Obama's State of the Union speech - wealthiest seniors

[ziggy29]

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Originally Posted by Alan Isn't Medicare already means tested in that the premiums are higher once you are above a certain income

Yes, but IMO not nearly as much as it will likely be for me and those younger than me.

[Alan]

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Originally Posted by ziggy29 Yes, but IMO not nearly as much as it will likely be for me and those younger than me.

True. Currently an extra $42/mo doesn't seem much for an AGI over $170k/year for MFJ.

[Stanley]

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Originally Posted by Bikerdude The only problem was that the income limits for taxation were not indexed for inflation. They remain at 1983 levels.

I wonder how many of these tax proposals are indexed for inflation?

Can we count on the financial press to raise this question?

[ziggy29]

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Originally Posted by Stanley I wonder how many of these tax proposals are indexed for inflation?

I know the threshold for taxing "Cadillac" health plans (scheduled to start in 2018) is not indexed for inflation, so in a few years it may become the next AMT, ensnaring many people with even modest, higher-deductible plans.

[Lazarus]

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Originally Posted by ziggy29 I know the threshold for taxing "Cadillac" health plans (scheduled to start in 2018) is not indexed for inflation, so in a few years it may become the next AMT, ensnaring many people with even modest, higher-deductible plans.

As intended I am sure.

[jimnjana]

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Originally Posted by NW-Bound We can look at European countries that are destitute like Greece and Spain, where an entire young generation is wiped out by high unemployment to see where we do not want to go. Entitlements have to be cut, so that the young can survive. .

Much of the unemployment in Europe has little to do with excess government spending. Old guild rules/organized labor rules keep new enterprises from starting in the first place. Protectionism is rampant. The excess government spending is just the norm over there to begin with. The unemployed are the first ones protesting cuts in government spending.

[youbet]

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Originally Posted by explanade RMDs are only for 401ks and IRAs right? Don't most people here have far more assets in taxable accounts? .

Can't speak for "most people," but more than half of my FIRE portfolio is in 401k's and TIRA's. RMD's, just around the corner for me (I'm 65), will be a huge tax issue and a significant factor in not being able to look poor while living middle class.

[youbet]

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Originally Posted by Alan True. Currently an extra $42/mo doesn't seem much for an AGI over $170k/year for MFJ.

Spoken like a man who is not paying it...........

[ziggy29]

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Originally Posted by youbet Spoken like a man who is not paying it...........

$42 per month on $170k of income is less than 0.3% of income. You may not like paying it and you may resent having to pay it, and I'm not saying I support a steeper means testing component to Medicare, but I think an extra 0.3% of income to secure reasonably low-cost, secure health insurance is definitely *not* much, IMO.

[youbet]

Quote:

Originally Posted by ziggy29 $42 per month on $170k of income is less than 0.3% of income. You may not like paying it and you may resent having to pay it, and I'm not saying I support a steeper means testing component to Medicare, but I think an extra 0.3% of income to secure reasonably low-cost, secure health insurance is definitely *not* much, IMO.

Of course!

Everyone has at least one group they don't belong to that they feel should be taxed at higher rates, have penalties imposed or pay surcharges. It's the American way!

One of mine is DINK couples with earned income. I think they need to pay at higher rates vs. other folks. Just my opinion. The other group would be people with FIRE portfolios. Money held at an institution (bank, credit union, S&L, brokerage, etc.) should be taxed just for being there and whether it earns income or not.

Our country needs more revenue. And I think other folks should pay more. I, of course, am already paying enough.

Edit: BTW Zig, your math is incorrect on the percentage. Remember, the $170k is for a couple. You either have to double the $42/mo to account for two people or use the $85k AGI point which applies to a single. Not a big deal. But it does seem silly to quote the higher MAGI number for a MFJ return but then only account for the Part B increase for one member of the couple. It's 0.593%.

[Alan]

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Originally Posted by youbet Spoken like a man who is not paying it...........

I would love to have an MAGI >$170k while on Medicare.

Edited to change AGI to MAGI

[ziggy29]

Quote:

Originally Posted by youbet Edit: BTW Zig, your math is incorrect on the percentage. Remember, the $170k is for a couple. You either have to double the $42/mo to account for two people or use the $85k AGI point which applies to a single. Not a big deal. But it does seem silly to quote the higher MAGI number for a MFJ return but then only account for the Part B increase for one member of the couple. It's 0.593%.

It wasn't silly, it was an oversight. Fair enough. But I suspect folks my age (and younger) will have to pay a lot more than an extra 0.6% for a couple unless we are living with a very low income. Again, I'm not saying whether I think it's right or wrong to do this, but 0.6% is no hardship for a couple making $170K.

