social security proposal

[athena53]

Myers didn't like the taxation of SS benefits - that broke one of his principles - heard him say that in a PD session

Yep-I met him once and he said the same thing- anything that made SS needs-based (and that would include taxing benefits because you have other sources of income) would discourage people from saving.

 

[jimnjana]

"Fixing" SS seems so simple to me. (Of course, what do I know...)

Keep SS the same for those over 50.
Stop the deduction cap.

I agree. I would also return the income tax on taxed social security back to the social security trust fund.

 

[Mulligan]

Before they start adding much needed revenue the least they could do is go back through the laws and eliminate all the freebee benefits that assist in helping suck the SS teat dry. Like that "Viagra Trust Fund" for example....That is the most asinine rule I have heard of....Warren Buffet could marry a 35 yr old and she could drop twins and next thing you know those 3 are getting SS checks too. Blows my mind.


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[REWahoo]

Blows my mind.

Good idea. Limit those old Warren Buffet's to that and we wouldn't have to worry about paying benefits.

 

[Mulligan]

Good idea. Limit those old Warren Buffet's to that and we wouldn't have to worry about paying benefits.

Ya but he is getting his check too....Or any poor old fart that convinces some fertile young lady to marry him. I dont know what is crazier...This being part of the law, or the whacks who actually thought of this to put it in the regs to begin with.


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[Senator]

It is far better off to print the money to save Social Security.

There is virtually no downside to printing 10+ trillion. The entire world is printing money, we need to print it just as fast, on a percentage basis. We are falling behind and our USD is too strong. Jobs are being shipped elsewhere.

If we print the USD, other countries help pay if they use the USD. If they trade with us, and the USD gets weaker, their prices increase and they sell less. So, they lower prices.

At some point, we need to realize that people do not want to work until 70. I am one of hem. Paying less taxes is one reason I am leaving work. 40%+ of my wages is too much to pay. I can work for cash somewhere and make the same money with less work.

Let those that want to work, work. For me, I'm out next week.

 

[Independent]

I agree. I would also return the income tax on taxed social security back to the social security trust fund.

The 50% tax from the 1983 amendments already goes into the "trust fund".

It is also important to note that funds raised under this provision do not go into the General Fund of the Treasury but into the Social Security Trust Funds.

https://www.ssa.gov/history/taxationofbenefits.html

Skimming a little further, it looks like the additional 35% in 1993 goes to Medicare.

 

[ownyourfuture]

I always thought it was ironic that SS could run out of money, yet other government programs never run out.

Me too.

 

[Greencheese]

It is far better off to print the money to save Social Security.

There is virtually no downside to printing 10+ trillion. The entire world is printing money, we need to print it just as fast, on a percentage basis. We are falling behind and our USD is too strong. Jobs are being shipped elsewhere.

If we print the USD, other countries help pay if they use the USD. If they trade with us, and the USD gets weaker, their prices increase and they sell less. So, they lower prices.

At some point, we need to realize that people do not want to work until 70. I am one of hem. Paying less taxes is one reason I am leaving work. 40%+ of my wages is too much to pay. I can work for cash somewhere and make the same money with less work.

Let those that want to work, work. For me, I'm out next week.

I don't think there's ever been an issue with realizing people DON'T want to work. The question is what to do with the people who CAN'T work until 70. For all the examples of the elderly wo/man working in the office analyzing powerpoint at 80 and "enjoying themselves" there's 1 or 2 55-60 year old construction worker/roofer/etc... who simply cannot do their old job and has no skills to do anything else. Do we retain all those people at the ripe old age of 67 to be power point analyzers?

But I fully agree with not wanting to work until 70 though, as do probably 99% of workers

 

[Independent]

if you don't that breaks one of the founding PRINCIPLES of social insurance

Because "PRINCIPLES" is in caps, I assume this is an acronym. I'm not familiar with it.

I have one of Myers' thousand page books sitting on my bookshelf. He lists five principles of OASDI (but not social insurance in general):
1) benefits based on presumptive need
2) benefits provide a floor of protection
3) balance between social adequacy and individual equity
4) benefits related to earnings
5) self supporting, based on designated contributions

I like the first two, and would try to keep them in future changes to SS.
I view the other three as political accommodations to achieve passage. I'd prefer to see them fade away.

 

[Big_Hitter]

Because "PRINCIPLES" is in caps, I assume this is an acronym. I'm not familiar with it.

