Strengthen Social Security, Increase Benefits, Cut Taxes for Seniors

[Lakewood90712]

SS was created as a safety net , not a retirement plan. Deviation from that has created this intractable situation. The baby boom population bubble will just about all be beneficiaries by the time the system has no surplus.

Now is the time to do nothing. Yes, doing nothing is better than continuing to monkey with the system. Put me in the nut job category if you don't agree, I'm sticking to my position.

It will not go bankrupt, but just revert to real sustainability.

The working poor do not have a nickel to fund an IRA, i understand, and likely will work until disability or death. I spent over a decade in municipal gov. , often knee deep in very low income neighborhoods. SS cant fix this.

SS just is not a full retirement plan

Off my soapbox for today.

[Beststash]

As a elderly person, SS recipient, and retiree - I like the idea. I also think it is time to stabilize SS for those that follow in our footsteps. Most of the increases will be put back into the economy unlike tax cuts and those at the bottom of the economic scale would greatly benefit. I think this would get great support from the elderly (and the numbers are growing) and it would stabilize the social safety net till at least the turn of the century. I also think the way of calculating COLA should be revisited. In today's world "trillions" seems to the be norm where in my youth "millions" was the standard monetary benchmark. I don't think SS has kept up with the economics of today.

[gwraigty]

As a 55 yr. old SAHM/SAHW, I like some parts of this, but not other parts. I believe that SS benefits should not be taxable at all. Since that's not going to happen, I'm glad they're raising the amounts that trigger taxation. I'm in favor of raising the minimum SS benefits for the poorest recipients.

I don't like the idea of taxing current workers more to pay for immediate raises for all current SS recipients.

No offense meant, but it's easy to be in favor of something and put a positive spin on it when you stand to benefit without having to pay the higher taxes. People my age have already had FICA taxes raised. It didn't solve the problem, did it?

[ncbill]

Sort of scary that SS is in such bad shape that not only does it need to remove the cap but also phase in a 20% increase in actual taxes paid.

[Chuckanut]

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Originally Posted by Helena . I especially like the part of the bill that gives a tax cut for millions of seniors by increasing the income thresholds for taxing Social Security. Those income thresholds were never indexed for inflation since the 1984 law to tax Social Security income. And now, due to decades of inflation, even lower income seniors have to pay taxes on their Social Security income. Pity this wasn't addressed in last year's tax reform bill/law. .

I completely agree.

[USGrant1962]

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Originally Posted by ncbill Sort of scary that SS is in such bad shape that not only does it need to remove the cap but also phase in a 20% increase in actual taxes paid.

It doesn't need to, this bill adds benefits. Removing the cap and maybe a 10% increase (0.62% higher for employee and employer) makes the system solvent until the 2080s.

Social Security Reformer is working again. The Reformer: An Interactive Tool to Fix Social Security

[pb4uski]

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Originally Posted by USGrant1962 Increasing SS tax from 6.2% to 7.4% is not 50 cents a week - not even close. Average U.S. wage is ~$48,000/yr. 1.2% of that is $576, or $11/week. It is still $7.25 if you want to use median wage of ~$32,000/yr. And both are times two of course for the employers share. Makes me wonder what other math they got wrong.

Looks like they got fancy with the wording to make it sound like a very modest tax increase when it is not... it is grabbing an additional 1.2% of income from workers.... or a 20% increase in the rate they are paying now (7.4%/6.2% = 120%).

Deceitful IMO. Shame on them.

[Lakewood90712]

Raising the payroll tax.

Workers respond by having less to spend in the economy and to fund their own IRA or 401K.

Business responds by raising prices and/or off-shoring the work.

Can anyone explain why either of these are good for The United States as a whole?

Social Security turned into the largest vote buying tool ever created. Both parties are equally responsible. This has to stop.

Reduction of benefits for existing SS annuitants when the surplus ends will cause a revolt. Continuing to raise payroll taxes will eventually also cause a revolt. When the surplus dries up, payroll taxes should be raised ONLY to the amount to cover current pay outs, and never a % increase thereafter .

The Legislature has proven time after time, that a pool of money will be abused. Example, expanding scope of benefits , knowing the consequences will happen long after leaving office.

PS what is the best over the counter Med for high blood pressure ?, I think I am about to burst an artery thinking about this subject.

