Why rich guys want to raise the retirement age

[Midpack]

If all wealth could be redistributed in the US how much would that make for each of us? I am not sure how to figure it. GDP/Population?

Isn't the average wealth what we'd all have if total wealth was redistributed equally among everyone? That number is published all the time Wealthiest Americans have 288 times net worth of typical family - Sep. 11, 2012

 

[imoldernu]

Was a bit surprised that there was no comment on the point about wealth tax.

The CSpan story was a discussion on this. Pros and Cons laid out here:
Wealth tax - Wikipedia, the free encyclopedia

Mentioned before... the proposal didn't even tax below $2 Million and then well below 1%.

Note the Donald Trump proposal for a once off tax on Worth above $10 million, to raise nearly $6 Trillion.

 

[NW-Bound]

I clicked on the link, but did not see how each of us would have if everything anyone has is divided equally.

But in searching for that number myself, I ran across a Web page that contained this excerpt.

In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous. But when the Soviet Union confiscated the wealth of successful farmers, food became scarce. As many people died of starvation under Stalin in the 1930s as died in Hitler's Holocaust in the 1940s.

How can that be? It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth -- and that future wealth is less likely to be produced when people see that it is going to be confiscated. Farmers in the Soviet Union cut back on how much time and effort they invested in growing their crops, when they realized that the government was going to take a big part of the harvest. They slaughtered and ate young farm animals that they would normally keep tending and feeding while raising them to maturity.​

 

[HFWR]

...but most of the liberals work or worked or are married or related to someone who is on a government payroll. Most of the conservatives pay more than they get or ever will get...

Ha

America's fiscal union: The red and the black | The Economist

"Thanks for the extra taxes but screw you when it comes time for any extra benefits due to the extra income used to pay those taxes."

Though there are a number of regular CNBC guests, Ken Langone of Home Depot fame comes to mind, who think it's a good idea. He says he donates his SS check to charity.

 

[Lazarus]

Isn't the average wealth what we'd all have if total wealth was redistributed equally among everyone? That number is published all the time Wealthiest Americans have 288 times net worth of typical family - Sep. 11, 2012

Looks like the article says median wealth for a family is about $73K. But how would we figure the holdings of the Government like land an minerals and that of corporations into the formula?

If 73K is the number then no one could FIRE at all.

 

[NW-Bound]

America's fiscal union: The red and the black | The Economist

The ratio of federal spending in a state to federal taxes raised in the same state was brought up before, and I found it interesting. However, I have not found further info on what that federal spending is for.

One might have thought that the federal spending was all for welfare or aid to people in those states, but is it really? Is there a breakout of what that federal spending is for, such as the cost of managing the national forests, national parks, BLM land, Indian land, defense installations and bases, etc...?

 

[Lazarus]

The ratio of federal spending in a state to federal taxes raised in the same state was brought up before, and I found it interesting. However, I have not found further info on what that federal spending is for.

One might have thought that the federal spending was all for welfare or aid to people in those states, but is it really? Is there a breakout of what that federal spending is for, such as the cost of managing the national forests, national parks, BLM land, Indian land, defense installations and bases, etc...?

One thing that comes to mind is spending on the interstate highway system. Some states are much larger in area and have many more miles of highway to maintain even though their population is much lower.

 

[NW-Bound]

A way to keep older people employed, for those who want or need to work, should be that their compensation is commensurate with their ability. If their ability is reduced due to age, they should be paid less compared to what younger people get.

The Economist had a few articles on how some European countries had laws to protect the older workers, but at a serious detriment to their younger generations who were underemployed and underpaid. Nations have never survived when people cannibalize their youth.

 

[imoldernu]

Back to Wealth Tax... Have to get by knee jerk reaction that a wealth tax means an even redistribution of wealth and that it would apply to any one of us. Donald Trump's suggestion only applied to those with a net worth of more than $10 million... and that it was a one time tax... (1999) to reduce the US Debt to zero. The tax would have been 14.7%... BTW... not a Trump fan.

My own thinking revolves around the thought that the inheritance tax protection should not go beyond an amount that would provide financial independence for the members of the current and second generation family.
(Thinking in terms of perhaps $5 - $7 million per person in that group.)

 

[HFWR]

The ratio of federal spending in a state to federal taxes raised in the same state was brought up before, and I found it interesting. However, I have not found further info on what that federal spending is for.

One might have thought that the federal spending was all for welfare or aid to people in those states, but is it really? Is there a breakout of what that federal spending is for, such as the cost of managing the national forests, national parks, BLM land, Indian land, defense installations and bases, etc...?

I'm still a w*rking stiff; one of you FIREd types with too much time on your hands should report back...

Whattaya do all day?

 

[Midpack]

One might have thought that the federal spending was all for welfare or aid to people in those states, but is it really? Is there a breakout of what that federal spending is for, such as the cost of managing the national forests, national parks, BLM land, Indian land, defense installations and bases, etc...?

