Taxation of SS

[Cut-Throat]

^ Rayvt, I have to agree with pb4uski on this one.

SS is taxed in a matter very consistent with all other investments.

Not Capital Gains for sure ! ..... If we were striving for a Stronger Middle Class and the good of the Country as a whole... Capital Gains should be treated as regular income and Social Security Tax Free.



It is pretty ridiculous for the Government to be Distributing SS Checks and then demanding taxes on those receipts. This tax was put in during the Reagan Administration and was not part of the Original S.S. Program. It was the beginning of the 'chipping away' at benefits that continues today.

 

[pb4uski]

.... It is pretty ridiculous for the Government to be Distributing SS Checks and then demanding taxes on those receipts. ....

That is where you are totally wrong.... the taxation of SS is broadly similar to the taxation of non-deductible IRAs and non-qualified contributory pensions/annuities... you avoid tax on the return of your after-tax contributions that you made but do get taxed on growth (and in the case of SS, employer contributions that you never paid tax on).

Easy to prove for yourself from information readily available on your SS statement.

I think a better way to put it was that prior recipients got a free pass on taxes on their SS benefits... and then Congress made the playing field level (of necessity of course).

 

[Helena]

Posters may be a little sensitive because of prior arguments over the fairness of taxing IRA withdrawals.

Ironically, IRA RMD... that the government dictates an amount that must be withdrawn every year after age 70... increases the likelihood that one's Social Security will be taxed. Or maybe that is not so ironic... maybe it was planned that way.

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[pb4uski]

Or dig up posts that are off-point from over a month ago to start another argument?

Or maybe lawmakers didn't think that it should be tax-deferred for life .... and its not like it hasn't been that way for 30 years but to some people who were not paying attention it is a nasty surprise.

 

[Cut-Throat]

That is where you are totally wrong................................

I think a better way to put it was that prior recipients got a free pass on taxes on their SS benefits... and then Congress made the playing field level (of necessity of course).

I am not wrong, as I was pointing out how the program was initially implemented... It was a Tax Free Benefit.... So those are the Facts!



The People that are getting a 'Free Pass' today are the ones that are escaping regular income taxes on their Capital Gains.... This is 'trickle down' at its worst. It is what allows Billionaires to pay less percentage income tax than their Secretaries.

 

[pb4uski]

You said:

It is pretty ridiculous for the Government to be Distributing SS Checks and then demanding taxes on those receipts.

and that was the part that I was responding to.

When they started taxing SS isn't relevant to the question of whether SS should be taxed... whether it shoud be taxed is by comparison to similar types of income.

There are good reasons for a preferential rate for capital gains. One is that retained corporate profits, which are an important part of stock appreciation, have already been taxed once and Congress has decided that it is unfair to tax the same profits twice.

.... It is what allows Billionaires to pay less percentage income tax than their Secretaries.

Probably wrong again. Warren's marginal tax rate is probably lower than his secretary, but his effective tax rate (tax divided by income) is probably higher because of the progressivity built into the tax brackets. I found something that indicates that Buffett said that his effective tax rate was 17.4% and that ignores his share of the corporate taxes paid by Berkshire on his ownership interest.

 

[Cut-Throat]

When they started taxing SS isn't relevant to the question of whether SS should be taxed... whether it shoud be taxed is by comparison to similar types of income.

Social Security was around long before IRAs and 401Ks (Which were started to eliminate pensions, and chip away at Social Security). Since S.S. was started long before IRAs and 401Ks, the proper thing would have made IRAs and 401Ks Tax free also. You have the Cart before the Horse.



The facts of the current manner of taxing Capital Gains at a ridiculously low rate, is a benefit that that was gotten by Bribes under the umbrella of 'Campaign Contributions' by Billionaires. Yet you seem to think that Congress is trying to 'Level the Playing Field' .... Laughable!

 

[Helena]

Not Capital Gains for sure ! ..... If we were striving for a Stronger Middle Class and the good of the Country as a whole... Capital Gains should be treated as regular income and Social Security Tax Free.

It is pretty ridiculous for the Government to be Distributing SS Checks and then demanding taxes on those receipts. This tax was put in during the Reagan Administration and was not part of the Original S.S. Program. It was the beginning of the 'chipping away' at benefits that continues today.

Well said... and I agree

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[Aerides]

Since this thread had naturally run its course 6 weeks ago, but has since taken on new life as a apparent battle ground between members, I'm going to wrap this up here.

As a reminder from our community rules:

"Be Courteous and Appropriate! We aim to ensure that the forum is an enjoyable place that you want to visit time and time again. Our underlying philosophy is that the strength of the member relationships we build here is what sets us apart from the other boards. Treating each other with respect and kindness, and thinking before you speak will go a long way towards making this an enjoyable place."