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View Diary: Mapping out arguments against chained CPI (16 comments)

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  •  Bracket Creep (0+ / 0-)

    Are you blind?

    Investors can deduct $3,000 in capital losses against ordinary income, a benefit that cushions the sting of a failed investment. It’s a tax break frozen in time, stuck at the same nominal dollar amount since 1977.
    The cap isn’t indexed for inflation. Its benefit erodes every year. The break would be worth more than $10,000 if it was pegged to inflation like other parts of the U.S. tax code.
    This provision -- along with the similarly frozen $1,000 child tax credit and $25,000 income level before Social Security benefits are taxed -- are absent from the political debate. Lawmakers have focused instead on which measure of inflation to use for the parts of the tax system that are already tied to prices. President Barack Obama will include in his budget proposal today a plan to switch to a lower inflation gauge known as the chained Consumer Price Index.
    That means these other benefits cease to do what Congress intended in the first place as they become less valuable, especially if inflation picks up.
    Do the Google you may learn about something besides RW GOP freaks!
    •  Another misleading article (0+ / 0-)

      The main objection that people have to chained CPI is that it is not specific enough: it includes all consumers, so the impact of inflation on spending patterns by the elderly may not be represented accurately. Since Social Security affects mainly the elderly, some have objected to the change, even though chained CPI is arguably more accurate when applied to all consumers. But this article now is arguing that we should keep a less accurate CPI formula for everyone, in spite of its greater accuracy, either because it errs in “our” favor or because of voodoo.

      The voodoo aspect of this is that the term chained CPI has taken on magical powers. It is seen as evil, and an amazing number of my fellow Democrats are now attempting to ward off the bad luck that will swoop down on them if it is adopted by vociferating more and more zealously against it.

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