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Comment by mdorazio | Hacker News Reader

In addition to the no-surprise explanation of the "tax cut" not being an actual cut at all for most people and the uptick in household interest payments (likely driven by student loans and increased housing prices in many markets), the key takeaway quote for me is:

"two-thirds of April’s new jobs were generated in lower-wage services industries such as administration and support services, health and social services, leisure and hospitality, among others. The flip-side of this dynamic is that high-paying job growth has been nearly halved to 1.6 percent since peaking in 2015."

I've been trying to explain to people for years now that reduction in unemployment does not mean people are getting good jobs, it just means people are getting a job that employs them "full-time" with or without benefits, livable salary, etc. The data here supports that: "good" job growth is far outpaced by low-quality job growth.

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> I've been trying to explain to people for years now that reduction in unemployment does not mean people are getting good jobs, it just means people are getting a job that employs them "full-time" with or without benefits, livable salary, etc.

I’d like to amend that unemployment numbers that are widely reported are simply people employed (not full time). It includes part time, people who work in one industry but have expertise in a different industry(see retail).

All I’m saying is it’s good to keep that in mind when reading these unemployment numbers.

And it doesnt take into consideration people that gave up looking for work because they couldnt find it and no longer receive unemployment benefits.

Probably half of people on disability should be counted as unemployed.

There is also the U6 unemployment rate which adds is discouraged and part time workers who desire full time.

My first thought was: what are those numbers doing, and the first graph I found is that all of these seem to be tracking about the same way:

https://www.macrotrends.net/1377/u6-unemployment-rate

So it is an important thing to consider, but it does not look like it tells a different story at the moment.

Wages have been rising too, for the first time in many years.

This is truly a time of economic prosperity (at least in the US). It won't last forever. Make whatever moves you have available to you at this time to prepare for the times ahead.

Like the boom years of Reagan and Clinton, we'll all look back at this time later and say "What an opportunity!" Sadly, there inevitably will be a fall like 2000 or 2008 at some point to bring us back to earth.

I'd like to note that the article makes no claim regarding whether the tax cut saved households money. Rather, we now have the numbers that show a huge swing towards households owing taxes at the end of the year. That says nothing about the tax charged them, and everything about their withholding.

The tax bill was designed in a way to make people's previous withholdings inaccurate (although theoretically more accurate overall). That was politically motivated for two reasons. People were more likely to see a positive (or less likely to see a negative) impact on their paycheck from the tax bill passing. Republicans have also historically wanted to make the act of paying taxes more painful for the average American on the belief that it would generate political motivation for lowering taxes. Tweaking the withholding rules to result in larger payments (or lower refunds) when filing taxes is part of that plan. Both those points have nothing to do with whether the overall tax plan was beneficial for the average American or the country at large.

Which, by the way, was a suprise due to the mostly-unpublicized changes to the withholding rates.

Add in tax penalties and it's a very unwelcome suprise for all but the most vigilant / those that pay people to manage their money.

More lower income jobs is not the same as low quality job growth. It’s great to see job growth at the lower income spectrums, which ultimately leads to wage growth in that same area of the curve.

There is no reasonable interpretation of our current nearly decade long run of employment numbers that is anything less than gangbusters. The US economy is literally the envy of the entire world right now.

> In addition to the no-surprise explanation of the "tax cut" not being an actual cut at all for most people

Justify that statement please. Every single study of the 2017 tax cuts has shown that the vast majority of Americans did in fact get a tax cut. Every. Single. One. Even the New York Times admits as much. Either you haven't really looked in to this at all, or you've bought some policital rally baloney that is completey ungrounded in truth.

[1] https://www.nytimes.com/2019/04/14/business/economy/income-t...

Most people did not save a meaningful amount of money while the wealthy got a massive benefit in comparison.

Because most people likely spent the extra they got from the tax cut?

Not supported by facts in evidence.

