2 thoughts on “Thursday Links”

  1. The Capretta article was an excellent read, even though I can’t say I agree with every point. In particular, the immediate goal for Social Security should be a soft landing for the trust fund, rather than trying to manage perpetual solvency with the current COLA arrangements. Also, reducing the 15 percent tier to 10 or 5 percent seems to render it pointless, as it already amounts to the equivalent of an interest-free return of capital. It would make more sense to simply lower the benefits cap and gradually squeeze the 15 percent tier out of existence.
    Consolidating Parts A and B makes sense, although I wonder if that would tend to reduce spending discipline for one side at the expense of the other. Hospital care costs are more catastrophic than outpatient costs, so combining them might make Part B expenses harder to control. But consolidation, or possibly instituting a Part A premium might be a better alternative than using the Social Security benefits tax.

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  2. Another gem of the tax bill is that it raises the marginal tax rate for seniors by six percentage points in the $75K to $175K income range because of the “bonus deduction” phase-out. This will no doubt affect many peoples’ tax strategies.
    Apparently this part of the tax bill takes effect this year, so hopefully the above-mentioned tax strategies aren’t already set in stone.

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