Jan 8, 2018
The newly passed Republican tax law contains a stealth change that will rob senior citizens. It has to do with the way that cost-of-living increases will be calculated in the future.
The old system was called the Consumer Price Index. It looked at price increases on the same items over time. This new system is called the Chained Consumer Price Index.
This new method under-estimates inflation. It allows for “substitution.” This is how it works. If the price of beef goes up, this formula assumes consumers will “substitute” a cheaper meat. In other words, if consumers “substitute” chicken necks for beef, then there was no inflation – just substitution.
The tax bill changing the IRS to this method will be the foot in the door for other federal agencies to change methodology. In 2013, then President Obama wanted to change Social Security to being based on the Chained Consumer Price Index. He backed down after an uproar.
Senior citizens this year are outraged. A promised 2 percent raise in Social Security benefits was snatched from them due to premium costs for their health insurance – Medicare – going up.
And speaking of under-estimated inflation, Medicare premiums have gone up 7.7 percent a year since 1966!
If the creeps in Congress and the White House think seniors who worked hard all their lives won’t know they are being robbed, they have another think coming!