The $42 Fix for Social Security

[GenXguy]

I would just note that qualifying for the spousal benefit does not require that one have or ever had children.

I said the same thing above. And if someone is always single and doesn't contribute to SS, they don't get any SS benefit, even if they have multiple kids.

 

[Semi-Retyrd]

To quote Samuel L. Jackson's line in Pulp Fiction ... "Allow me to retort."

1. Because the government is inconsistent on taxation. I can (and do) take after-tax dollars and invest them in stocks with no dividends i.e., no tax drag. 50+ years of untaxed growth and then heirs get them and pay NO taxes after the step-up. Rinse and repeat. Or ... late in life, you need to withdraw those funds, you're paying taxes on the LT capital gains at 15% versus the last-to-die paying a likely 24% on 85% of a SS payout. So, I'll put your own question back to you ... why should SS be any different?

2. As others have mentioned, that looking strictly at your SS taxes paid, ignores the cost of money, which becomes quite considerable when considering many of us first put into the system 50 years ago (before taking a dime out). This also ignores the company's contributory payment. That's not imaginary fairy dust.

3. As others have launched on ... not indexing income thresholds puts more citizens in the 50 & 85% tax threshold each and every year and is a flat out stealth tax increase.

SS was sold as a non-taxable benefit, which was true for almost 50 years before first 50% and then 85% taxable levels came into play and stealth tax increases above that. So, there is a BIG difference between understanding that SS is a double-taxation system that affects more and more retirees every year and just acknowledging that (while SS has served many well) that it comes at a cost and those costs are increasing.

Please see my post in the following thread where I explain the thought behind current taxation of SS benefits -

High Social Security & low other income vs Low social security & high other income​

From my post you will see that while SS taxation is imperfect, it is not meant to be a double taxation system and is fundamentally fair based on the definition of fairness meaning taxed no more and no less than private or other government pension plans.

 

[GenXguy]

GenXguy is talking about Trump telling everybody that he was going to eliminate taxation of SS. Congress didn't want to make that happen,

Right

You would think people should know by now anything a politician says is not an actual promise you can rely on. A law is a promise.

Who ever said it was an actual "reliable" promise, especially knowing the source? lol

There isn't anything to fix.

I think we will just have to agree to disagree since this argument goes back years, and some of these politicians have tried to fix it as I'm saying, without completely removing the tax for higher income households.

On the second part, I agree. The senior bonus deduction was a bone thrown pandering for votes. While I hope it sunsets as scheduled, since voting no or present to extending it could be spun as a tax increase I wonder if it will really sunset as scheduled.

Probably just like the ACA enhanced subsidies, that some people thought would be extended, but no, they are ending at the end of this year.

 

[youbet]

Probably just like the ACA enhanced subsidies, that some people thought would be extended, but no, they are ending at the end of this year.

As well they should. The ACA enhanced subsidies were intended to be temporary, the reasons for having them have entirely disappeared, so away they go! For once, something is working as it was intended.

Now, if our gov't could be as smart about SS and just let the future cuts occur, we'll be OK.

 

[GenXguy]

Now, if our gov't could be as smart about SS and just let the future cuts occur, we'll be OK.

If they would only listen to my suggestions - that would save SS. We don't want poor people to suffer a 25% cut that will increase further from there.

 

[Montecfo]

I hope we can just simmer down a little. It has been a good thread. All the talk about "unfairness" seems to be getting a bit emotional. Needlessly I think.

That is all.

 

[youbet]

We don't want poor people to suffer a 25% cut that will increase further from there.

That's not true. YOU don't want poor people to suffer a 25% cut, but I do. I want everyone to experience whatever cut is required to keep SS going after the trust fund is depleted. And I want the amounts cut to be replaced, for those who pass tough, thorough vetting, by welfare payments. Mixing retirement income for the general population with welfare for the indigent is a big part of what has destroyed SS.

 

[fognostic]

Future social security taxes that those kids "may" pay will be for earning their own social security, unrelated to the undeserving spouse, and if you know how it works, you will realize the spousal benefits have nothing to do with whether someone had kids or not, so that's a straw man.

The government's future ability to pay for all social security benefits has a great deal to do with whether and how many children couples have. That's not a strawman.

Population demographics are the crux of forecast social security shortfalls in the early 2030's: https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2024/fast_facts24.html#page31. Sure, individual eligibility and benefit amount are related to duration and amount of social security tax paid, but social security benefits are not paid out of an individual retirement account analogue. In fact, 91% of social security benefits are paid by current tax revenue: https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2024/fast_facts24.html#page30. Social security heads toward being in the black if the number of tax payers increases relative to the number of benefit recipients, and, as is now the case, it heads toward being in the red if the number of taxpayers decreases relative to the number of benefit recipients. That's how it works.

Assuming your placement of quotations around may (...taxes that those kids "may" pay..) implies some also may not pay taxes, I agree with you. However, if your intent was to implicitly argue having children "may" not help future tax rolls due to too many not paying taxes, then I think that would be engaging in the logical fallacy of appealing to an exception. Sure, we can all find examples of deadbeat children that don't pay taxes. But social security is funded by averages, and most children grow up to be tax paying adults.

Finally, I had stated I would favor making spousal benefits dependent on the number of children a couple have, so I obviously understood that was not how it worked today. I found your implying otherwise to be disingenuous in this context.

 

[GenXguy]

The government's future ability to pay for all social security benefits has a great deal to do with whether and how many children couples have. That's not a strawman.

It's still a straw man as far as social security spousal benefits, because the benefit has zero to do with how many children a spouse has, just like someone else mentioned above, and as you should know, people who have never been married can have a bunch of kids also (and it happens), who will not receive a SS benefit for paying in the same $0 as the undeserving spouse. As some others have said, it's not intended to be welfare so spouses or others can have kids at our expense.

 

[GenXguy]

That's not true. YOU don't want poor people to suffer a 25% cut, but I do. I want everyone to experience whatever cut is required to keep SS going after the trust fund is depleted.

My apologies, I realize that not everyone has the same compassion that I do and would like to see people suffer. We can see that's the case even with the sad BBB. Please forgive me for suggesting, otherwise.

 

[youbet]

My apologies, I realize that not everyone has the same compassion that I do and would like to see people suffer. We can see that's the case even with the sad BBB. Please forgive me for suggesting, otherwise.

BS GenX. I clearly stated I wanted the cuts to SS to be fully, or more, replaced by carefully vetted welfare payments. There is no need to rescue the well-off from SS cuts (at the expense of today's workers) in order to fully protect the indigent or near-indigent from cuts. They could be fully protected by welfare programs where their financial status would be confirmed.

I don't want anyone at or near the poverty level to suffer from future cuts. But I don't want current worker bees to suffer higher FICA taxes, working longer, etc., etc. just so some well heeled retiree can continue to receive current level benefits. So, pay out what the trust fund plus current contributions can afford as retiree benefits and create appropriate welfare payments for those who require them. Don't mix retirement benefits with welfare.

Although I'm sure your editing and comments were meant to be untruthful, your apology is accepted.

 

[Midpack]

Nothing will change anytime soon.

• If they cut benefits in any way, most seniors will vote them out.
• If they increase payroll taxes, most paying wage earners will vote them out.
• If they make higher wage earners pay more and get nothing in return, they’ll lose most campaign contributions, and lose their seat.
• If they do nothing, everyone assumes they’ll make someone else pay…and they probably get re-elected.