Taking that view further most people pay a meaningless amount of money in taxes while the wealthy pay the vast majority. The tax cut helped my family, if it didn't help yours perhaps consider if the state taxes you pay match up with the services rendered.

From your link:

> The middle fifth of earners got about a $780 tax cut last year on average, according to the Tax Policy Center.

> The top 20 percent of earners received more than 60 percent of the total tax savings, according to the Tax Policy Center; the top 1 percent received nearly 17 percent of the total benefit, and got an average tax cut of more than $30,000. And that’s not even factoring in the law’s huge cut to corporate taxes, which disproportionately benefit the wealthy households that own the most stock.

Hence (rightfully so) pitchforks. The average American taxpayer was bamboozled.

But since the top 20% of taxpayers pay 87% of income tax[1] and the top 1% pay 37%[2], this makes total sense.

1: https://www.wsj.com/articles/top-20-of-americans-will-pay-87... 2: https://taxfoundation.org/summary-latest-federal-income-tax-...

But it’s not how it was sold. The absolute number is not the issue, but the optics. I have seen this first hand with Trump supporters (extended family) who are having an unpleasant tax filing season (owing when they have never owed before) and feel lied to. I have delivered the bad news that their tax burden was already so low, how would they expect their tax cut to be generous? Like I said, optics.

EDIT: I know how tax refunds and liability work, but I am not the general public.

If you have to pay more or your refund is lower, that's a good thing. That means you paid less money in taxes.

The government holding onto your money until the end of the year is not a good thing. You'd be better off saving that money and investing it.

Progressive taxation makes sense, the fact that this tax law did nothing about the cap on the payroll tax should be the ultimate indicator.

> the top 1 percent received nearly 17 percent of the total benefit

Given that the top 1 percent pay more in taxes than the bottom 90% combined, that doesn't seem entirely unfair.

Seems unfair that someone making 11x what another person makes used to pay 25x as much as them in taxes but now pays 40x instead (i.e. 550k vs 50k)

Not to me? Seems totally fair assuming the person making 11x is still able to afford a comfortable lifestyle (which they're more than able to)

From each according to his ability?

And to each according to his needs. Yea, it'd be nice if we could get full on communism working at some point but I'm not holding my breath, in the mean time I'm happy to live with these rough balances of the system.

The median 5th of earners earned from 30-48K last year, which includes a huge chunk of people who pay zero federal income tax. A $780 tax cut in to someon who only pays $1000 is not insubstantial.

It's kinda the way math works - if you cut taxes for everyone, the people who pay the most taxes in absolute dollars will see the most benefit.

Oh, and you're not disproving my point - claiming a tax cut is not a tax cut because when people in fact paid less in taxes is kinda hard to do.

I think the tax cuts were stupid, but I don't see how a tax cut can work any other way. The top 1% pay 37% of all income taxes, so getting 17% of the benefit is actually quite progressive.

https://taxfoundation.org/summary-latest-federal-income-tax-...

What an unusual way to present the "progressive" ratio of taxes being paid, basing it on the total taxes paid by percentile groups. Of course a disproportionately wealthy percentile would be expected to pay most of the taxes in absolute amount or as ratios of absolute amounts between groups, if all the percentiles paid the same amount, but also EVEN IF the tax rates slide lower (i.e. are regressive) for the wealthy.

Progressive versus regressive tax rate discussions are more typically based on the ratio of one household's tax to that household's earnings. In other words, how much of what I make goes to taxes? I think this make comparisons more fair and straightforward, instead of comparing the ratios of combined absolute taxes by group.

I mean that the tax cut is progressive. If it wasn't progressive, then the 1% would receive 37% of the tax cut savings.

It's really hard to cut the federal income taxes on the poor, who pay no federal income tax.

I know for an undeniable fact I paid more in federal taxes (if you account for inflation) but I'm one measly anecdotal data point.

I suspect most who don't believe it are like me or saw modest cuts. Perhaps if I saw the data and analyzed it myself I might believe it, otherwise, I suspect the majority got small tax cuts while the very few ultra wealthy enjoyed significant cuts.