Unless you mean federal funds spent in each state, federal spending info is readily available. You can readily see discretionary spending (other than defense) is relatively small. When people throw up foreign aid, national parks, the arts, etc. as ways to reduce deficits/debt - I wonder if they've ever looked at how relatively small those expenses are - even taken together? Doesn't mean they shouldn't be scrutinized, but they won't begin to fix our deficit spending issue. And the cost detail for any category can be found in seconds with Google.

 

[Chuckanut]

I see no reason why older folks can't work at big-box retail stores until they retire at 70 or 72. Or work evenings emptying the trash cans at investment banks.

 

[ERD50]

Back to Wealth Tax... Have to get by knee jerk reaction that a wealth tax means an even redistribution of wealth and that it would apply to any one of us. Donald Trump's suggestion only applied to those with a net worth of more than $10 million... and that it was a one time tax... (1999) to reduce the US Debt to zero. The tax would have been 14.7%... BTW... not a Trump fan.

Interesting (I didn't check the math, but assuming it is correct), I have to wonder if that is workable. How much of that wealth is tied up in non-liquid assets? Sell off farms and businesses? Even the liquid ones could be an issue. Could Gates sell 15% of his MS stock w/o causing a drop in the market?


edit/add: of course the debt would start to grow again - how long before the call for another 'one-time' wealth tax?

-ERD50

 

[Katsmeow]

Agreed, a glaring omission as is too often the case when raising the payroll tax cap is mentioned.

Well, I posted a link to a proposed bill where the payroll tax cap is raised but benefits for those it is raised on do go up. I don't actually see that as being unfair.

 

[Midpack]

Agreed, a glaring omission as is too often the case when raising the payroll tax cap is mentioned.

Well, I posted a link to a proposed bill where the payroll tax cap is raised but benefits for those it is raised on do go up. I don't actually see that as being unfair.

The article the OP linked to did not, that's a "glaring omission" IMO. What happens to top benefits makes a huge difference...another example of talking about spending with revenue or vice versa. Useless.

 

[NW-Bound]

I'm still a w*rking stiff; one of you FIREd types with too much time on your hands should report back...

Whattaya do all day?

Man, even a FIREd guy likes me finds myself posting too much sometimes. I often log off to prevent myself from spending too much time here, but then make a mistake to check and see that someone has made a reply, then have to log back in. Like right now.

PS. I logged off, then just logged back in to fix a grammatical error. I hate it when I made an error like that. Logging back off again now.

Unless you mean federal funds spent in each state, federal spending info is readily available. You can readily see discretionary spending (other than defense) is relatively small. When people throw up foreign aid, national parks, the arts, etc. as ways to reduce deficits/debt - I wonder if they've ever looked at how relatively small those expenses are - even taken together? Doesn't mean they shouldn't be scrutinized, but they won't begin to fix our deficit spending issue. And the cost detail for any category can be found in seconds with Google.

Yes, the spending categories that are mentioned above are relatively small. My point was that for states with only a couple of millions of residents, they may skew the statistics.

Even if federal spending in a state is directly for the benefits of the state residents such as SS and Medicare, is it that state's fault that retirees from other areas of the country flock there for their retirement?

What I am trying to say is that statistics may show something that appears obvious, but if we dig further, it is no longer that simple.

 

[ChrisC]

ChrisC, spousal benefts are based on the other spouse's earnings. I still claim that SS is an income replacement program, even if you don't agree with that.

BTW I am not a high-income earner. I am an early retiree who has not paid a dime in FICA taxes in 4 years. My wage income never exceeded the cap so I am in no way affected by a change to the cap for taxation purposes. As much as I like to "soak the rich," I do have my limits. And this is one of them.

Yes, but legislative determinations to add benefits for spouses and children, though those benefits might be based on wage earner income of the primary beneficiary, simply represent social welfare policies to enhance the financial condition of the family. My point in this is that your irritation about lifting the cap appears to be based on a "transactional view" of the Social Security program as solely an income replacement benefit program for taxpayers based on payroll taxes paid into the system, when I think of it otherwise.

There's a lot going on with "fairness" in Social Security beyond income replacement. Clearly, you know that the first bend point clearly favors the lower wage income earner by design. Yet, I think it was Milton Freidman who once postulated that Social Security discriminates against lower wage income earners and minorities because these groups tend to have shorter life expectancies and generally pay into a system which they disproportionately as a group are not able to fully take advantage; wasn't it Freidman who once argued that Social Security effected a wealth distribution from poor, lower wage earners to rich guys?

I agree to disagree with you on how we each view the program.

BTW, we're high wage income earners that would be affected by lifting the cap; I'm in favor of paying more taxes, including additional income and estate taxes. I'm not in favor of raising the retirement age.

 

[ERD50]

There's a lot going on with "fairness" in Social Security beyond income replacement. ....

I agree to disagree with you on how we each view the program.

