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- Social Security has a tax problem
Social Security has a tax problem
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I share the 4-5 most important accounting that actually matter. I scroll so you don’t have to.
So grab your coffee, take a quick break, and lets catch up.
In this issue:
States want millionaires to pay more.
Social Security still surprises retirees.
Big Tech spends $700B on AI.
- Ledger Lowdown Team
WTF of the Day🤯
States Want Millionaires to Pay More
States are running short on cash, and lawmakers are looking at the people with the most of it. Maine just passed a new 2% tax on households making more than $1 million a year. Washington passed a 9.9% tax on income above $1 million. Similar ideas are floating around in Illinois, Minnesota, Rhode Island, Virginia, California, New York, and other states. Supporters say the math is simple, teachers, nurses, and firefighters often pay a bigger share of their income than the very rich, so high earners should kick in more. Massachusetts already did this in 2022, and its millionaire surtax has brought in about $6 billion for education and transportation.
State tax planning is getting more political, more aggressive, and more split by geography. Blue states are looking upward for revenue. Red states are cutting or flattening taxes.
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What’s poppin in accounting🍿
Why Social Security Still Surprises Retirees
A lot of retirees assume the check is tax-free. Not always. CPA Anthony Hughes says clients run into this every year. You can start taking Social Security at 62, but full retirement age is now 67. Wait longer and the monthly check gets bigger. Take it early and you get cash sooner, but the math can take years to even out.
If you keep working while collecting benefits, your paycheck can shrink what you receive before full retirement age. And once you have enough other income, up to 85% of your Social Security can become taxable. The limits are not exactly generous either $25,000 for single filers and $32,000 for married couples filing jointly. Those numbers have barely moved in decades, so more retirees get dragged into the tax pile every year.
Weekly Trend Chart 📊
Big Tech Is Spending $700B on AI
Big Tech is not easing into AI. It is backing up the money truck. Alphabet, Amazon, Microsoft, and Meta now plan to spend more than $700 billion on capex this year. That is nearly double what they spent last year, and about $100 billion more than they were planning just one quarter ago. Alphabet raised its forecast to as much as $190 billion. Meta bumped its plan to as much as $145 billion. Microsoft said it expects to spend $190 billion. Amazon kept its number flat, but flat still means $200 billion.
Most of this money is going into the boring-but-critical stuff behind AI: data centers, chips, servers, power, and cloud infrastructure. Tech does not see AI as a feature. It sees AI as the next platform war. And right now, winning that war means spending hundreds of billions before anyone knows exactly how big the payoff will be.
Meme of the Day😂
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