[joeea]

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Originally Posted by braumeister And the funding for this would come from ... ?

From increased debt - the same place the tax cut funding came from.

It doesn't matter anyway. There's no way this can pass the current Senate.

[joeea]

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Originally Posted by Lakewood90712 The best thing that could happen is doing nothing, and hitting the wall with an approx 25 % benefit reduction thereafter.

Tell grandma that this is the best thing for her.

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Only then will the pay as you go system , as it was originally established , work properly.

Hint: It wasn't originally established as a pay as you go system.

[joeea]

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Originally Posted by Mdlerth Of course, the original SS tax rate was 1%. Eight decades of boosting rates didn't make it solvent, but this one will? Call me skeptical.

Agreed!

It shouldn't be funded from it's own trust fund. It should be paid of of general revenues like virtually every other government obligation.

[CardsFan]

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Originally Posted by joeea From increased debt - the same place the tax cut funding came from. It doesn't matter anyway. There's no way this can pass the current Senate.

If you read the bill, it is self funding. No impact on debt, but an increase in SS taxes for those still working.

To your second point, you may be right about THIS bill with THIS wording, but it is a start. Provided this is a serious offer with serious negotiations allowed, it could go somewhere. If it is a "take it or leave it" stick in the eye, then maybe you are right and it will die.

[joeea]

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Originally Posted by pb4uski Deceitful IMO. Shame on them.

I'm shocked and chagrined that the bill's proponents would use misleading terms to gain acceptance.

Next thing you know they'll be saying that the bill would pay for itself by boosting the economy - some sort of "trickle down" effect from seniors to others.

Or maybe they will talk about how this would make Social Security more competitive with the retirement benefits of other countries.

That would certainly be shameful.

[Montecfo]

It doesn't seem right to increase the tax without doing a phased change to the age at which benefits start.

[joeea]

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Originally Posted by Lakewood90712 Can anyone explain why either of these are good for The United States as a whole?

Putting more money in the pocket of seniors to spend is good for the economy. Helping seniors rely less on their children is good for families.

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Reduction of benefits for existing SS annuitants when the surplus ends will cause a revolt.

Don't worry - that won't happen.

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Continuing to raise payroll taxes will eventually also cause a revolt.

It hasn't in the past. Besides, there was a huge cut recently.

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When the surplus dries up, payroll taxes should be raised ONLY to the amount to cover current pay outs, and never a % increase thereafter .

Not even a COLA? That's revolting.

[MichaelB]

Weather forecast says cloudy with sudden gusts of snark. It'd be nice if it were to pass by and not bother the thread

[daylatedollarshort]

Why not eliminate the current cap on SS to shore it up? What is sacred about the income current limit? Is it a fact, research or logic based cap? Why is there any income limit at all?

[Dtail]

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Originally Posted by daylatedollarshort Why not eliminate the current cap on SS to shore it up? What is sacred about the income current limit? Is it a fact, research or logic based cap? Why is there any income limit at all?

I always thought this would work too, but for the 1%ers how could their eventual payments be supported?

[razztazz]

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Originally Posted by daylatedollarshort Why not eliminate the current cap on SS to shore it up? What is sacred about the income current limit? Is it a fact, research or logic based cap? Why is there any income limit at all?

I believe the reason for the wage cap is because social security has a maximum pay-out cap. IOW you're paying only for a certain maximum death insurance coverage. Ergo they can't make the amount taxable unlimited

That's the way it's been put to me and has appeared on this forum some years ago.

[Aerides]

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Originally Posted by daylatedollarshort Why not eliminate the current cap on SS to shore it up? What is sacred about the income current limit? Is it a fact, research or logic based cap? Why is there any income limit at all?

The why is related to the payout caps, basically the person making $1M a year vs. $128k per year pay the same, but they get the same payout. Increasing the cap would not include a corresponding increased payout to higher earners. (fine with me, but not palpable to many voters one might guess).

There have been ideas floated in the past about even keeping the cap where it is but then removing it higher up the chain.

So, for example, say it's currently capped at $128k, you keep that, but then have it kick in again on earnings over >$200k. Seems like a reasonable compromise to me, but then I don't know what that means in terms of real impacts to helping or not.