U Mich profs propose SS tax cut at age 55

[donheff]

A couple of professors say if we paid one percent more in payroll taxes until we were 55 we could stop payroll taxes at 55 giving workers an effective pay raise. The one percent would keep SS on track (presumably the current unsustainable track) but the pay raise would increase income taxes and motivate workers to keep working for a couple of more years thus reducing the deficit. Interesting concept: Why retire later?

 

[skipro3]

They collect enough today if they'd just spend it on the original purpose they are collecting it for.

No new taxes. Elected officials can not be trusted with the money they collect today. No way should they be trusted with even more.

 

[photoguy]

When implemented wouldn't this HUGELY benefit the folks over 55 who never had to pay the additional 1% when younger?

 

[ziggy29]

When implemented wouldn't this HUGELY benefit the folks over 55 who never had to pay the additional 1% when younger?

Pretty much every SS tax hike ever enacted does this. And I think we all know, right or wrong, fair or not, the odds are very high that SS "reforms" will disproportionately screw younger folks.

 

[samclem]

To lessen the "good deal" for current oldsters, it could be phased in so that the elimination of the payroll tax starts at, say, age 70 and progressively gets earlier as folks have been paying the extra tax longer.

But the bigger question is why paying more tax earlier in their working lives (when they aren't in their peak earning years and have kids to send to school, first homes to buy, etc) would be popular with voters. It won't be.

I think this idea is probably running against the grain of current popular thought. There's not much faith in intergenerational equity right now, and that organizations (government, big business, etc) will keep their word for several decades. In that kind of environment, people will take the bird in the hand.

"Hey, people are quitting work and enjoying the last part of their lives without employment--and paying low taxes. Low taxes! How can we change that behavior? Tax them a lot in the early years, promise they can keep more of the money they earn sometime in the future."

 

[Chuckanut]

This idea makes about as much sense as charging young couples with a few kids $10 a night to tent camp in a national park, while allowing a couple over 65 with a $50,000 motor home to camp at a discount.

Why would anybody do such a strange thing?

 

[REWahoo]

Why would anybody do such a strange thing?

For the same reasons kids under age 12 get in free...

 

[ziggy29]

This idea makes about as much sense as charging young couples with a few kids $10 a night to tent camp in a national park, while allowing a couple over 65 with a $50,000 motor home to camp at a discount.

Why would anybody do such a strange thing?

Because the young couples with a few kids don't vote.

 

[clifp]

This idea makes about as much sense as charging young couples with a few kids $10 a night to tent camp in a national park, while allowing a couple over 65 with a $50,000 motor home to camp at a discount.

Why would anybody do such a strange thing?

The kids are free or cheaper makes sense for things like restaurants where their portion size is smaller, same thing for senior specials.

But in general I find age pricing to be mildly offensive. (Not so offensive that I won't leap to take advantage of it ) If private business want to offer it for whatever marketing reasons I have no problems, however when the Government does it, I have a real problem. Especially when it is for something has expensive as Social Security.

 

[haha]

The kids are free or cheaper makes sense for things like restaurants where their portion size is smaller, same thing for senior specials.

But in general I find age pricing to be mildly offensive. (Not so offensive that I won't leap to take advantage of it ) If private business want to offer it for whatever marketing reasons I have no problems, however when the Government does it, I have a real problem. Especially when it is for something has expensive as Social Security.

The purpose of the state is to take from some, and give to some others, according to the personal needs and strategies of those in power. Why is age any more offensive than any other dimension on which boons or penalties are granted and levied?

At least each of us has a shot of getting to whatever the age in question is. Less true for sex or national origin or race or whatever other discriminator is being applied.

Ha

 

[NW-Bound]

It's the age-old (pun not intended) reason.

“All animals are equal, but some animals are more equal than others.” ― George Orwell, Animal Farm

 

[clifp]

The purpose of the state is to take from some, and give to some others, according to the personal needs and strategies of those in power. Why is age any more offensive than any other dimension on which boons or penalties are granted and levied?

At least each of us has a shot of getting to whatever the age in question is. Less true for sex or national origin or race or whatever other discriminator is being applied.

Ha

Not surprisingly I am not huge believer that wealth transfer is the primary function of government. I recognize that at times it is a necessary function.

But in general I think these transfers should be based on need rather than any other factor.

So I'd rather see the free camping be given to a bunch of special needs kids in foster homes, than senior citizens.

 

[gerntz]

The purpose of the state is to take from some, and give to some others, according to the personal needs and strategies of those in power.

What section of the Constitution is this listed in?

 

[photoguy]

What section of the Constitution is this listed in?

Constitution of the United States - Page 2

Article I, Section 8.

 

[haha]

What section of the Constitution is this listed in?