And this is my problem with any discussion of SS. It is some odd combination of insurance, welfare, and a retirement plan with higher earners getting more (in absolute terms, not in 'investment return').

IMO, we should have a retirement plan, an insurance plan, and a safety net plan, and they should be separate. This co-mingling makes it difficult to analyze.

BTW, we're high wage income earners that would be affected by lifting the cap; I'm in favor of paying more taxes, including additional income and estate taxes.

BTW, no one is stopping you or the many like-minded people who express this sentiment.

Government - Gift Contributions to Reduce Debt Held by the Public

-ERD50

 

[HFWR]

Or work evenings emptying the trash cans at investment banks.

Social Security History

As colonial America grew more complex, diverse and mobile, the localized systems of poor relief were strained. The result was some limited movement to state financing and the creation of almshouses and poorhouses to "contain" the problem. For much of the 18th and 19th centuries most poverty relief was provided in the almshouses and poorhouses. Relief was made as unpleasant as possible in order to "discourage" dependency. Those receiving relief could lose their personal property, the right to vote, the right to move, and in some cases were required to wear a large "P" on their clothing to announce their status.

So, should retirees have to wear an "R"?

 

[scrabbler1]

Yes, but legislative determinations to add benefits for spouses and children, though those benefits might be based on wage earner income of the primary beneficiary, simply represent social welfare policies to enhance the financial condition of the family. My point in this is that your irritation about lifting the cap appears to be based on a "transactional view" of the Social Security program as solely an income replacement benefit program for taxpayers based on payroll taxes paid into the system, when I think of it otherwise.

What I said is that one's benefits are based on one's wage income below the cap, not based on payroll taxes paid into the system. The benefit formula does not include payroll taxes paid because the payroll tax rate and cap have varied over the years, especially prior to ~1984. The benefit formula replaces wage income below the cap, you can't escape that fact. Eligibility to collect benefits does not always require having had wage income (i.e. survivors, spousal), and I am fine with that. I also agree with ERD50 when he describes the program as a combination of various elements such as a "national" disability program, a "national" life insurance program, and a "national" pension program, and things get muddled when describing it as only one of them at the exclusion of others.

There's a lot going on with "fairness" in Social Security beyond income replacement. Clearly, you know that the first bend point clearly favors the lower wage income earner by design. Yet, I think it was Milton Freidman who once postulated that Social Security discriminates against lower wage income earners and minorities because these groups tend to have shorter life expectancies and generally pay into a system which they disproportionately as a group are not able to fully take advantage; wasn't it Freidman who once argued that Social Security effected a wealth distribution from poor, lower wage earners to rich guys?

I agree to disagree with you on how we each view the program.

BTW, we're high wage income earners that would be affected by lifting the cap; I'm in favor of paying more taxes, including additional income and estate taxes. I'm not in favor of raising the retirement age.

There are offsetting effects on lower wage earners versus higher wage earners. Lower wage earners will have a greater percentage of their wage income replaced by SS but not collect benefits as long, while higher wage earners will have a lesser percentage of their wage income replaced by SS but collect benefits longer. It would be interesting to see which effect dominates.

 

[ChrisC]

BTW, no one is stopping you or the many like-minded people who express this sentiment.

Government - Gift Contributions to Reduce Debt Held by the Public

-ERD50

Oh, I could tell that one was coming. And I'm always amused by it. It's really an off-topic discussion but if you want to start another thread about contributions to charities and the government, please feel free to do so and I'll join in the discussion.

My point in mentioning my own particular situation was to rebut the idea raised by one or two others in this thread that the discussion of Social Security issues is primarily driven by self-interest. Both my give and take with Scrabbler1 shows that it's not generally the case.

 

[scrabbler1]

My point in mentioning my own particular situation was to rebut the idea raised by one or two others in this thread that the discussion of Social Security issues is primarily driven by self-interest. Both my give and take with Scrabbler1 shows that it's not generally the case.

On this point I do agree with you. I would not be affected at all if the payroll tax cap were raised even though I oppose it. I would be affected (eventually) if SS benefits became fully taxable, something I favor.

 

[ERD50]

Oh, I could tell that one was coming. And I'm always amused by it. It's really an off-topic discussion but if you want to start another thread about contributions to charities and the government, please feel free to do so and I'll join in the discussion.

I'd love to, and would like to know why you find it so amusing. But that thread would be shut down in no time, so I guess I'll have to leave it at that.

-ERD50

 

[imoldernu]

I always wonder whether posting an opinion article is being too controversial...
this one seems to fit in to the "rich guys" part of the discussion.

Ten Numbers the Rich Would Like Fudged | Alternet

Even if I had five or ten million, (which I surely don't...), I don't think I'd be in the "rich" category as defined in the article.

 

[HFWR]

I suppose we could argue theoreticals 'til the cows come home, but at some point compromises need to be made, and the problems REALLY solved...