Cuts to SS and Medicare

[Hutch Starskey]

I agree with the sentiment.

The question is...

What is your non-bumper sticker proposal that will fix the system through the baby boomer bump?

WW

Sentiment?
The reality.

 

[WorldWatcher]

Sentiment?
The reality.

Why won’t you tell us your workable plan?

One that protects seniors through the baby boomer bubble.

Is it easier to just cast stones and not have a viable plan?

WW

 

[Hutch Starskey]

It is and it is failing, that is why the cap needs to be raised or eliminated! That alone will make the program solvent!

At whose expense though?
Why should they be required to shoulder that expense?

 

[Hutch Starskey]

Why won’t you tell us your workable plan?

One that protects seniors through the baby boomer bubble.

Is it easier to just cast stones and not have a viable plan?

WW

I don’t make plans. I don’t know enough about the legal logistics to even know what’s possible. Nor do you.

I’m simply addressing the idea that the solution is to simply charge those at the cap for the fix.

 

[Grumblenuts]

View attachment 757195

View attachment 757196

Sweden - Individual - Other taxes

Detailed description of other taxes impacting individuals in Sweden

taxsummaries.pwc.com

7% on all employee wages (no cap) and 31.42% on taxable pay (no cap) paid by employers.

So you are advocating for MORE tax increases then my previous suggestion of doubling the current wage cap of $160K to $320K (or raising it to $500K).

Increasing Social Security taxes from the current 12.4% (EE and ER) rate capped at $160K to 35-48% (it's a little unclear) with no cap.

You think that will pass?

WW

The Swedish system is fundamentally incomparable.

Social security in Sweden is an aspect of the Swedish welfare system and consists of various social insurances handled by the National Agency for Social Insurance (Swedish: Försäkringskassan), and welfare provided based on need by local municipalities. Social security is the main conduit for redistribution of approximately 48% of the Swedish GDP in the form of taxed income.

It's like real Medicare4All, only way more elaborate and expensive than ever need be here.

 

[Grumblenuts]

SS guarantees you income for life based on actuarial tables. Live long enough and you get far more than you paid in. End of life care is not cheap. Especially in the USA.

True. Also true, most people, knowing their end to be imminent, remain adamant about not wishing to be a burden to others, especially upon their loved ones. The only people who have really wanted end-of-life care to become prohibitively expensive are the greedy bastards who profit most from forcing such conditions upon the rest of us. They are not hard to identify.

 

[Hutch Starskey]

Parity? "By definition" "a guy making $500K" is not at a parity with a "guy making $60k".

Your brain is truly broken.

Parity within the SS system.
The ratio between contribution amount and the amount of the eligible benefit.
Meaning everyone pays about the same percentage of their eventual benefit.
Caps are set to maintain that parity in the system.

guy A- average wage earner makes $60k and is eligible for an average benefit of $1500 a month
He’s paying about 20% of his expected monthly benefit every month.

Guy B- higher earner pays at the cap of $160k and is eligible for the max benefit of $3600 a month. He’s paying about 23% of his expected monthly benefit every month.

They have relative equity in their contribution to benefit ratio

 

[Dagosa]

its their money, the paid into it their entire working lives, they can spend it however they want, its their money!

No shit.

 

[Lakhota]

 

[Grumblenuts]

Parity within the SS system.
The ratio between contribution amount and the amount of the eligible benefit.
Meaning everyone pays about the same percentage of their eventual benefit.
Caps are set to maintain that parity in the system.

guy A- average wage earner makes $60k and is eligible for an average benefit of $1500 a month
He’s paying about 20% of his expected monthly benefit every month.

Guy B- higher earner pays at the cap of $160k and is eligible for the max benefit of $3600 a month. He’s paying about 23% of his expected monthly benefit every month.

They have relative equity in their contribution to benefit ratio

Point was that's no reasonable person's notion of "parity." There is this Bill having to do with something else, but regardless, the SSA doesn't use that term to describe anything it actually does. They just explain that:

If you are working, there is a limit on the amount of your earnings that is taxed by Social Security. This amount is known as the “maximum taxable earnings” and changes each year.

Now note that it changes. Note also that several legislative changes have been made to S.S. over the years, all at least attempting to make it conform better to its stated purpose for a longer period of time, and none to appease your notion of "parity."

So while completely removing the cap might arguably be an unprecedented change to S.S. cap history, effecting changes to S.S. is not unprecedented either specifically nor in general.

You've made clear that you don't care about the purpose of S.S., just that it seem procedurally consistent and "fair" to you. Oh well. I care about taking care of the folks S.S. was set up to take care of. I don't want it to ever go broke. The cap has always been a break for those making more, a constant burden upon those making less; and given you did your math correctly, those making more get substantially more out of it even though they're required to pay into it for less time. That is not "parity."

 

[Redfish]

No shit.

then why so you think the govt should limit what they can get?

 

[Hutch Starskey]

Point was that's no reasonable person's notion of "parity." There is this Bill having to do with something else, but regardless, the SSA doesn't use that term to describe anything it actually does. They just explain that:

Now note that it changes. Note also that several legislative changes have been made to S.S. over the years, all at least attempting to make it conform better to its stated purpose for a longer period of time, and none to appease your notion of "parity."

