about taxes, who pays what and what is fair is dangerously misleading. The idea that the tax code is designed to benefit only the wealthy is not true.
In many respects the tax code and other federal laws are designed to benefit average Americans and to limit the benefits for higher income Americans. Here are a few examples.
- The tax- free growth and payment for life insurance policies
- Pension plans have caps that limit compensation that can be counted for benefits and funding
- 401k plans and IRAs and other retirement vehicles have limits on contributions based on pay and provide tax-deferred or tax free benefits to workers
- Employers can use IRC Section 125 plans to make employee premium contributions tax free
- The standard income tax deduction
- Refundable tax credits for child care
- Tax free income from employers who contribute toward health (and other) benefits
- Health savings accounts, flexible spending accounts, health reimbursement accounts all lowering taxes or generating tax free income
- The formula for Social Security benefits favors lower income earners
- Income based subsidies under Obamacare and other programs.
- IRMAA Medicare premiums require higher income earners to pay much higher share of the cost
- The $250,000/$500,000 exclusion on the profit from home sale
- The bottom 50% of income earners pay only 3% of all income taxes
The Trump tax cuts continue to be maligned as a gift to the wealthy, but if that were true, why doesn’t Congress simply repeal those changes in their entirety? The answer is many of the changes benefit average Americans…as ill conceived as the cuts were.