Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Strengthen Social Security, Increase Benefits, Cut Taxes for Seniors
Old 01-31-2019, 03:56 PM   #1
gone traveling
 
Join Date: Aug 2006
Posts: 994
Strengthen Social Security, Increase Benefits, Cut Taxes for Seniors

.

Bill was introduced in House yesterday. It will likely pass the House... but unfortunately, may die in the Senate.


"Social Security 2100 Act will Strengthen Social Security, Increase Benefits, Cut Taxes for Seniors "


January 30, 2019

Press Release

" Social Security 2100 Act will Strengthen Social Security, Increase Benefits, Cut Taxes for Seniors

Washington, D.C. – Today, John B. Larson (CT-01), Chairman of the Ways & Means Social Security Subcommittee, introduced the “Social Security 2100 Act,” H.R. 860, a bill that increases Social Security’s vital benefits while making the system financially strong throughout the 21st century.

“Today, over 200 Members of Congress came together on the anniversary of President Franklin Delano Roosevelt’s birth to honor his legacy, and to enhance and expand the nation’s most successful insurance program, Social Security, which touches the lives of every American. With 10,000 baby boomers becoming eligible for Social Security every day, the time to act is now. The Social Security 2100 Act will provide economic security not just for today’s seniors but for future generations too."


More info at links below.

https://larson.house.gov/media-cente...ocial-security

https://larson.house.gov/social-security-2100

.
__________________

Helena is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-31-2019, 04:02 PM   #2
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 15,050
And the funding for this would come from ... ?
__________________

__________________
I thought growing old would take longer.
braumeister is offline  
Old 01-31-2019, 04:31 PM   #3
Recycles dryer sheets
 
Join Date: Mar 2015
Posts: 71
When I post a link, I try to summarize the content to help others decide whether it is worth the time.


To answer the question:



Quote:
  • Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $132,900. This legislation would apply the payroll tax to wages above $400,000. This provision would only affect the top 0.4% of wage earners. [Sec. 201, 202]

  • 50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]
Exrook is offline  
Old 01-31-2019, 04:32 PM   #4
Recycles dryer sheets
Popeye's Avatar
 
Join Date: Sep 2016
Posts: 164
From a fact sheet on the bill, here’s the strengthen part.

The Social Security 2100 Act Strengthens the Trust Fund

Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $132,900. This legislation would apply the payroll tax to wages above $400,000. This provision would only affect the top 0.4% of wage earners. [Sec. 201, 202]


50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]

Social Security Trust Fund Established – Social Security provides all-in-one retirement, survivor, and disability benefits funded through the dedicated FICA contribution paid by workers. There are technically two trust funds, Old-Age and Survivors (OASI) and Disability Insurance (DI), and that are usually referred to as the Social Security Trust Fund. This provision combines the OASI & DI trust funds into one Social Security Trust Fund, to ensure that all benefits will be paid. [Sec. 204]

[i] Based on the independent analysis of the SS 2100 Act by SSA’s Chief Actuary that estimates it will keep the OASDI Trust Fund solvent beyond 2092.
Popeye is offline  
Old 01-31-2019, 04:37 PM   #5
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 2,162
Medicare funding is the Elephant in the room right now. I do mean now.

Hey, why doesn't this thread have the hot button topic warning ? Mod's are going to have to keep a leash on it or it may get closed.
Lakewood90712 is offline  
Old 01-31-2019, 04:40 PM   #6
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 1,381
I tried to enter this scenario into my fave SS-fix calculator at The Reformer: An Interactive Tool to Fix Social Security but that website seems to be broken. Is it working for anyone else?
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
USGrant1962 is offline  
Old 01-31-2019, 04:41 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 3,659
The proposals seems reasonable to me. Instead of increasing the level where SS starts getting taxed from $25K/yr to $50K/yr for single people I would maybe increase it less and index it to inflation. If there was pushback against the bill and something had to be tweaked I think this is the best option but otherwise it's good as is.
aaronc879 is offline  
Old 01-31-2019, 04:47 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 1,998
Quote:
Originally Posted by Helena View Post
.

Bill was introduced in House yesterday. It will likely pass the House... but unfortunately, may die in the Senate.

.
IMHO, No bill of this importance, proposed by only one side, SHOULD pass without review and change. Not to say that hasn't happened in the past 8 years.

That said, a quick review says to me it is a good starting point. Now lets see what happens.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is offline  
Old 01-31-2019, 04:48 PM   #9
gone traveling
 
Join Date: Aug 2006
Posts: 994
.

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.

.
Helena is offline  
Old 01-31-2019, 04:53 PM   #10
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 1,381
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.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
USGrant1962 is offline  
Old 01-31-2019, 04:54 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,161
Quote:
Originally Posted by Popeye View Post
Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $132,900. This legislation would apply the payroll tax to wages above $400,000. This provision would only affect the top 0.4% of wage earners. [Sec. 201, 202][/I]
"Millionaires and billionaires" seem to be the ATM of the hour but I wonder how many millionaires and billionaires actually pay payroll tax vs interest, dividends and cap gains. Right now, this millionaire hasn't paid payroll tax in 14 years.