So while completely removing the cap might arguably be an unprecedented change to S.S. cap history, effecting changes to S.S. is not unprecedented either specifically nor in general.

You've made clear that you don't care about the purpose of S.S., just that it seem procedurally consistent and "fair" to you. Oh well. I care about taking care of the folks S.S. was set up to take care of. I don't want it to ever go broke. The cap has always been a break for those making more, a constant burden upon those making less; and given you did your math correctly, those making more get substantially more out of it even though they're required to pay into it for less time. That is not "parity."

The purpose of SS is the same for every participant. That’s why everyone pays the same for their benefits. There is no more and no less of a burden placed on any participant. By design.

Wage caps exist because benefit caps exist.

Would it even be legal to remove the wage cap?
Could doing so be considered discriminatory or predatory? Conforming constitutionally ?

 

[Redfish]

The purpose of SS is the same for every participant. That’s why everyone pays the same for their benefits. There is no more and no less of a burden placed on any participant. By design.

Wage caps exist because benefit caps exist.

what would be wrong with everyone paying the same per centage of their income with no limits? How would that be unfair? the income tax charges a higher percentage on higher incomes, is that fair? 50% of wage earners pay zero income tax, is that fair?

 

[Hutch Starskey]

what would be wrong with everyone paying the same per centage of their income with no limits? How would that be unfair? the income tax charges a higher percentage on higher incomes, is that fair? 50% of wage earners pay zero income tax, is that fair?

Raising the benefit cap with the wage cap proportionally accomplishes nothing.

SS needs inflows from outside of the system in order to bolster the trust fund.

 

[Redfish]

Raising the benefit cap with the wage cap proportionally accomplishes nothing.

SS needs inflows from outside of the system in order to bolster the trust fund.

those things are only needed because the dems under LBJ raided the SS fund and merged it into the general fund, then senile Joe authored a bill to make SS income taxable. So your dem party created the problem that you are now ranting about. you get what you vote for, moron.

 

[Redfish]

those things are only needed because the dems under LBJ raided the SS fund and merged it into the general fund, then senile Joe authored a bill to make SS income taxable. So your dem party created the problem that you are now ranting about. you get what you vote for, moron.

Hutch disagrees because the truth does not fit his biased narrative, typical libtardian.

 

[Hutch Starskey]

Hutch disagrees because the truth does not fit his biased narrative, typical libtardian.

I don’t agree because it’s just not true.

 

[Winco]

Guy B- higher earner pays at the cap of $160k and is eligible for the max benefit of $3600 a month.

Increase the wage CAP to $200K and KEEP the max Benefit the same.

If you were making exactly $160K per year, then the NEXT year(S) you made $200K, YES, you would pay more into the SS system, w/o an increased benefit, but YOU would still have a bigger paycheck.

SS needs inflows from outside of the system in order to bolster the trust fund.

6.2% for an additional $40K, would amount to an additional $2,480 per person who makes up to $200K.

 

[Hutch Starskey]

Increase the wage CAP to $200K and KEEP the max Benefit the same.

If you were making exactly $160K per year, then the NEXT year(S) you made $200K, YES, you would pay more into the SS system, w/o an increased benefit, but YOU would still have a bigger paycheck.

6.2% for an additional $40K, would amount to an additional $2,480 per person who makes up to $200K.

Why?
Why do you want to build inequity into the system?
Why is it on that guy to secure your benefit?

 

[Winco]

those things are only needed because the dems under LBJ raided the SS fund and merged it into the general fund, then senile Joe authored a bill to make SS income taxable. So your dem party created the problem that you are now ranting about. you get what you vote for, moron.

Q1. Which political party took Social Security from the independent trust fund and put it into the general fund so that Congress could spend it?

A1: There has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government. The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no effect on the actual operations of the Trust Fund itself.


Q3. Which political party started taxing Social Security annuities?

A3. The taxation of Social Security began in 1984 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on an overwhelmingly bi-partisan vote.

The basic rule put in place was that up to 50% of Social Security benefits could be added to taxable income, if the taxpayer's total income exceeded certain thresholds.

The taxation of benefits was a proposal which came from the Greenspan Commission appointed by President Reagan and chaired by Alan Greenspan (who went on to later become the Chairman of the Federal Reserve).

The full text of the Greenspan Commission report is available on our website.

President's Reagan's signing statement for the 1983 Amendments can also be found on our website.

A detailed explanation of the provisions of the 1983 law is also available on the website.



Q4. Which political party increased the taxes on Social Security annuities?

A4. In 1993, legislation was enacted which had the effect of increasing the tax put in place under the 1983 law. It raised from 50% to 85% the portion of Social Security benefits subject to taxation; but the increased percentage only applied to "higher income" beneficiaries. Beneficiaries of modest incomes might still be subject to the 50% rate, or to no taxation at all, depending on their overall taxable income.

This change in the tax rate was one provision in a massive Omnibus Budget Reconciliation Act (OBRA) passed that year. The OBRA 1993 legislation was deadlocked in the Senate on a tie vote of 50-50 and Vice President Al Gore cast the deciding vote in favor of passage. President Clinton signed the bill into law on August 10, 1993.

(You can find a brief historical summary of the development of taxation of Social Security benefits on the Social Security website.)