Yea! Trump has another Big Tax Plan. No tax on tips, no tax on overtime!
Sounds great, but: You get it today; you pay for it later.
The national debt would rise, so your grandchildren get to deal with that.
You (if all taxes are exempted) get more money today and forfeit on Social Security later.
For those who do not pay on all income (i.e. tips), you need tounderstand how Social Security is funded.For the first $1,174 of monthly income, you get 90% return on Social Security. That nets $1,056 per month Social Security.
For the amount above $1,174 up to $7,078 per month, you net a 32% return on Social Security.
And for any amount over $7,078, the return is 15%. Most of us will not see that.
So, let’s say you get $30,000 per year in tips, and you do not report and/or pay taxes on them. That will cost you $800 per month in lower Social Security.
Overtime has the same deal.
Do the math. Higher national debt, lower Social Security.
You (and we) cannot afford this. And your (and our) grandchildren cannot afford this.
David O. Smith
Lima
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