Peter Bromberg's UnBlog

Health Savings Accounts (HSAs) have become a popular tool for managing healthcare costs and saving for future medical expenses. However, like any financial instrument, they have both advantages and disadvantages. One of the significant pros of HSAs is their triple tax advantage. Contributions to an HSA are made with pre-tax dollars, reducing your taxable income. The funds in the account grow tax-deferred, and withdrawals for qualified medical expenses are tax-free. This makes HSAs an attractive option for saving for healthcare costs, especially in retirement when medical expenses tend to rise. Another advantage of HSAs is their portability. Unlike employer-sponsored health plans, HSAs travel with you from job to job. You maintain ownership of the account and its funds, regardless of changes in employment. This flexibility is particularly beneficial for those who frequently change jobs or become self-employed. HSAs also offer investment opportunities. Depending on your HSA provider, you...

When it comes to the alleged “fiscal cliff”, both supply-siders and Keynesians are in agreement that jumping off would bring tragic economic consequences. However, conventional wisdom is nearly always wrong, and I believe it’s wrong here. We won’t reach the fiscal cliff because the incentives that drive politicians ensure a deal. With the economy still limping, very few politicians will want to be on record as having voted to raise rates of taxation. Every member of the House of Representatives is up for re-election in 2014, a third of all senators are, and they’re not going to vote for large tax increases. Considering spending, though it nearly always occurs at the expense of growth, politicians exist to spend our money. We’ll never jump off the "fiscal cliff". For Keynesians like Obama and his advisers, they’re deluded by the false belief that government spending is an economic stimulant. So automatic reductions in spending by the feds would directly subtract...

“Fiscal cliff” is the popular term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect. Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that will take a larger bite, the end of the Bush tax cuts from 2001-2003, and the beginning of dozens of new taxes related to Obamacare. These tax changes affect everyone -– not just “the rich”. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.” This bill was signed into law by Barack Obama on August 2, 2011 . Republicans should allow th...

A graph titled 'Private Sector Job Creation' on the Obama-Biden campaign website… announces proudly that 4.4 million private sector jobs have been created over the past 28 months. But at the same point during the Reagan recovery, the economy had created 9.5 million new jobs.     Contrary to the Obama campaign's misleading claim of 4.4 million new jobs created, total jobs today are still half a million less than in January 2009 when Obama entered office.    The unemployment rate, which we were told would not exceed 8% if we enacted Mr. Obama's stimulus package…has never fallen below 8% during his presidency. The rate has averaged 9.2% since February 2009. After Bush's tax rate cuts were all fully implemented in 2003, the economy created 7.8 million new jobs over the next 4 years and the unemployment rate fell from over 6% to 4.4%. President Obama and his chairman of the Council of Economic Advisors, Alan Krueger, brag that private sector ...

The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO. At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes. Between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent, mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect. The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three . According to the CBO report, federal tax revenues equaled $2.302 trillion in fiscal 2011, and will increase to $2,523 trillion in fiscal 2012, $2,988 trillion in fiscal i...

Why would Democrats want the two-month cut instead of the yearlong cut? Because they didn’t want to give the issue up as a political boon. It allowed them to criticize Republicans for hypocritically opposing a tax cut. They settled for Keystone and offsets in exchange for the ability to again bash GOP-ers over their opposition to the tax cut extension two months from now. The House didn’t want to play along. A study came out to demonstrate that a two-month tax cut would be unworkable, allowing them to focus on the timeframe, rather than the tax cut extension itself. Their game? A two-month tax cut extension is a source of too much uncertainty for taxpayers. That's true, but it's not the central issue. Here’s the problem: Whether it’s for two months or a year, a payroll tax cut extension is simply bad policy . In the context of comprehensive Social Security reform, it might make sense to tamper with the payroll tax. But as a half-hearted, gimmicky gesture to pander ...

There is considerable political noise surrounding the idea of job creation. The right wing uses the “job creator” argument to push the position that increasing taxes on the rich will burden job creators and deter from future job creation.  The other side tries to show that we should increase taxes on the rich and reduce taxes on the real job creators – the consumers.  This is another common case of filtering economics through a political filter in order to validate a preconceived bias.  A capitalist economy has, in the extreme aggregate, a theoretical level of infinite demand.  Entrepreneurs and capitalists meet that demand by creating goods and services with the hopes of generating a profit.  Importantly, the consumer and supplier are two sides of the same coin.  Henry Ford doesn’t exist without demand for automobiles.  Apple doesn’t exist without demand for iPhones. If there is no demand for the goods and services in a capitalist economy then the...

This NYT Graphic keeps coming up repeatedly (it's been so widely reproduced, many don't even realize that the Times is the original source!) It's really emblematic of the mindless leftist FUD about economics. Just for starters, this thing represents the "Bush Tax Cuts" as a "cost" . What they fail to understand is that tax rates and tax revenue are two different things. Since the Eisenhower administration in the 1950's federal tax revenue as a percent of GDP has averaged about 18 percent. It didn't matter whether top tax rates were 92 percent (yes, they were that high!), or as low as 30 percent. Tax "rate" differences are not a "cost" item that you can just stick in some chart and say, "See! Bush cost us more money than Obama!". Tax "Cuts" (or in reality "current tax rates", whatever they may be) are not really a cost at all. What we need to measure is revenue to determine if curr...

Er, "yippee" --the IRS is going to return money collected from our phone bills that was supposed to to pay for the Spanish-American War. The Federal Excise Tax, which was enacted in 1898, amounts to about $3 per month for the average say, $100 / month phone bill. Heavy phone users might pay $100 or more per year. Yep, this was actually to pay for the Spanish-American War, and we've all been paying for "it" since 1898. Fortunately, once this ludicrous tax started getting some legs in the press, no one could really defend it and the tax has indeed finally come to an end. We're even being offered refunds: You are to claim the refund on the 2006 tax form that you file in 2007. You can opt for a standard refund of $30 (if you have one exemption), $40 (if you have two), $50 (if you have three) or $60 (if you have more). This option requires no documentation from you. If you have (or want to go through the trouble of procuring) your telephone bill statements from ...