Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 02-27-2012, 08:57 AM   #41
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
The creditworthiness of the US is based on meeting all obligations, not just those issued to some. It does not matter what the obligations are called or if they are issued to foreign govt's, pension funds or the SS trust. If the US gov't reneged on it's promise to the trust that would affect all US Treasury borrowing.
__________________

__________________
MichaelB is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-27-2012, 09:06 AM   #42
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by beowulf View Post
The easiest and fasted way to solve the SS problem (not Medicare or Medicaid) is simply to eliminate the cap on OASDI. That is means testing at the start of the pipeline, not at the end when you get benefits. I don't know where I have seen the exact numbers, but eliminating the cap will insure adequate funding for SS for the next 75 years, if not more. We are not talking about just taxing billionaires more, of whom there are a very limited number, but of everyone who makes more than the current cap (which is $110,100 for 2012)....
Quote:
Originally Posted by clifp View Post
I wonder about this, because so much of the top 1% income comes from capital gains and not income. For instance Buffett with 100K salary, nor Jobs with his $1 would be impacted at all by removing the cap. Anyway I'd be interested in seeing some data on this because with a quick Google I couldn't how much total revenue was collected by the current medicare tax.
The SS actuaries have done calculations on a wide variety of proposals. You can access their results here: Individual Changes Modifying Social Security

This particular one is either E2.1 (if there is no impact on benefits) or one of the remaining E2.x options depending on how you impact benefits.

(Note that the tax would still apply to "earnings" only, which in this context excludes all forms of investment income.)

In the most aggressive case, immediate tax increase, no benefit increase, the projections still show annual deficits starting in 2025. But, they are small relative to the Trust Fund. So this particular fix is significant, but whether it is adequate by itself depends on your view of the Trust Fund.
__________________

__________________
Independent is offline  
Old 02-27-2012, 09:50 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,271
nevermind, someone else already posted what I said...
__________________
Texas Proud is offline  
Old 02-27-2012, 09:52 AM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
The real problen entitlement, Obamacare notwithstanding, is Medicare. Medicare will bankrupt us way faster than SS, IMHO..............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline  
Old 02-27-2012, 10:37 AM   #45
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by Khufu View Post
The national conversation should be focused on why investment income, i.e. the income enjoyed almost exclusively by the richest segment of the society, is specially privileged. That's certainly where I would start. Not just capital gains, but dividends, inheritance, the whole apparatus that has enable the US to be the most highly polarized in terms of wealth of any of the advanced economies.
That gets into the whole capital versus labor taxation issue. The theory goes that capital is incredibbly mobile while labor is not. When capital gets heavily taxed it tends to move on to better venues. Some think that to tax capital heavily is to invite economic suicide.

Taxing capital less ... Fair - well probably not. Smart - yes probably it is.
__________________
MasterBlaster is offline  
Old 02-27-2012, 10:53 AM   #46
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by FinanceDude View Post
The real problen entitlement, Obamacare notwithstanding, is Medicare. Medicare will bankrupt us way faster than SS, IMHO..............
So again...

If big downward changes to Medicare are inevitably coming. Why would Social Security remain as it is?

When the changes come Social Security will be "robbed" to help pay for the needed Medicare reductions.

Those that think Social Security (and everything else) will get off unscathed are mistaken.
__________________
MasterBlaster is offline  
Old 02-27-2012, 12:12 PM   #47
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by MasterBlaster View Post
That gets into the whole capital versus labor taxation issue. The theory goes that capital is incredibbly mobile while labor is not. When capital gets heavily taxed it tends to move on to better venues. Some think that to tax capital heavily is to invite economic suicide.

Taxing capital less ... Fair - well probably not. Smart - yes probably it is.
We should tax people, not "capital". Suppose we collect FICA tax on all US citizens' investment income, regardless of where it is earned. Then, there is no incentive to invest elsewhere.
__________________
Independent is offline  
Old 02-27-2012, 12:26 PM   #48
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by scrabbler1 View Post
Raising the cap on income is a phony and unfair solution. It doesn't solve the problem and breaks the tenuous link between earnings and benefits.

.....

No cap on the Medicare portion because the benefit is not tied to wages or taxes paid into the program.
I'm fine with "breaking the tenuous link" - it's already, well, pretty tenuous.

Medicare benefits don't vary based on the taxes each of us paid. I don't see any reason to continue varying SS benefits by past income, either.
__________________
Independent is offline  
Social Secuirity included in total debt
Old 02-27-2012, 12:37 PM   #49
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,689
Social Secuirity included in total debt

__________________
Running_Man is offline  
Old 02-27-2012, 12:46 PM   #50
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Quote:
Originally Posted by Independent View Post
We should tax people, not "capital". Suppose we collect FICA tax on all US citizens' investment income, regardless of where it is earned. Then, there is no incentive to invest elsewhere.
So now all you need do is define "investment" income.

The less you know about this stuff the easier it is to solve.
__________________
MasterBlaster is offline  
Old 02-27-2012, 12:52 PM   #51
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,863
Quote:
Originally Posted by Independent View Post
I'm fine with "breaking the tenuous link" - it's already, well, pretty tenuous.

Medicare benefits don't vary based on the taxes each of us paid. I don't see any reason to continue varying SS benefits by past income, either.
You may be fine with turning SS into a welfare program, but not everyone else is. And that major change to the underlying structure of the program would need a pretty big national debate.

And Medicare benefits were never intended to vary based on taxes paid into the program. They are based on how sick someone gets and how much covered treatment that person receives. SS is a wage income replacement program, so what someone receives in benefits is based, albeit loosely sometimes, upon what someone paid into the program. I stopped paying SS taxes 3 years ago (after I ERed), so my projected benefit will be lower than it would have been had I kept working (which is perfercly reasonable and fine with me) . But my Medicare benefits, once I become eligible for them, will not be tied to my prior wage earnings. I may remain healthy (hopefully) and never collect a dime from Medicare. Or I may become ill (hopefully not) after I reach Medicare eligibility age and make many Medicare claims.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline  
Old 02-27-2012, 12:58 PM   #52
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Social Security as pension, or SS as welfare. Define that and you are almost home in solving the problem.

Original intentions for SS and Medicare don't seem very important when the payments go through the roof and you can't borrow or tax to get additional money. What we need (really) is a plan for what we should do now and into the future.
__________________
MasterBlaster is offline  
Old 02-27-2012, 01:16 PM   #53
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,445
Thanks for the lively discussion
__________________

__________________
MichaelB is offline  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
31 year old, married with two young kids, looking to FIRE in 5 years alexbalex Hi, I am... 52 03-19-2012 03:17 PM
Trying to scale back...a little at a time BigE FIRE and Money 32 03-07-2012 09:55 PM
Reasons NOT to worry about political risk to SS Khufu FIRE and Money 52 02-27-2012 01:16 PM
Philosophical question about funds vs. stocks Finance Dave Stock Picking and Market Strategy 20 02-26-2012 09:05 PM
VHS to DVD easysurfer Other topics 15 02-25-2012 11:11 AM

 

 
All times are GMT -6. The time now is 10:34 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.