I have one of Myers' thousand page books sitting on my bookshelf. He lists five principles of OASDI (but not social insurance in general):
1) benefits based on presumptive need
2) benefits provide a floor of protection
3) balance between social adequacy and individual equity
4) benefits related to earnings
5) self supporting, based on designated contributions

I like the first two, and would try to keep them in future changes to SS.
I view the other three as political accommodations to achieve passage. I'd prefer to see them fade away.

I'll dig it out of my study notes from the early 90s....

 

[Yarnstormer]

My benefits will already be severely impacted by my decision to be a stay at home mom for a number of years. I would have to work until 70 to avoid a zero year already! I surely don't want more zero years added in!


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[Big_Hitter]

check out the article on page 22 - they propose feathering in a later retirement age based on income because the study on page 62 says that longevity is directly correlated with income

Contingencies - July/August 2016

 

[ProspectiveBum]

check out the article on page 22 - they propose feathering in a later retirement age based on income because the study on page 62 says that longevity is directly correlated with income

Contingencies - July/August 2016

Wouldn't raising the cap on SS income taxes accomplish this (gathering more net contributions from high-income workers) without introducing a variable FRA? Having a variable FRA sounds like it'd be a nightmare to administer.

 

[Big_Hitter]

i think they are varying the fra based on the ame so it wouldn't be that bad since the ame is a career average - raising the cap only works if you don't count that in the benefit calculation which breaks one of the principles of social insurance

 

[Big_Hitter]

if you look at that study on page 62, there is a huge disparity in life expectancy between the lowest and highest paid (for obvious reasons) - it may be more actuarially "fair" to base the FRA on income....still thinking about this

 

[ProspectiveBum]

i think they are varying the fra based on the ame so it wouldn't be that bad since the ame is a career average - raising the cap only works if you don't count that in the benefit calculation which breaks one of the principles of social insurance

I guess my thought was that by the time you hit the 3rd bend point, the payer is already getting back a much smaller return on their SS "investment". Since SS would be keeping even more of a high earner's contribution, it'd help to offset additional longevity by that cohort. High earners would still receive benefits based on their contributions, so I don't think that'd violate the principles of SS.

 

[Big_Hitter]

I guess my thought was that by the time you hit the 3rd bend point, the payer is already getting back a much smaller return on their SS "investment". Since SS would be keeping even more of a high earner's contribution, it'd help to offset additional longevity by that cohort. High earners would still receive benefits based on their contributions, so I don't think that'd violate the principles of SS.

correct it wouldn't - I don't have a problem with that at all although no one cares.....I'm just hoping to (eventually) get some of my money back

 

[Neill]

"Fixing" SS seems so simple to me. (Of course, what do I know...)

Keep SS the same for those over 50.
Stop the deduction cap.

Work out the marginal tax rate for high income earners. 39.6% + 6.2*2 + 1.45*2 + 0.9%. I get 55.8%. Good job I quit working.

 

[pb4uski]

Work out the marginal tax rate for high income earners. 39.6% + 6.2*2 + 1.45*2 + 0.9%. I get 55.8%. Good job I quit working.

[MOD EDIT]

For one thing, very few people are in the 39.6% tax bracket since it starts at $415k of TI for a single and $467k of TI for MFJ. Second, the employer pays part of the 6.2 and 1.45 so what the taxpayer pays is 48.15%, not 55.8% as you state.

[MOD EDIT] What marko proposed eliminating the cap would only change the 48.15% to 46.7% (or your 55.8% to 52.9%)... if in your mind that 1.45% (or 2.9%) causes you to cross over the line from working to not working, then so be it.

I was over the limit every year for the last half of my career but would not have minded at all if the cap had been eliminated if the result was to put the whole system on a more solid footing... not to mention then not having to hear prognosticators lament about the future problems with SS.

 

[Big_Hitter]

[MOD EDIT]

For one thing, very few people are in the 39.6% tax bracket since it starts at $415k of TI for a single and $467k of TI for MFJ. Second, the employer pays part of the 6.2 and 1.45 so what the taxpayer pays is 48.15%, not 55.8% as you state.

[MOD EDIT]What marko proposed eliminating the cap would only change the 48.15% to 46.7% (or your 55.8% to 52.9%)... if in your mind that 1.45% (or 2.9%) causes you to cross over the line from working to not working, then so be it.

