the US fiscal gap?
Cutting taxes on the wealthy ? doubt that happens . However for your info the top 1% pay nearly 43% of income tax top 5% pays 65% top 10% pays 75% bottom 90 percent pay about 25% so the top 1% pays nearly double the amount the bottom 90%. How much should the wealthy pay ? Also 2016 trumps first year tax revenues were 3.27 trillion but the same tax brackets the projected 2025 revenues are 5.5 trillion so revenues have increased by a hefty 2.2 trillion in 9 years that is around 70% increase .
The percentage people pay should be based upon the amount they have left over after some set median expenditure. So assume the median annual expenditure of a working age adult is $45k. If you make $50k, your basis for taxes is $5k. If you make $1 million, your basis for taxes would be $955k. So you should expect to pay 191 times as much as the guy making $50k, just to be fair. So if the guy making $50k pays $1000 in taxes, the guy making $1 million would pay $191,000 in taxes. The guy making $50k keeps $49k in his pocket, the guy making $1 million keeps $809k in his. In this case, the total tax receipts are $192k. The rich guy pays 99.5% of all income taxes, but still maintains 16.5 times the spending ability of the regular guy. A bargain when you consider how much more the rich guy gets out of society than the regular guy.
That is what is already happening . That is the point the bottom 50% pay almost no tax the top 1% pay 43% . The bottom 50% pay only 2.3% but make up half the population the top 1% only make up 1\100th of the population they already are paying 100s times more tax than the lower group .
As they should.
Please explain the need for one person to have a net worth of $2B or more, there isn’t one.
Take my upvote. 100% agree.
The reason we should have the social safety net programs is private charity is never enough.
No matter how good your situation is now, you could find yourself in need and charity would not be there to help you.
Take the simple example of food charities. They are a drop in the bucket with virtually all of the weight being carried by SNAP. If SNAP disappeared, the private food banks would be empty in a day.
I’m 80 and still working. My income taxes are more than I receive in SS and Medicare, so don’t say mine are “free”.
More than 41 million Americans get SNAP benefits
https://theconversation.com/gop-lawmakers-eye-snap-cuts-which-would-scale-back-benefits-that-help-low-income-people-buy-food-at-a-time-of-high-food-prices-208556
From your article link:
42 million is about 13% of the TOTAL population across the whole country. And then we have 20% of the children on SNAP. Whew.
This is crazy. People have children that they can’t afford to raise properly or feed w/o government handouts. Maybe they should REDUCE SNAP benefits as family sizes increases?
“Government Free Money Accounts for 19 Percent of All Personal Income”
Two thoughts: 1. Medicaid and Medicare aren’t “income”. 2. Why is 19 percent a bad thing? Is it too low or too high?
It’s saying that 20% of money spent by consumers is just government giveaways. That’s a huge number because it means the other 80% is paying for that (or if they aren’t it’s adding to the deficit).
I’d say that’s a number that’s too high.
Well, I think a bigger question is “is it worth it?”. What happens to the elderly if we eliminate Social Security? What happens to the poor if we eliminate welfare? How do those groups change their votes, or act in society? It’s not like suddenly everyone’s taxes go way down, they start buying more stuff and creating new jobs. Mostly rich folks and corporations would see lower taxes and invest more in the stock market making stock prices go up.
You can’t eliminate those things. I’ve said it before, if you do, those people will just steal to survive and jailing costs more than just giving it away (even if you could jail 10s of millions).
But you can and we should demand work of some kind especially for Welfare. Even older people can still do things (phone center type work since that can be done at home rather than outsource to India, work/help look after pre-school kids in daycare as grandparents once did). All of those are beneficial for society.
Hey, let’s marginally tax wealth hoarding billionaires at, oh, 90%, create a genuine jobs program to hire people the private sector won’t or can’t and maybe build non profit master planned communities for the unemployed and homeless who actually build them themselves and maybe put 8 million people to work! Oh, wait, FDR already did that.
convoluted ideas and math by mish. there is no such thing as a give away. nothing is free. just like there is no such thing as a trade deficit.
“…We are on an unsustainable path, and Trump is hell bent on making it worse with one big, ugly, and fiscally irresponsible bill.”
Shall we call it the BUFI bill?
Big Ugly Fiscally Unsustainable bill.
Good one! BUFU used to be slang for buggery; that’s what this bill will do to the American people.
medicaid budget under the proposed bill INCREASES. the “cuts” are in rate of increase. Sorry if math was not your strength. furthermore, there are a lot of individuals who get govt benefits who need to be removed. Another false statement that 8milliin or similar number is inflated and is ignored by individuals challenged by math and capable of basic analysis
There are a certain number on Medicaid who are illegals. There are a certain number who are using Medicaid in two different states. That will come off. Also, by imposing “work” requirements they know that a certain number of people in the “expansion” population will lose Medicaid because they will either refuse to work/volunteer or they will not fill out the forms correctly or on time. Still wonder how many or what % of “able bodied adults” listed as unemployed are in fact working already but off the books.