[youbet]

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Originally Posted by Alan I would love to have an AGI >$170k while on Medicare.

So would I!

Let's face it, we all need to pay more. From your posts, you and your family seem to be enjoying a nice retirement lifestyle. Certainly you should be paying more. You can afford it. And you would still have a superior lifestyle to most.

My real bottom line in all this Alan is simply that most everyone wants others who have more to pay a higher percentage in taxes. That is, to have a more steeply graduated tax system. That is, of course, as long as the steeper graduations start just above oneself!

We all feel that way. I try not to and I try to pay my own way not counting on the "wealthy" to cover for us. Still, it's a hard part of human nature to overcome and I understand.

Edit: BTW Alan, I think the Medicare surcharges are based on MAGI, not AGI. Not a big deal.

[Texas Proud]

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Originally Posted by jimnjana Much of the unemployment in Europe has little to do with excess government spending. Old guild rules/organized labor rules keep new enterprises from starting in the first place. Protectionism is rampant. The excess government spending is just the norm over there to begin with. The unemployed are the first ones protesting cuts in government spending.

I do not know if this stmt is true or not... but, if it is true then I would bet that the young folks would be the loudest in changing those old guild rules/organized labor rules IF they were not getting some kind of gvmt assistance...

Just a thought....

[ziggy29]

Quote:

Originally Posted by youbet My real bottom line in all this Alan is simply that most everyone wants others who have more to pay a higher percentage in taxes. That is, to have a more steeply graduated tax system. That is, of course, as long as the steeper graduations start just above oneself!

I think we all know darned well that most folks support making tough choices about taxes and spending.... until it's their taxes or spending programs that are on the block. Then the screaming of bloody murder starts.

It feels like almost everyone thinks they should be a sacred cow and spared the pain that everyone else has to share. And as long as we continue that mindset which creates an "us against them" dynamic, nothing's gonna change there...

[Lazarus]

My objection is changing the rules that I have been planning under. Not enough time to compensate when you are older.

[youbet]

Quote:

Originally Posted by ziggy29 But I suspect folks my age (and younger) will have to pay a lot more than an extra 0.6% for a couple unless we are living with a very low income.

Well, someone will have to pay and clearly it shouldn't be me. With youth on your side, it should be no problem to prepare for and pay the piper as necessary.

Just funning ya Zig.........

There's a little rhyme folks toss out about who should be paying more taxes. It has something to do with the "guy behind the tree" paying more. I can't remember it. Maybe someone will chime in and remind me of how it goes.

[ziggy29]

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Originally Posted by Lazarus My objection is changing the rules that I have been planning under. Not enough time to compensate when you are older.

I agree, and I think there should be a sliding scale to account for this.

What I don't want to see are "lines in the sand" that say "Age X, no change; Age X-1, full brunt of the change."

I also have a problem with a blanket exemption for folks above a certain age without regards to their means. I don't think that a middle class 30-something or 40-something should get a much worse deal from SS and Medicare reform when a retired CEO doesn't have to share the pain at all just because they are over some "magic number" (they don't *need* to "compensate" for anything, most likely). But that's just me and I suspect that's a lightning rod issue here, so I'll leave it at that.

[Alan]

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Originally Posted by youbet So would I! Let's face it, we all need to pay more. From your posts, you and your family seem to be enjoying a nice retirement lifestyle. Certainly you should be paying more. You can afford it. And you would still have a superior lifestyle to most. My real bottom line in all this Alan is simply that most everyone wants others who have more to pay a higher percentage in taxes. That is, to have a more steeply graduated tax system. That is, of course, as long as the steeper graduations start just above oneself! We all feel that way. I try not to and I try to pay my own way not counting on the "wealthy" to cover for us. Still, it's a hard part of human nature to overcome and I understand. Edit: BTW Alan, I think the Medicare surcharges are based on MAGI, not AGI. Not a big deal.

The Medicare premiums are less than a 1/3 of what we pay now, and we still have excellent retiree HI. We have a great retirement lifestyle and our MAGI is nowhere near $170k/year. That is why an extra $84/mo at that income level doesn't seem much to me.

[Lazarus]

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Originally Posted by ziggy29 I agree, and I think there should be a sliding scale to account for this. What I don't want to see are "lines in the sand" that say "Age X, no change; Age X-1, full brunt of the change." I also have a problem with a blanket exemption for folks above a certain age without regards to their means. I don't think that a middle class 30-something or 40-something should get a much worse deal from SS and Medicare reform when a retired CEO doesn't have to share the pain at all just because they are over some "magic number" (they don't *need* to "compensate" for anything, most likely). But that's just me and I suspect that's a lightning rod issue here, so I'll leave it at that.

I don't disagree but I don't think there are enough retired CEO's to tax to make much difference.