scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,703
That is why they use terms like chained CPI instead of benefit cuts. Benefits have been tweaked, including cuts, in many ways over the years, like raising taxes on benefits and then putting the tax money back into the SS trust fund. The taxable thresholds set up in 1984 aren't indexed to inflation, so that is another subtle way benefits are cut each year for many retirees.
There is a two-tiered system to determine how much federal income tax is paid on SS benefits. First, there are 0/50/85 brackets to determine how much of one's SS is taxable. Those brackets, introduced in 1984 and 1993 have not been indexed. Then, if any SS income is taxable, that income, along with one's remaining income, gets taxed according to the regular tax brackets which are indexed.
I can surely see the currently unindexed 0/50/85 brackets getting adjusted, especially because any taxes derived go back into the SS trust fund. Taken together, these brackets act as a backhanded means test for SS benefits.