Republicans Are, And Have Been, Attacking Social Security

[kyzr]

Raising the cap without raising the benefits is just another tax on the “rich”. Keep in mind, we have been told that “rich” means $400k+/yr. Removing or raising the cap and not the benefits would negatively affect people making 160k+/yr. Keep in mind, that even as it stands to today, those who have been making the most and paying the most, on average, do not get back what they put in. As you move down income the scale, that is inverted.

This is just another example of how the ”rich” pay more than their fair share, with the potential exception of the ultra-rich who live off of capital gains from very large trust funds. That is a very, very small minority of people.

The rich have been gaining on the rest of us for decades, they don't need any sympathy.
As Leona once said "We don't pay taxes, only the little people pay taxes".

 

[WorldWatcher]

Of the two SS is by far the easiest to fix. Raise the cap on taxable income to $1M from the current $148K. Problem solved. One step further would be to means test for benefits.

#1 Technically the current cap is 160K.

#2 Please provide more information about how "means" testing will work? Is it based on assets? Is it based on revenue in retirement? And at what levels do the SS benefits would start to be reduce and at what point they would be eliminated?

WW

 

[berg80]

The press’s response to Biden’s remarks has, however, been less gratifying. I’ve seen numerous declarations from mainstream media that of course Medicare and Social Security can’t be sustained in their present form. And not just in the opinion pages: There’s been at least some reversion to the early 2010s practice of including anti-social-insurance editorializing in what are supposed to be straight news reports, with highly disputable claims about these programs’ futures presented as simple facts.​

So let me try to set the record straight. Yes, our major social programs are on a trajectory that will cause them to cost more in the future than they do today. But how we deal with that trajectory is a choice, and the solution need not involve benefit cuts.​

A good starting point on all these issues is the Congressional Budget Office report on the long-term budget outlook — a report issued every year, with the most recent report released in July. (The numbers were updated this month, but the basic picture hasn’t changed.) The C.B.O. does excellent work, without a policy agenda, and is an extremely useful resource.​

The current report offers a very clear depiction of both the budget challenges facing our major social insurance programs and the sources of those challenges. Here’s my favorite figure, showing projected changes in spending over the next 30 years: Opinion | Why Medicare and Social Security Are Sustainable Reports of their inevitable collapse are greatly exaggerated. www.nytimes.com

 

[Smokin' OP]

sadly, SS has become a tax thanks to LBJ and the dems. As such it should be collected on all income with no limits, and the retirement benefit should be higher for those who pay more into the system.

You're FOS.
Estimates were that the Old-Age and Survivors Insurance Trust Fund would run out of money, possibly as early as August 1983. This bipartisan Commission was to make recommendations to Congress on how to solve the problems facing Social Security. Their report, issued in January 1983, was the basis for Congress' consideration of the Social Security reform proposals which ultimately resulted in the 1983 Social Security Amendments.

In its Report, the Commission recommended that Social Security benefits be taxable: "The National Commission recommends that, beginning with 1984, 50% of OASDI benefits should be considered as taxable income for income-tax purposes for persons with Adjusted Gross Income (before including therein any OASDI benefits) of $20,000 if single and $25,000 if married. The proceeds from such taxation, as estimated by the Treasury Department, would be credited to the OASDI Trust Funds under a permanent appropriation."

Congress passed and President Reagan signed into law the 1983 Amendments. Under the '83 Amendments, up to one-half of the value of the Social Security benefit was made potentially taxable income.

 

[berg80]

#1 Technically the current cap is 160K.

#2 Please provide more information about how "means" testing will work? Is it based on assets? Is it based on revenue in retirement? And at what levels do the SS benefits would start to be reduce and at what point they would be eliminated?

WW

At this point it's a theoretical exercise.

Means Testing Social Security: Income Versus Wealth

www.nber.org

 

[WorldWatcher]

the total you get back depends on how long you live. I think the break even point is around 10 years.

Correct. Figures I've seen show that break even point actually to be about 6.6 years (on average).

As posted in #92, if wealthy people are drawing benefits for 8-9 years MORE than poor people, then logically they will receive more out of the system than they paid in based on the fact that they are receiving benefits for much longer than the average.

So I'd be glad to take a look at contradictory evidence, so what is the source of this claim?

WW

 

[Redfish]

You're FOS.
Estimates were that the Old-Age and Survivors Insurance Trust Fund would run out of money, possibly as early as August 1983. This bipartisan Commission was to make recommendations to Congress on how to solve the problems facing Social Security. Their report, issued in January 1983, was the basis for Congress' consideration of the Social Security reform proposals which ultimately resulted in the 1983 Social Security Amendments.