It was an across the board tax cut, yes wealthier people get larger tax cuts because they paid more taxes in the first place. I received a $2,500 tax cut.

If your taxes did happen to increase, it was most likely because you used one of the deductions that was removed.

A lot of the people who paid more in federal taxes are the wealthy in high tax states (CA, NY, etc.).

The biggest problem with the new tax plan is that the withholding tables changed to be more accurate. This is because a large number of people's standard deduction went up enough to almost match, or exceed, their mortgage interest and SALT deductions.

And since payroll withholding doesn't account for the mortgage interest deduction, but does count the standard deduction, they ended up taking out less taxes (basically giving everyone a couple hundred dollar "raise") during the year, which made the year-end refund much smaller.

And too many people budget big items based on that year-end overpayment refund, instead of setting aside that extra pay every month. So lots of people feel like their taxes went up.

Now what would have been nice is if there was an information campaign that would have business encourage employees (via auto payroll deposit) to divide their paycheck into checking and savings accounts, having that "extra" money go into savings automatically.

I didn't get a tax cut, my bill went up.

This is just anecdotal but I have no regrets about being anecdotal in response to bald hyperbole

> Every. Single. One.

I also object that a number of arts programs that interest me have gotten budget cuts that seem (though the government is large and opaque) to outweigh the money saved by the tax cuts I've seen other people get.

I really don't care about what portion of my out-of-pocket expenses go to the government, I care about the size of my take home - so when taxes go slightly down and cost of living goes up I'm unhappy. And for me, everything went up (and my salary isn't stupid high either)

>> two-thirds of April’s new jobs were generated in lower-wage services industries

Um, yeah, no shit. That's one of the segments this administration wants to help and create job market competition for: small businesses, low income people, folks who were SOL under previous administrations and voted for this one. Nearly every major economic initiative by this administration is targeted at tightening supply on the lower end of the job market: from stimulating manufacturing jobs, to China trade war, to NAFTA, to strengthening the border, and cutting off the flow of illegal low-wage labor.

Reduction in unemployment means less supply, less supply coupled with higher demand means labor can command higher prices. This is economics 101.

> I've been trying to explain to people for years now that reduction in unemployment does not mean people are getting good jobs

Is there a better metric for this? Something that combines the number of people with jobs with the amount they're making?

The article doesn't say the tax cut didn't help most people.

It makes the point that most people didn't notice it because they only pay attention to their tax refund. Their tax refund is going to be lower because they paid less taxes over the course of the year.

They are less likely to notice those incremental payments, but it's disingenuous to say they didn't receive a tax cut.

Ideally you want your tax refund to be $0 and invest the money instead of overpaying taxes.

Basically it boils down to who can manage your money better, do you need Uncle Sam to hold on to your money or not.

I wish we also tracked the number of jobs people had. Having 600,000 new jobs is good, except if a high percentage of those are second jobs.

We track unemployment (at several different levels). Isn't the relevant question how many people don't have a job? Or are under-employed?

Far out hypothetical: Laws and regulations can be passed / amended that allow companies to cut the hours of employees by half and allow them to hire twice as many people.

This produces more jobs, but I do not believe it's a positive.

Maybe there is another metric that can be included to better represent if job grow is having a positive.

Maybe under employed captures this. I don't know.

U-6 captures that [=

Source: https://www.bls.gov/news.release/empsit.t15.htm

Not a cut? Based on what data? Or is this a bait-and-switch where anything less than $2k is peanuts (so it's not really a cut)? I understand that people who own homes in high-tax states are missing out because of the SALT reform, but that's a far cry from 'most' people.

I'm glad that taxes went down for most people, but the cut made the tax code far more progressive than it already was, which I don't think is fair. But it's better than nothing.

Exactly. Like using lines of code as a proxy for progress or success.

how has automation not been a factor here? call centers, truck driving, etc.

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