If you think that the constitution elucidates the purpose of government, you are scratching the surface. What you governments everywhere always end up doing? Taking from some, and giving to others, according to the needs of those in power. If this is what they always do, this must be what they are truly about, no mater what PR is contained in documents or speeches.

And ClifP, note that I said nothing at all about the needs of those who are being given to- it is always and only about the needs of those in power. Mainly staying in power.

 

[Hiredgun]

+1 Haha

 

[BOBOT]

No new taxes. Elected officials can not be trusted with the money they collect today. No way should they be trusted with even more.

The purpose of the state is to take from some, and give to some others, according to the personal needs and strategies of those in power. ....

Ha

Well, I would propose that the function of government is to secure and provide for the common good, and that taxes are the means to that end (I am not saying that the ideal is always lived up to).

If you don't buy that, than what would you suggest to deal with this problem?

(Apologies to donheff for contributing to the hijack of his thread.)

 

[haha]

I guess everybody looks a the evidence and decides for himself what is the de facto real purpose of government. High School civics gives your definition.

To me, there is almost no evidence that the "common good" has ever been the purpose of any sample of governments for any considerable length of time.

This appears to be true of national governments, state governments, municipalities, port commissions- people are always mainly interested in their own ends and well being.

I believe that even a casual acquaintance with history would uphold this.

Ha

 

[donheff]

I still buy that we defined the purpose of our national government in the preamble:

"form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,"
​

The fact that individuals fall short in the implementation doesn't change the purpose we have defined for ourselves. For that we need a real amendment - defacto doesn't do it.

 

[travelover]

I think that this tread has drifted off into a philosophical argument over the purpose of government. I believe the OP was about a modification to SS funding.

 

[NW-Bound]

OK, I will get back to the OP's article.

A couple of professors say if we paid one percent more in payroll taxes until we were 55 we could stop payroll taxes at 55 giving workers an effective pay raise. The one percent would keep SS on track (presumably the current unsustainable track) but the pay raise would increase income taxes and motivate workers to keep working for a couple of more years thus reducing the deficit.

Wow! One 1% raise at the age of 55. Why do I think the youngsters may just revolt and join the "Occupy Every Place" movement if we adopt this? And then, would any of the people here on this forum work a few more years because of this 1%?

Is it like "I will beat you, so that when I stop, you will feel really good"?

I say, tax if you have to, but tax them past 55, and tax them all the way. No leniency for working geezers or preferential treatment over the kiddos.

 

[samclem]

Wow! One 1% raise at the age of 55.

No, it would be a 5.2% "raise" (the present SS tax paid directly by the employee is 4.2%, so if we increased it by 1% it would be 5.2%).

But, I agree that younger folks might take to the streets over this. Well, the ones who have jobs or hope to have them someday.

 

[NW-Bound]

OK, my mistake. The article talks about stopping the tax altogether at 55, and not about cutting out just the 1% as I thought. That 5.2% is a bit more worthwhile.

Still, how is it going to be phased in for older people? If I were still working (I am past 55), I would not mind having an immediate benefit out of this law. Meanwhile, the kiddos will have to pay even more, so that I can be sure of collecting SS just around the corner. Nice, nice...

Is it fair to the youngsters? Does anyone ask them? Oh, I know, they do not vote. Serve them right!

PS. I should have read the original article. See the following excerpt. How do they arrive at the 10.6% raise?

By eliminating social security payroll taxes starting when workers are 55-years-old, the study shows that people's take-home pay would jump by 10.6 percent and they would work 1.5 years longer on average...​

 

[ERD50]

I still buy that we defined the purpose of our national government in the preamble:

"form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,"
​

The fact that individuals fall short in the implementation doesn't change the purpose we have defined for ourselves. For that we need a real amendment - defacto doesn't do it.

I'm pretty sure that what haha is addressing is the reality, how things really work, rather than what is written, or the stated purpose of government.

And I'd be hard pressed to disagree with him on that, as much as I'd like to.

Heck, the Declaration of Independence stated that "We hold these truths to be self-evident, that all men are created equal," - did that make it so?

-ERD50

 

[haha]

I'm pretty sure that what haha is addressing is the reality, how things really work, rather than what is written, or the stated purpose of government.

And I'd be hard pressed to disagree with him on that, as much as I'd like to.
Heck, the Declaration of Independence stated that "We hold these truths to be self-evident, that all men are created equal," - did that make it so?
-ERD50

This is exactly what I meant, ERD50. It boils down to one's personal epistemology. I follow H.I Hayakawa, that what is stated in words has little meaning in the real world, what has meaning is the actions that are taken. From the actions one can by inference gain knowledge of the practical meaning of the words.

The part you quoted from the Declaration of Independence is typical. When these words were written, were all men equal? Check something as simple as voting rights.

Ha