I was over the limit every year for the last half of my career but would not have minded at all if the cap had been eliminated if the result was to put the whole system on a more solid footing... not to mention then not having to hear prognosticators lament about the future problems with SS.

I don't think most people making over the TWB would mind a one-time increase (over CPI) to it for shoring up benefits - I mean moving it to $200K or $250K would have about the same impact as eliminating it I'm guessing - one of the problems when it is eliminated is that the value of non-qualified benefits get taxed on that entire chunk which kinda stinks if you have non-qualified plans

 

[Neill]

[MOD EDIT]My point is that high income earners see a large increase in marginal rates. We know decisions are driven by marginal rates. It's a big deal. We would be increasing the marginal rate by 12.6% and I think that's a lot.

For one thing, very few people are in the 39.6% tax bracket since it starts at $415k of TI for a single and $467k of TI for MFJ.

So my point is wrong because not a lot of people pay the rate? Well the 12.6% applies to other rates too. It's not an argument to say it doesn't matter because few people are affected.

Second, the employer pays part of the 6.2 and 1.45 so what the taxpayer pays is 48.15%, not 55.8% as you state.

So it's not a tax because the government says that the paystub should look different as we pretend the employer pays the tax? We all know the employee pays the tax.

[MOD EDIT]What marko proposed eliminating the cap would only change the 48.15% to 46.7% (or your 55.8% to 52.9%)... if in your mind that 1.45% (or 2.9%) causes you to cross over the line from working to not working, then so be it.

It would add 12.6% to the tax bracket. Pretending some of it isn't there won't change that.

I was over the limit every year for the last half of my career but would not have minded at all if the cap had been eliminated if the result was to put the whole system on a more solid footing... not to mention then not having to hear prognosticators lament about the future problems with SS.

So now your saying that you don't mind paying it where your marginal rate likely might not be that large. After all you have said not many people pay those high rates. So nobody else can object or make decisions on this high rate because you blessed it in all your goodness.

 

[Big_Hitter]

So now your saying that you don't mind paying it where your marginal rate likely might not be that large. After all you have said not many people pay those high rates. So nobody else can object or make decisions on this high rate because you blessed it in all your goodness.

(he's retired)

 

[karen1972]

I think the biggest issue with the proposal is that it would seem a proposal like this would hurt women even more. You already have the fact women get paid less and thus already get back less in SS on average, then you add to it that many women are the majority of the care givers in their family and thus leave work form time to time to either take care of aging parents or children. I think getting in 35 years is tough for many, 40 would be near impossible unless many other changes in our society were to take place (such as more affordable day care and senior care)..which also takes $$$.

Honestly I wouldn't mind a proposal like this if it helped to shore up the less fortunate (ie so say you haven't reached the 2nd bend point, each year you keep working would only add to your benefit..almost like a bonus for working all your life thus potentially making it more feasible for you to have a retirement where you weren't constantly desperate.)

Yes you have to take off the income cap to shore it up and maybe you close some loopholes (kind of like the one they did last year). Given the system was never set up for COLA in the first place, still wondering how that was factored into solvency.

 

[Big_Hitter]

I think the biggest issue with the proposal is that it would seem a proposal like this would hurt women even more. You already have the fact women get paid less and thus already get back less in SS on average, then you add to it that many women are the majority of the care givers in their family and thus leave work form time to time to either take care of aging parents or children. I think getting in 35 years is tough for many, 40 would be near impossible unless many other changes in our society were to take place (such as more affordable day care and senior care)..which also takes $$$.

Honestly I wouldn't mind a proposal like this if it helped to shore up the less fortunate (ie so say you haven't reached the 2nd bend point, each year you keep working would only add to your benefit..almost like a bonus for working all your life thus potentially making it more feasible for you to have a retirement where you weren't constantly desperate.)

Yes you have to take off the income cap to shore it up and maybe you close some loopholes (kind of like the one they did last year). Given the system was never set up for COLA in the first place, still wondering how that was factored into solvency.

women definitely have several challenges in retirement (in and out of j*b market resulting in gaps in pension coverage, long life expectancy, spouses who make incorrect retirement elections or squander everything, the other stuff you mentioned, etc.)

however, if one pays less into SS, then one gets back more from SS than they otherwise would due to the way the bend points are set up; also since women live longer they will get paid more out of SS, ceteris paribus