Is .04% enough to cover? I was once in the $400K pay realm and never understood or agreed with the SS cap but I'm not sure there's enough out there to make the plan work.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline  
Old 01-31-2019, 05:01 PM   #12
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 2,162
The best thing that could happen is doing nothing, and hitting the wall with an approx 25 % benefit reduction thereafter.

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

Raising taxes to build up temporary cushions is the problem, not the solution.

We have been thru this ( raising taxes for SS ) before and it never results in a permanent fix.
Lakewood90712 is offline  
Old 01-31-2019, 05:03 PM   #13
Full time employment: Posting here.
 
Join Date: Sep 2002
Posts: 817
I don’t see the bill going anywhere out of the house. Nothing will get done until the last minute as always.
JDARNELL is offline  
Old 01-31-2019, 05:13 PM   #14
gone traveling
 
Join Date: Aug 2006
Posts: 994
Quote:
Originally Posted by USGrant1962 View Post


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.


In the bill that increase is incremental over decades.

" * 50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]"

.
Helena is offline  
Old 02-01-2019, 11:21 AM   #15
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Sheltered in place
Posts: 31,835
Multiple posts that are off-topic and contentious in nature were removed. This is a relevant subject that does effect us, so it's in everyone's best interest to stay on the topic and steer away from the divisive sociopolitical commentary

The interesting discussion here is not "will it pass" but "how does it affect us?"
MichaelB is offline  
Old 02-01-2019, 11:59 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jan 2019
Location: NW Ohio
Posts: 1,019
Quote:
Originally Posted by USGrant1962 View Post
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.
I'm sure telling most Americans that it will only be .50 cents per week is a marketing move, that borders on downright lying, but most Americans wouldn't actually do the math to discover that it's wrong.
ckelly78z is offline  
Old 02-01-2019, 12:17 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,242
Not sure I like the "merge retirement and disability funds into one" bit... granular accounting is always better since it seems disability is where more of the fraud happens as its harder to fake your age and reported income to increase benefits. Since I would draw from the retirement end I don't think keeping it afloat should have to drag the disability anchor. Retirement is almost pure age demographics where disability is not.
Spock is offline  
Old 02-01-2019, 12:18 PM   #18
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 1,381
Quote:
Originally Posted by Helena View Post
In the bill that increase is incremental over decades.

" * 50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]"

.
Oh, I see what they did there. IMO, that is highly misleading. They mean 23 years x 50 cents increase every year = $11.50/week when phased in. That is a 19.35% increase in SS taxes and about $1,200/year between you and your employer - no small sum.

Most people reading that are going to think "it's only 50 cents", which is what the politicians want the people to think.

Anyway, here's the SS Actuary's report on the bill with all the numbers: https://www.ssa.gov/OACT/solvency/La...n_20190130.pdf

I think the bill is a good starting point for discussion, though for better or worse it will likely be a very long discussion.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
USGrant1962 is offline  
Old 02-01-2019, 12:18 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Posts: 6,067
Quote:
Originally Posted by MichaelB View Post
Multiple posts that are off-topic and contentious in nature were removed. This is a relevant subject that does effect us, so it's in everyone's best interest to stay on the topic and steer away from the divisive sociopolitical commentary

The interesting discussion here is not "will it pass" but "how does it affect us?"
Any tax increase by this would be mild, for us. The benefit would be no longer thinking about a payout cut down the road.
target2019 is offline  
Much ado about
Old 02-01-2019, 01:11 PM   #20
Thinks s/he gets paid by the post
Mdlerth's Avatar
 
Join Date: Oct 2016
Location: The Shire
Posts: 1,504
Much ado about

Meh.

I won't have SS-taxable earnings for much longer, so increasing it from 6.2 to 7.4% won't affect me. Ditto for boosting the cap.

If I live to 70 and start collecting, I anticipate that I'll have sufficient income from all sources that my SS benefit will continue to be taxable, so it won't affect me then either.

Suppose this tax hike passes and miraculously forestalls the haircut in 2034? You mean I won't face a ~25% reduction in some fraction of my retirement cash flow? Hardly earth-shattering whether it happens or not.

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.
__________________

__________________
Paying it forward is the best investment.
Mdlerth is offline  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Wharton Proposal to Strengthen SS: Lump Sums? athena53 FIRE Related Public Policy 4 10-11-2018 02:13 PM
Seniors Helping Seniors? athena53 Health and Early Retirement 10 08-24-2016 08:16 PM
Social Security Benefits Cut For Early Retirees Michael Other topics 12 01-05-2005 01:45 PM

» Quick Links

 
All times are GMT -6. The time now is 04:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×