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Old 02-06-2011, 07:47 PM   #101
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I do think the means test could come in. In that case, it would be silly to keep collecting SS tax from those who will likely not collect SS benefits. And SS benefits were meant to be a safety net, so if you really don't need the money, I see that in the future, means testing would make sense -- otherwise, how can the system be sustainable in the long term?

My take is that the trend of lowering SS tax would continue. SS Trust fund will be reimbursed to make up for the recent 2% cut in SS tax. Social Security Tax Cut: A Deal Breaker | Op-Eds & Columns I believe this can be done even if SS tax goes to 0%. We'll just cover it basically from income/corporate tax revenues. So I don't see SS tax going up.
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Old 02-06-2011, 07:53 PM   #102
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Excuse me?
No, this is not true

This also is not true

I have no idea what you mean by this.

Everything else I agree with.
A quick review of your posts in other threads will reveal your support for higher estate taxes, end of of the Bush tax cuts, and a fervor for a higher progressive income tax for upper income brackets... And in this thread you favor means testing for SS and Medicaid, in essence a higher net tax rate , since some will be getting less back relative what they put in, (a progressive penalty for accumulating assets) as compared to other recipents who wouldn't or couldn't save for their retirement. Hence the "more is better".
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Old 02-07-2011, 03:57 PM   #103
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Unless I turn out to be "richer" than I expect, neither my assets nor my income should attract much attention...
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Old 02-07-2011, 07:35 PM   #104
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I think I have enough, but I have this nagging suspicion that when I have too much time on hand, I may morph from a frugal type to a spendthrift with new toys and leisure activities.

Has that happened to anybody who wants to 'fess up?
I have my moments...I went to FL 3x last year, one of them after a larger (than expected) tax refund happened. My life coach told me to loosen up my strict savings regime and go on some trips while I was young and had the energy to do so. She was right...those trips did me a world of good.
This year, I spent my travel budget on a picture window replacement that was sorely needed. The remainder is being used for our little MA trips.
I never go beyond my "extras" budget for any reason. I just do different things with the annual allocation I give myself.
Variety is the spice...
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Old 02-07-2011, 08:05 PM   #105
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No, I'm not worried about having so much money that SS means testing will hit me. I'm worried about having so little money that no one would consider cutting my SS.

If I end up with lots of money, then I've succeeded at FIRE and I'm not going to be worried about a small hit to my SS benefit.

In terms of squeezing the last dollar out of the system. I'm 63 and currently deferring benefits. The longer I wait, the smaller my assets, and the less chance that I'll look rich if/when means testing comes around.
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Old 02-08-2011, 06:13 AM   #106
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I don't think that being frugal is something you just do. I think it is learned when we are young as children. you have an allowance and you want to buy as much with it as possible. or maybe you have to save your money to buy that special something. whatever the reason you want to be able to get the most for your dollar, and once you go down that path it's not so easy to come back. every time you buy something you speculate is it worth it? where to put it? how much maintainence will it require? etc.,etc., I am comfortable with my income and have no worries about money, but still I won't buy something of any cost without thinking on it for a couple days. so that tells you that morphing into a spendthrift is not as easy as it sounds.
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Old 02-08-2011, 08:44 AM   #107
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A quick review of your posts in other threads will reveal your support for higher estate taxes, end of of the Bush tax cuts, and a fervor for a higher progressive income tax for upper income brackets... And in this thread you favor means testing for SS and Medicaid, in essence a higher net tax rate , since some will be getting less back relative what they put in, (a progressive penalty for accumulating assets) as compared to other recipents who wouldn't or couldn't save for their retirement. Hence the "more is better".
Tax time again? Looking for an argument about taxes? I'm honored - but sorry, I decline. Too busy.

If we do engage on this subject again, I won't do any "quick reviews" of your posts - they lead to oversimplifications and inadequate categorizations.
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Old 02-08-2011, 12:45 PM   #108
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Of course all the chatter in Washington these days is about the unsustainable deficit. Folks are talking about means testing the middle class retirement programs like Social Security and Medicare (obviously Medicare isn't going anywhere, but perhaps a larger premium would be required for folks who have means.)
This is not just talk, it is already the law of the land. Part B premiums are assessed on a sliding scale depending on income, and I believe Part D is also, beginning this year.

Ha
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Old 02-08-2011, 04:08 PM   #109
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This is not just talk, it is already the law of the land. Part B premiums are assessed on a sliding scale depending on income, and I believe Part D is also, beginning this year.

Ha
Right, but I thought the OP's question was not about income, but rather accumulated assets. How the government would do this, I have no idea.
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Tax money is Fungible
Old 02-08-2011, 04:23 PM   #110
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Tax money is Fungible

Does anyone really care what gets taxed ?

Does it matter whether SS is means tested or sky high income taxes are implemented ?

OK - can't means test SS but your property taxes, sales taxes, and income taxes are tripling.

But no way are they going to touch that SS that I paid for !

I showed them !
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Old 02-09-2011, 08:51 AM   #111
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Right, but I thought the OP's question was not about income, but rather accumulated assets. How the government would do this, I have no idea.
Quote:
Folks are talking about means testing the middle class retirement programs like Social Security and Medicare (obviously Medicare isn't going anywhere, but perhaps a larger premium would be required for folks who have means.)

