{"id":88330,"date":"2025-07-12T01:00:25","date_gmt":"2025-07-12T08:00:25","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=88330"},"modified":"2025-07-15T08:39:17","modified_gmt":"2025-07-15T15:39:17","slug":"black-coffee-12-july-2025","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id88330-black-coffee-12-july-2025.html","title":{"rendered":"Black Coffee: Death & Taxes"},"content":{"rendered":"

\"\"It’s time to sit back, relax and enjoy a little joe …<\/em><\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

I hope everybody had an enjoyable week. Without further ado, let’s get right to this week’s commentary …<\/p>\n

If you try to sit, I’ll tax your seat
\nIf you get too cold, I’ll tax the heat
\nIf you take a walk, I’ll tax your feet
\n‘Cause I’m the taxman<\/em><\/p><\/blockquote>\n

– George Harrison<\/strong><\/p>\n

You don’t pay taxes – they take taxes.<\/em><\/p><\/blockquote>\n

– Chris Rock<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Credit:<\/strong><\/span> Did you see this? The \u201cBig Beautiful Bill<\/a>” legislation passed by Congress and signed into law this week, provides a $6000 boost to senior citizens\u2019 standard deduction from 2025 through 2028. The new tax break – $6000 for individuals and $12,000 for couples – is for tax filers age 65 and older. It starts phasing out for those who earn over $75,000 ($150,000 for couples). Those breaks are definitely appreciated. That being said …<\/p>\n

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Debit:<\/strong><\/span> Alas, many seniors will be disappointed to learn<\/a> that the provision does not eliminate taxes on Social Security benefits; the income tax deduction is temporary and not a literal cut in the Social Security tax. The trouble is, the federal government needs the cash because it not only can’t control its spending, but there’s also has an army of bureaucrats on its payroll. So the government pickpocketing will continue \u2013 but they’ll need to find easier targets until the current provision sunsets.<\/p>\n

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Gary Larson – The Far Side<\/p><\/div>\n

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Debit:<\/strong><\/span> If additional legislation isn\u2019t implemented to increase Social Security fund revenue, the new deduction could also accelerate Social Security insolvency<\/a> by one year, to 2032, according to some estimates. Then again, that’s a story that’s been around almost as long as Social Security itself. But as long as duct tape and baling wire exists, patch jobs \u2013 whether it’s pushing back the designated full retirement age, lowering cost-of-living adjustments, raising the payroll tax, or increasing the payroll tax income limit \u2013 are always eventually implemented before the system implodes. Oh … and speaking of insolvency:<\/p>\n

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This was a cartoon in the Fort Worth Star Telegram by political cartoonist Etta Hume in the 1970s. (University of Texas at Arlington Libraries, Special Collections)<\/em><\/p><\/div>\n

Credit:<\/strong><\/span> It\u2019s not just seniors who will be seeing tax relief starting this year. The new legislation also increases the deduction<\/a> by $750 for individuals, $1500 for married couples, and $1125 for a head of household, effective in the 2025 tax year. Oh… and in case you’re wondering, about 90% of federal taxpayers use the standard deduction rather than itemizing deductions. This should come in handy for those who have been impacted by the relentless rise in consumer prices. Oh, wait …<\/p>\n

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Credit:<\/strong><\/span> Tipped workers such as restaurant servers, barbers and drivers would be able to deduct up to $25,000 in qualified tips<\/a>. Additionally, the bill creates an above-the-line income deduction for overtime pay of up to $12,500 for hourly workers who put in longer hours. Not that most people today seem to be looking at the big picture when it comes to taxation. Or for that matter, paying any attention at all …<\/p>\n

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Credit:<\/strong><\/span> So much for claims from the opposition that the tax cuts only benefitted the rich<\/a>. Now you know why most Americans are no longer fooled by the empty rhetoric from the usual town criers.<\/p>\n

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Credit:<\/strong><\/span> Despite the renewed threat of new higher tariffs by President Trump, equities remained relatively unfazed. For the week, the three major stock indices barely budged<\/a> off their recent all-time highs; the Dow fell 1.0%, the S&P lost 0.3% and the Nasdaq was essentially unchanged. Oh …and in case you’re wondering if there are any<\/em><\/strong> bears left, the answer is most definitely “yes!” Well… at least one, anyway. But it’s not on Wall Street…<\/p>\n