This is the Kator Daily Podcast for Thursday, June 6, 2024.

I'm Caleb Brown.

On the heels of his testimony on removing impediments to Americans saving without penalty.

I spoke with Caters Adam Michelle about why some members of Congress seem more interested

in creating new so-called tax-advantaged savings vehicles than removing onerous government

impediments to saving. You spoke recently on Capitol Hill and you were brought there to talk about I I suppose, tax advantaged savings vehicles and how Americans

save and how they ought to save and impediments to saving because we, know looking at the math it seems like

Americans don't save as much as they should what role does the tax code play in that the

tax code systematically penalizes savers.

When you earn a paycheck, the government takes a cut of it through the payroll tax and the income

tax.

And then if you save your money and you earn interest or returns on that if you invested in the stock market,

those returns are what the market is paying you to not consume your income today.

And so those additional taxes on on interest and capital

gains are all disincentives to to putting money away and to save. And so the

word tax advantage savings accounts is actually a misnomer. It's actually removing an impediment to savings.

They're savings neutral tax accounts and protecting the savings that's been earmarked by Congress from this sort of double

tax that makes it harder for people to save. And on the flip side of that, to what

extent does our tax code privilege debt over saving.

So in a bunch of different depending on the debt,

whether it's through a business or at the individual level, there's deductions for interest expense, which can create a subsidy for borrowing.

You have to take into consideration the taxes that are paid to on the other side when interest income is paid to the person who's who it's owed to but generally speaking debt is preferenced in the tax code over equity investments.

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