It seems that folks like us that are / have been building up a nest egg would end up getting screwed by all this. If there is a high balance in an IRA, thus having a sizable RMD, or income generating or non-retirement liquid asset, or a side pension, etc., then the entitled SS benefit may be means-tested completely away!
So, to me at least he seems to be talking about income-"If there is a high balance in an IRA, thus having a sizable RMD, or income generating or non-retirement liquid asset, or a side pension, etc., then the entitled SS benefit may be means-tested completely away! "

Anyway, means testing is here, in size, and it is not going away. SS is already hugely redistibutionist- why it should be more so I'll leave to the board's well known advocates for more and better redistribution.

Ha
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Old 02-09-2011, 09:26 AM   #112
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Does anyone really care what gets taxed ?

Does it matter whether SS is means tested or sky high income taxes are implemented ?

OK - can't means test SS but your property taxes, sales taxes, and income taxes are tripling.

But no way are they going to touch that SS that I paid for !

I showed them !
You make perfect sense. In aggregate either government revenue needs to increase or spending needs to decrease or some combination of both. So in aggregate, it doesn't matter. One is the same as the other. But in practice, there are huge differences in who pays, and that is what the commotion is over.

I thought this article on the end of government earmarks was telling. Everyone is in favor of ending earmarked "pork" projects, until they realize that the projects being cut benefit them. Many of the folks on this board who come out routinely for lower taxes and lower spending also come out against cuts to government pensions, social security and health care, which account for the largest share of government spending, and therefore taxes.

We're going to see a lot of this in the months and years ahead. But there is a bright side, we're now finally focusing on what government does, how well it does it, and how to balance those services that we want and, yes need, against our desire to pay the lowest taxes possible. In the end, these discussions will be more healthy than the "guns, butter, and tax cuts" free lunch we've enjoyed for the past several decades.
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Old 02-09-2011, 10:31 AM   #113
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I believe means testing is a virtual certainty for SS. Let's face it, all us "rich" people are reviled by those pushing for a statist, socialist government. Someone mentioned "busloads" of senior citizens descending on Washington if this is proposed. Really? More likely it will be busloads of the other 95% who HAVEN'T saved for retirement who'll want our oxes gored to maintain their benefit levels.
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Old 02-09-2011, 11:16 AM   #114
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I believe means testing is a virtual certainty for SS. Let's face it, all us "rich" people are reviled by those pushing for a statist, socialist government. Someone mentioned "busloads" of senior citizens descending on Washington if this is proposed. Really? More likely it will be busloads of the other 95% who HAVEN'T saved for retirement who'll want our oxes gored to maintain their benefit levels.
I do not think there will be “direct” means testing of Social Security.

To do so will i) be too difficult politically and ii) the level at which means testing will have to kick in will ensnare too much of the middle class (there are not enough people with $2 million in assets (absent homes) to make a real dent in the problem).

Therefore, I would bet the ultimate resolution will be a combination of i) increase FICA levels without increasing benefit payouts (which is a form a “means” testing), ii) increase retirement age and iii) 100 % taxable SS income above some threshold.

And oh yeah, income taxes in general will be going up…
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Old 02-09-2011, 11:32 AM   #115
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I do not think there will be “direct” means testing of Social Security.

To do so will i) be too difficult politically and ii) the level at which means testing will have to kick in will ensnare too much of the middle class (there are not enough people with $2 million in assets (absent homes) to make a real dent in the problem).

Therefore, I would bet the ultimate resolution will be a combination of i) increase FICA levels without increasing benefit payouts (which is a form a “means” testing), ii) increase retirement age and iii) 100 % taxable SS income above some threshold.

And oh yeah, income taxes in general will be going up…
I tend to agree with your assessment, but would also suggest a lower cap on total SS payments to higher income earners as a real possibility.
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Old 02-09-2011, 07:30 PM   #116
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Anyway, means testing is here, in size, and it is not going away. SS is already hugely redistibutionist- why it should be more so I'll leave to the board's well known advocates for more and better redistribution.Ha
And we all know who "they" are - alright, folks, no need to save, there will be plenty for everyone, line forms on the left...
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Old 02-09-2011, 08:12 PM   #117
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And we all know who "they" are - alright, folks, no need to save, there will be plenty for everyone, line forms on the left...
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Old 02-09-2011, 08:16 PM   #118
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Right, but I thought the OP's question was not about income, but rather accumulated assets. How the government would do this, I have no idea.
Assets in the form of bank and brokerage accounts, whether after-tax or before-tax, are readily tracked. Assets in the form of real estate can of course be traced, although tax assessments by the Federal government would be unprecedented, I believe.

Of course, gold bars, coins, collectibles and family heirlooms are nearly impossible to tally. However, as explained by FD in a post in the past, the French system has an asset tax, and it relies on voluntary compliance of the citizenry to list all of their assets. As it is easy to understate one's wealth, I remember FD said that the penalty for non-compliance, if it is discovered, can be severe.
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Old 02-09-2011, 11:05 PM   #119
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States already means test Medicaid benefits. Have assets? No nursing home benefits for you until you spend down to a allowable level. The feds could do the same with SS. When you apply for SS benefits you present an accounting of your net worth.

The gov't can be ingenious in its ability to seize property from its citizens.
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Old 02-10-2011, 04:44 AM   #120
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Hello Patrick - I consider myself "wealthy" and I would have no problem being more taxed / more means tested ONLY IF it means the creation of more meaningful, concrete social programs for the ones in need. I would have no problem either paying 10%-20% more in income tax if it helps the creation of a true universal healthcare program.

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I believe means testing is a virtual certainty for SS. Let's face it, all us "rich" people are reviled by those pushing for a statist, socialist government.
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