Play the Social Security Game

[cute fuzzy bunny]

Don't confuse Capitalism with Democracy!

And dont confuse an imperial republic with a democracy either...

Laurence...its pretty easy to figure out. Rich people make the laws. Rich people approve them. Rich people stuff money and whatnot into the pockets of the lawmakers and law signers. Rich people take out television and newspaper ads, craft stories and marketing campaigns to get people "on board".

That they get tax friendly scenarios that appeal to rich people is a surprise?

The average joe, up to his eyeballs in his job, debt and family has scant time to notice.

 

[samclem]

Oh, those dadburned rich folks!! They've written the tax laws so that everything benefits them! Why, the top 50% of income earners pay over 96% of the individual income tax! And the real fat cats, the top 1%, have found a way to pay over 34% of the nation's individual income taxes! Obviously, they write the tax laws. They are a crafty lot!

When folks who pay, effectively, no taxes have more votes than those who are doing the paying, what will be the brake on more taxation? Just a thought.

http://taxprof.typepad.com/taxprof_blog/2006/05/joint_economic__1.html

 

[cute fuzzy bunny]

Thats true!

And the top 1% average $719K in annual income while the top 5% average $276K, while the lower 60% are bringing in a whoping median of $21K.

As a former 1%er, I felt really, really screwed when I wrote that check.

Wouldnt matter if they balanced the tax across all income levels. The tax burden of the top 5% would barely drop even if the bottom 60% put all of their money in.

Money is the grease on this wheel. Wheels gotta keep turning...

 

[Gumby]

..

 

[ash]

Laurence...its pretty easy to figure out. Rich people make the laws. Rich people approve them. Rich people stuff money and whatnot into the pockets of the lawmakers and law signers. Rich people take out television and newspaper ads, craft stories and marketing campaigns to get people "on board".

Just for clarification (I'm sure you already know this) when you say "rich" people, I assume you mean really, really, stinkin' filthy rich people, WITH special interests. I'm a 1%er as well, and I have absolutely zero influence on the system.

SS is a political Ponzi scheme, but unfortunately one that isn't going anywhere anytime soon. And like all pyramid schemes it requires an ever expanding base of people, wage slaves in this case, to keep it going. Hmmm, where could we find a large amount of wage slaves to keep SS solvent? (Hint: rhymes with Lexico)

I didn't play the "game", did it have an option for increasing the worker-to-retire ratio through increased immigration?

 

[laurence]

Ash, you made 400k last year? I think you could buy a little influence with that kind of money!

Our best year (the last one) got us to about the top 6%, from what I can tell, and we'll probably never get that high up the food chain again. Still, we didn't break above the SS cap.

 

[Tadpole]

SS Wall Street is a political Ponzi scheme, but unfortunately one that isn't going anywhere anytime soon. And like all pyramid schemes it requires an ever expanding base of people, wage slaves in this case, to keep it going. Hmmm, where could we find a large amount of wage slaves to keep SS Wall Street solvent? (Hint: rhymes with Lexico)

Ummmm, one person's Mexico is another person's China, I suppose.

 

[ash]

Ash, you made 400k last year? I think you could buy a little influence with that kind of money!

Just about 300K, so perhaps I'm only a 2 or 3%er.

Though my point is the same, that ain't enough to buy influence, UNLESS you have some really specialized interest. In other words, my only interest would be to "lower taxes", and for every dollar I spend on a political solution trying to do that, I'd certainly make less than a dollar in return.

However, if I had some very specialized interest, like say trying to remove "regulation X-425 dealing with the manufacture of a certain pesticide", perhaps my ratio of expense to return could be positive.

I don't know anyone in my income neighborhood that is buying political power, we're all working for a living. I think it takes a lot more money. A LOT MORE. But I am willing to admit that I could be naive about the whole thing, since I have no personal fascination with trying to purchase political power.

Our best year (the last one) got us to about the top 6%, from what I can tell, and we'll probably never get that high up the food chain again. Still, we didn't break above the SS cap.

I'm at the top of my game as well, probably no where to go but down from here, so I'm living well beneath my means. I am above the SS cap, so I get a nice "raise" every year in Spring though!

 

[ash]

Ummmm, one person's Mexico is another person's China, I suppose.

Either would suffice, perhaps we'll need both by 2050!

