From the President's Panel on Social Security.....

[Cut-Throat]

Just listened to a public radio program this morning. Tim Penny former Congressmen, now on the Presidents bi-partisian council for Social Security reform, was the guest.

You can see by the tone of the discussion that reform will be slow and gradual. Tim Penny also states that for anyone over 50 years of age the program will remain intact for their retirement, as there is no time to take advantage of the new reforms or for planning as they are too close to retirement.

Nothing earth shaking here folks. You can listen to the entire 1 hour program here if you wish.

http://www.publicradio.org/tools/media/player/news/midmorning/2004/12/27_midmorn1

 

[FunGoals]

Re: From the President's Panel on Social Security.

I am 54 & was hoping the cutoff would not be 55. There is a lot of potential in the next 4 years. A national sales tax instead of an income tax would encourage & reward saving. I would not mind paying 10% extra & not having to fill out tax forms.

 

[Jay_Gatsby]

Re: From the President's Panel on Social Security.

I am 54 & was hoping the cutoff would not be 55. There is a lot of potential in the next 4 years. A national sales tax instead of an income tax would encourage & reward saving. I would not mind paying 10% extra & not having to fill out tax forms.

Yes, but then the tax man would be out of a job. Besides, sales taxes seem to be relegated to the states as revenue sources. Additionally, quite a few states have income taxes as well, and they could eliminate those taxes by raising their sales taxes, but they haven't yet. Why? It's easier to chip away at people's money by using dozens of different taxes than it is to force them to pay a single tax (death by a thousand cuts). :

 

[Bob_Smith]

Re: From the President's Panel on Social Security.

Tim Penny also states that for anyone over 50 years of age the program will remain intact for their retirement, as there is no time to take advantage of the new reforms or for planning as they are too close to retirement.

Cut-Throat, thanks for posting this! I don't understand why so many view Social Security as a "bonus" when they plan for ER. They seem to expect benefits to be reduced to zero! I haven't listened to the program, but I plan to tonight. Was it your impression that age 50 is pretty solid - that nobody is even discussing 55? And what about someone who is 49? Was this guy saying they will see only a minuscule change, so that someone who is 49 will see almost as much as someone who is 50?

 

[Cut-Throat]

Re: From the President's Panel on Social Security.

Bob,

No one is talking specific details yet. As far as ages 48, 49 etc. - They are only exploring possbile solutions. And no one knows for sure how this will shake out.

This will be hammered about in Congress for many, many months before any decisions are made.

But, Tim did say in the program that those in their 50's would receive the benefits that are promised today. I think all those in Congress and the panel realize the political impossiblity of changing the program for those about to collect in the near future.

 

[Cut-Throat]

Re: From the President's Panel on Social Security.

I am 54 & was hoping the cutoff would not be 55. There is a lot of potential in the next 4 years. A national sales tax instead of an income tax would encourage & reward saving. I would not mind paying 10% extra & not having to fill out tax forms.

Be careful what you wish for! - New taxes rarely eliminate old ones.

Also for every complicated problem in the world, there is a simple solution that won't work.

 

[FunGoals]

Re: From the President's Panel on Social Security.

Less government lower taxes. The handwriting is on the wall taxes are going to be simplified its a matter of how.

All of the current taxes can stay except for the income tax. With a sales tax only there would be no tax on income, capital gains, dividends or interest which would help the economy. Just 10% more at the pump.

 

[Bob_Smith]

Re: From the President's Panel on Social Security.

This will be hammered about in Congress for many, many months before any decisions are made.

Exactly. And it is possible that they won't even be able to make the incremental changes they are discussing now. Time will tell. But it's good to hear someone on the panel is saying 50 instead of 55. I'm 52.

 

[Tadpole]

Re: From the President's Panel on Social Security.

It is funny how two people listening to the same interview hear different things. I heard him say 50 to 55 and not just 50 definitely. Naturally all that he said favored the concepts put forward in Commission results since he was a member. He also voted to create the "surplus" and now says he doesn't think the government should have to honor the IOUs. He also supported all the Bush precepts. He also want to means test further and redistribute to an increase at the low income more. I came away thinking that if all the things he wants to do were done, the members of this forum won't end up with the icing on the cake they expect. I came away thinking that these guys are nothing but con artists. They payroll taxed the middle class for years to pay for their spending parties. It sounded like an admission that private accounts are most needed because the government can't be trusted. Just one persons take on an interview. Suggest everyone listen for themselves.

Of course, he is a Humphrey employee and not a member of Congress at this point.

 

[Cut-Throat]

Re: From the President's Panel on Social Security.

It is funny how two people listening to the same interview hear different things. I heard him say 50 to 55 and not just 50 definitely.

It is funny, Because I heard him say nothing definite. If you go back and listen he said he was surmising that no one over 55 or even 50 should expect changes.

The proposals put forth that I heard were not earth shattering at all. As I said before no one, at this point can say anything definite. But, if you are a student of politics, you will know what can fly and what cannot fly.

If you read between the lines. They want to fix Social Security for the future and are willing to borrow to do it. Private Accounts are not for people in their 50s or even 40s.

 

[FunGoals]

Re: From the President's Panel on Social Security.

