Americans Are Delaying Health Care Until Tax Refunds Arrive • Hacker News Board

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#41

Post by AnthonyMouse » Sat, Apr 13, 2019, 7:07 PM UTC

jfk13 wrote: post #22

wsdfsayy wrote: post #15

Earlier quoted context omitted.

Anyone living in a state with high income and/or property taxes will likely pay more this year given the $10k cap on deductions for state and local taxes which was previously unlimited before the 2018 tax year...

And why not? I don't see any fundamental reason why your local taxes should be deductible for federal tax purposes.

Because you don't actually have that money.

Suppose that the state and the federal government each had a 55% tax rate. Then you would make $1 and owe $1.10. You would owe more in taxes than you make, so you would quit your job.

Of course, there is a simple way for the states to fix this -- move the taxes to the business side. Instead of having state income tax, have payroll tax paid by the employer. Then the employer can still deduct them from its federal taxes. This also improves eligibility for people in your state for various need-based federal programs, because nominal wages will be lower by the amount of the tax when determining eligibility for federal assistance. And it gives everyone a de facto raise until wages adjust to the shifted tax burden.

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#42

Post by briandear » Sat, Apr 13, 2019, 7:07 PM UTC

kartan wrote: post #32

> Out-of-pocket medical spending jumps once the money hits people’s bank accounts. It is a bad thing that tax withholding is one of the few ways Americans can have savings. When you live check to check this can be your only option.

How is it the only option? If withholding is less, what’s stopping people from saving the reduction? A refund is essentially an interest free loan repayment from the government. Refunds should ideally be zero.

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#43

Post by wutbrodo » Sat, Apr 13, 2019, 7:08 PM UTC

ip26 wrote: post #39

wutbrodo wrote: post #37

Earlier quoted context omitted.

> For example, I shudder to imagine what shopping sprees politicians might engage in, were they bequeathed with the nation's entire yearly budget in one day! The USG has more flexibility with spending relative to liquid resources than pretty much any entity in the world. I can assure that having tax receipts directly in the bank has nothing to do with the way we spend and would have even less to do with the psycholog…

No offense but I'm not prepared to inform my policy opinions on the basis of your assurance.

We're rather far from discussing any substantive changes in policy, leaving aside the fact that you only have a single vote to cast.

This is an incredibly bizarre response to someone making the case that you have a factually inaccurate model of the way policy works. On the other hand, I appreciate your comment in that the psychology on display here is another data point in helping me understand the psychology of how an ostensibly voter-driven government can be so consistently stupid and backwards: If people's response to "you're misunderstanding how this works" is effectively "my opinion is as important as any fact"

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#44

Post by briandear » Sat, Apr 13, 2019, 7:16 PM UTC

wsdfsayy wrote: post #15

mises wrote: post #12

Earlier quoted context omitted.

I am curious as to the reason why. Do you live in a state with high state income tax?

Anyone living in a state with high income and/or property taxes will likely pay more this year given the $10k cap on deductions for state and local taxes which was previously unlimited before the 2018 tax year...

“Anyone?” That isn’t accurate because you’re ignoring the doubling of the standard deduction. Higher income people who itemize would be the only ones affected. And with the reduced tax rates offset some of that lack of SALT deductibility. That SALT change only really affected less than 7% of taxpayers (10.9 million filers out of 153 million who filed returns.)

https://www.cbsnews.com/news/salt-tax-deduction-on-2018-tax-...

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#45

Post by koolba » Sat, Apr 13, 2019, 7:17 PM UTC

briandear wrote: post #42

kartan wrote: post #32

> Out-of-pocket medical spending jumps once the money hits people’s bank accounts. It is a bad thing that tax withholding is one of the few ways Americans can have savings. When you live check to check this can be your only option.

How is it the only option? If withholding is less, what’s stopping people from saving the reduction? A refund is essentially an interest free loan repayment from the government. Refunds should ideally be zero.

> How is it the only option?

It’s not but it’s a lot easier for many people if they don’t realize they have the money.

> If withholding is less, what’s stopping people from saving the reduction?

Reality. It’s no different then walking around town with a couples $20 bills vs walking around with your pockets empty. Sure you could just not spend any of it but it’s a hell of a lot easier if you don’t even have the option.

Not having cash on hand and being forced to make due with less is surprisingly effective.

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#46

Post by tellak » Sat, Apr 13, 2019, 7:18 PM UTC

empath75 wrote: post #18

wsdfsayy wrote: post #15

Earlier quoted context omitted.

Anyone living in a state with high income and/or property taxes will likely pay more this year given the $10k cap on deductions for state and local taxes which was previously unlimited before the 2018 tax year...

Anyone who pays 10k in state taxes is going to be well into the top 10% of incomes.

State and property taxes. Not everyone paying exorbitant property taxes is that high in income. Also, income distribution what it is today, 90%tile income is still middle class!

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#47

Post by octorian » Sat, Apr 13, 2019, 7:22 PM UTC

zamadatix wrote: post #13

outside1234 wrote: post #8

Who is getting a tax refund? I got crushed versus last year on my taxes because of the orange buffoon's tax plan.

Whether you get a huge tax refund or not is about how much you chose to overpay on withholdings not how much you were taxed.

And typically lower-paid people have higher deductions on their taxes (versus withholdings) and usually get the larger refunds. So much so that they basically depend on it. That's why everyone is in such shock right now. Meanwhile, I've never been one to get a large refund at tax time. And I've always planned for my big annual expenses upfront (sometimes using an automatic bank account transfer to "incrementally save" for them).

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#48

Post by sixothree » Sat, Apr 13, 2019, 7:25 PM UTC

lotsofpulp wrote: post #3

Patrick_Devine wrote: post #2

This is insane given that the executive branch has been jiggering around with the withholding amounts for the entire year. Yes, you probably paid slightly less in tax during the year, but unless you were paying attention to your federal withholding, you're probably in for a shock with your federal return.

The solution to people’s inability to save is not for the government to hold their money hostage.

It is easy to ignore the reality of human nature especially for those who are struggling.

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#49

Post by ip26 » Sat, Apr 13, 2019, 7:26 PM UTC

wutbrodo wrote: post #43

ip26 wrote: post #39

Earlier quoted context omitted.

No offense but I'm not prepared to inform my policy opinions on the basis of your assurance.

We're rather far from discussing any substantive changes in policy, leaving aside the fact that you only have a single vote to cast. This is an incredibly bizarre response to someone making the case that you have a factually inaccurate model of the way policy works. On the other hand, I appreciate your comment in that the psychology on display here is another data point in helping me understand the psychology of how…

someone making the case that you have a factually inaccurate model of the way policy works

Your case was basically "trust me, I'm right".

Re: Americans Are Delaying Health Care Until Tax Refunds Arrive

#50

Post by akhilcacharya » Sat, Apr 13, 2019, 7:29 PM UTC

briandear wrote: post #44

wsdfsayy wrote: post #15

Earlier quoted context omitted.

Anyone living in a state with high income and/or property taxes will likely pay more this year given the $10k cap on deductions for state and local taxes which was previously unlimited before the 2018 tax year...

“Anyone?” That isn’t accurate because you’re ignoring the doubling of the standard deduction. Higher income people who itemize would be the only ones affected. And with the reduced tax rates offset some of that lack of SALT deductibility. That SALT change only really affected less than 7% of taxpayers (10.9 million filers out of 153 million who filed returns.) https://www.cbsnews.com/news/salt-tax-deduction-on-2018-t…

Just putting it out there, 11 million is significantly more than the number of people that lost their insurance in the “if you like your insurance you can keep it” outrage of 2013.

So 7% is quite a bit.