 

[laurence]

Ash, that's why the mediocre rich, like yourself join Political Action Commitees and things like that. You can afford to pool $10 grand with a thousand others' $10 grand to bribe a congressman affect change. But your point about specialized interest is well taken.

Being naive on this issue is not exactly something to hang your head about.

 

[old woman]

Maybe if we stopped giving it to people who didn't earn it. Right now people who were homemakers and never paid in a cent get as much as some who paid the maximum.
My mom only had a few months SS covered work in her life and then worked 20 years in the Post Office earning a little pension. She couldn't double dip so couldn't collect SS but after my dad died she started getting 4K a year from SS based on what she would have gotten as a housewife minus her pension. Her sister never worked that I ever heard about and she still gets SS and if she is ever widowed will get even more money. Grandma worked about 10 years in her life full time. She collected from ages 62 to 98 based on what grandpa earned.
If we are going to pay people based on someone else's earnings we should double the tax on those paying for two. You don't automatically get extra 401K or IRA money for supporting more people why should you get more SS?

 

[Spanky]

My MIL, never worked in the US, receives higher payment from SS than does her sister who worked 30 years.

 

[Tadpole]

My MIL, never worked in the US, receives higher payment from SS than does her sister who worked 30 years.

Does your MIL receive a pension from another country?

 

[Independent]

I like the idea of the game, and wish everyone who has an opinion on SS "reform" would play it once to get an idea of size of the problem. Some may be surprised that it's easier to "fix" than they had expected.

 

[aenlighten]

If indeed there is a problem

In the worst case scenario there is. In the best case there is not. Most likely it will prove to be smaller than projected. Much smaller than the war has already cost.

 

[Texas Proud]

Interesting ... I said "eliminate the SS payroll cap" and solved 93% of the problem.

Could it be THAT simple?

I wonder if they are calculating the higher benefits the people would get with the higher contributions??

 

[Texas Proud]

It strikes me that means testing social security does a real disservice to just about everybody. Of course, I haven't really thought deeply about it, so feel free to flame me - I have a thick skin

In any event, despite all the rhetoric to the contrary, SS has become a RETIREMENT program. Even the Federal government in designing the FERS system identifies SS as the third leg of the government's retirement program (basic DBP, TSP and SS). People need to be able to plan for retirement and means testing disrupts that planning. Pensions, withdrawals from IRAs, pretty much whatever - counting them against SS would destroy the basic concept.

The Dems don't want to means test... once you do that then the next step is to call it welfare... and the next step is to reduce welfare... and the next step is to eliminate welfare....

So, better to have payments to all then cut some today and possibly everybody down the road...

 

[Independent]

I'm not a dem, but I don't want a means test, either. Any means test that saves a meaningful number of dollars will need to impact the middle income workers. For some people, this will eliminate the incentive to save. "Every $1.00 I save will reduce my SS benefit by $0.50. Therefore, I'm better off spending my money today."

It will also lead to all sorts of inefficient games playing -- give your money to your kids and expect them to make gifts to you in later years, buy gold and don't declare it on your "means test form", etc.

The problem is that "getting old" is something we all expect/hope to do. There is plenty of time to arrange your finances (legally or illegally) to avoid the means test reduction.

 

[MasterBlaster]

Independent:

Don't count on a rational growth based taxation strategy. They hate anyone with more than than those poor slobs who spent all their money.

You will have to pay your "fair share" and take "what you really need".

You better get used to this logic cause it is inevitable.

 

[Mysto]

Actually, there is a means test on medicare already and (sort of ) a means test on SS as there is income testing to determine the taxable rate of your SS income.

At 32K (includes half of SS)for married filing jointly they tax 50%, and 85% for income greater than 44K.

 

[aenlighten]

The reason for the 85% taxation

is because that is how much more retirees were collecting than they paid in. With that declining drastically over the next decades, I wonder if we will see a decline in it. I doubt it. I also doubt we will see much more means testing than we already have (85% to 100%?) because it wouldn't really save much. (Yes, I believe they did include paying out higher benefits too. The wage cap is where all the money is which is why it is being resisted so desperately.)

 

[Texas Proud]

Actually, there is a means test on medicare already and (sort of ) a means test on SS as there is income testing to determine the taxable rate of your SS income.

At 32K (includes half of SS)for married filing jointly they tax 50%, and 85% for income greater than 44K.

Not quite the same thing.... this is only if it is taxable or not... not that you wil not get any at all... BIG difference..