In the early seventies I was all for the option of not paying SS taxes. Thirty years later I am retired & 7 years & 2 months from collecting. There is talk of pushing the date out even further, reducing benefits & a means test.

I have worked for over 35 years - about half paying the maximum. Just give me a lump sum of what I paid compounded at 8%. I will invest it & start using it in 7 years or whenever.

 

[Cut-Throat]

Re: From the President's Panel on Social Security.

I have worked for over 35 years - about half paying the maximum. Just give me a lump sum of what I paid compounded at 8%. I will invest it & start using it in 7 years or whenever.

Another simple solution, that will not work.

As far as talk of pushing the date out even further, reducing benefits & a means test. All you have to do, is look at what Congress did in 1980. All of these things essentially - But not, to someone as close as you are to collecting. - Relax.

 

[FunGoals]

Re: From the President's Panel on Social Security.

There is no solution that will work for everyone & the government.

The idea could be an advantage to the government.

I contributed for over 35 years. Assuming an average of 5k a year over 30 years its 150k deposited & compounded to approximately 200k. Receiving 15k a year starting at age 62 the break even point is less than 14 years.

Give the young a choice - give everyone a choice.

Actually I do not know if I want a lump sum. There is the headache of managing it. Employers are going to lump sum pensions - it must be to their advantage.

 

[John Galt]

Re: From the President's Panel on Social Security.

No good can come from something called "The President's Bipartisan Council for Social Security Reform"

JG

 

[unclemick]

Re: From the President's Panel on Social Security.

My oldest nephew (Navy, 10 yrs, career) - in the course of reinforcing his faith in Bogle and telling him to take Bernstein with a grain of salt - he said at 31 he didn't expect to see SS. I gently pointed out that SS comes from the same well as Navy pensions - the taxpayer and the economy. In both cases something will be forthcoming - depending on the future.

 

[Michael]

Re: From the President's Panel on Social Security.

It sounded like an admission that private accounts are most needed because the government can't be trusted.

That's the one. Youngsters have seen how boomers have been betrayed, and want no part of it.

 

[sgeeeee]

Re: From the President's Panel on Social Security.

Less government lower taxes. The handwriting is on the wall taxes are going to be simplified its a matter of how.

All of the current taxes can stay except for the income tax. With a sales tax only there would be no tax on income, capital gains, dividends or interest which would help the economy. Just 10% more at the pump.

I don't follow this reasoning at all, fun. I can't understand how anyone in their 50s or within a decade of retirement could think that a transfer from income tax to sales tax would be a good thing. Think about this before you blindly support the GOP position. The amount of money required to support the government (especially after the deficit spending of the last 4 years) is not going down. So a sales tax is a transfer of taxation from the income earners to the spenders. That earner to spender transition is greatest for most people when they retire. We ERs have already paid income taxes for our entire earning years. A new sales tax is simply a way to get us to pay again.

No thanks.

 

[Bob_Smith]

Re: From the President's Panel on Social Security.

I don't follow this reasoning at all, fun.  I can't understand how anyone in their 50s or within a decade of retirement could think that a transfer from income tax to sales tax would be a good thing.  Think about this before you blindly support the GOP position.

Yep, I'd need to see the fine print, but it would probably be a killer for me. I'm looking at 10 years of close to zero income tax under the current system. There's no way I'd want a sales tax - for many reasons.

 

[FunGoals]

Re: From the President's Panel on Social Security.

We ERs have already paid income taxes for our entire earning years.  A new sales tax is simply a way to get us to pay again.

No thanks.  

Good point! I did not consider re-taxation.

 

[samclem]

Re: From the President's Panel on Social Security.

Regarding a national sales tax--
-- If we end up with a total sales tax rate (fed plus state plus local) of 20-25% or so (entirely possible), I think the underground economy will explode. With increased black marketeering will come the increase in crime/corruption/legal and incarceration costs etc that we've seen with the war on drugs.
-- A national sales tax sounds simple, but there will be complexities that someone will have to deal with (and if business has to deal with it, the costs will be passed on to consumers). Anyone familiar with the European Value Added Taxes (VAT) knows how complicated these things can become.

- A national sales tax may have some attractive features, but we need to look closely at alternatives, including simplificaton of the income tax.

samclem

 

[rockpile]

Re: From the President's Panel on Social Security.

There hasn't been a presidential commission that was ever worth a damn or accomplished anything.

 

[John Galt]

Re: From the President's Panel on Social Security.

Well said Rockpile. I agree, obviously.

JG

 

[Burch64]

Re: From the President's Panel on Social Security.

Most of my assets are post tax, I have already paid income tax on my savings at approx 25%. (Principal)

If a sales tax would go in I would pay another 22% on the principal that I have already paid tax on bringing my tax up to 47%.

Unless of course they would make some provision for post tax accounts.

Burch64

 

[bruce1]

Re: From the President's Panel on Social Security.

.

Unless of course they would make some provision for post tax accounts.

Burch64

If they do something like that watch for the knife in your back. What is done will be for their benefit but they will try to convince you that is is for yours.

 

[AltaRed]

Re: From the President's Panel on Social Security.

Which is maybe why the AARP is gearing up for a major fight on the overhaul of SS starting with about $5 million of print advertising in January as Congress re-convenes.