In its Report, the Commission recommended that Social Security benefits be taxable: "The National Commission recommends that, beginning with 1984, 50% of OASDI benefits should be considered as taxable income for income-tax purposes for persons with Adjusted Gross Income (before including therein any OASDI benefits) of $20,000 if single and $25,000 if married. The proceeds from such taxation, as estimated by the Treasury Department, would be credited to the OASDI Trust Funds under a permanent appropriation."

Congress passed and President Reagan signed into law the 1983 Amendments. Under the '83 Amendments, up to one-half of the value of the Social Security benefit was made potentially taxable income.

now 85% is taxable, I don't care who signed the bill, it is wrong.

 

[DBA]

This is an interesting question.

#1 The wealthy do get to take advantage SS based on wage income they have worked over their career.

#2 Studies have shown that wealthy people live longer than poor to middle-income people because wealth provides an advantage to better health care, better wellness profiles, better resources during their working career where they have the ability for better diet, proper exercise, life-styles, and wellness options. In addition to better medical care and life styles in retirement. This translates to about 8-9 years of additional benefits when comparing duration of benefits for poor and wealthy.

So yes, they do get to take advantage of the program and they can (on average) take advantage for longer periods.

Just fyi...

WW

Rich people live longer and have 9 more healthy years than poor people, according to new research

A significant new study found rich men and women enjoy nine more healthy years than the poorest people in their countries.

www.insider.com

This seems to ignore the elephant in the room. I can agree that weartheir people generally llive longer, but we must also understand that wealthier people also paid much more into the system. This wouldn’t mean much if the maximum benefit was a simple percentage of contributions with no limits, but it isn’t. The cap on benefits is pretty low, based on contributions, for many higher income individuals and MUCH lower for higher income married couples, who are far less likely to ever receive benefits close to contributions.

 

[Smokin' OP]

now 85% is taxable, I don't care who signed the bill, it is wrong.

I agree.

 

[Ray From Cleveland]

This is an interesting question.

#1 The wealthy do get to take advantage SS based on wage income they have worked over their career.

#2 Studies have shown that wealthy people live longer than poor to middle-income people because wealth provides an advantage to better health care, better wellness profiles, better resources during their working career where they have the ability for better diet, proper exercise, life-styles, and wellness options. In addition to better medical care and life styles in retirement. This translates to about 8-9 years of additional benefits when comparing duration of benefits for poor and wealthy.

So yes, they do get to take advantage of the program and they can (on average) take advantage for longer periods.

Just fyi...

WW

Rich people live longer and have 9 more healthy years than poor people, according to new research

A significant new study found rich men and women enjoy nine more healthy years than the poorest people in their countries.

www.insider.com

It's not a question of how long they collect benefits, it's a question of do they get more back than they put in like your average blue collar worker that lives to the average lifespan in the US.

If you go to the bank and deposit a check for $200.00, but withdraw $250.00, that bank won't be in business very long if most of their customers do the same thing. That's what led to the problem we have today. We on SS get a COLA every year, and this years was a pretty good size. Are the working people putting anymore into the system? Hell no. In fact during my working years I can't remember the last SS or Medicare contribution increase we got.

 

[WorldWatcher]

At this point it's a theoretical exercise.

Means Testing Social Security: Income Versus Wealth

www.nber.org

A quick review of the article posits a reduction of about 50% on the very top of the wealth/revenue scale.

And yes, it's a theoretical exercise. Because mean's testing based on wealth, revenue, or both would have to win the support of the largest voting demographics block (by age) and that is seniors 50+.

WW

 

[berg80]

Why should the wealthy support programs they won't even be able to take advantage of?

I suppose it depends on whether the wealthy think living in a country full of elderly people who are poverty stricken is desirable. Whether the rich would be comfortable seeing 82 year olds bagging groceries so they can afford food and medication.

 

[DBA]

Correct. Figures I've seen show that break even point actually to be about 6.6 years (on average).

As posted in #92, if wealthy people are drawing benefits for 8-9 years MORE than poor people, then logically they will receive more out of the system than they paid in based on the fact that they are receiving benefits for much longer than the average.

So I'd be glad to take a look at contradictory evidence, so what is the source of this claim?

WW

This is not the case because the maximum benefit does not follow a linear progression with the maximum contributions. Part of the calculation in determining maximum benefit is using a progressive system(AIME) that does not give the same “credit” for each dollar contributed. 90% credit is given for incomes at the lower tier, while 15% credit at the higher tier of income.

 

[Ray From Cleveland]

Of the two SS is by far the easiest to fix. Raise the cap on taxable income to $1M from the current $148K. Problem solved. One step further would be to means test for benefits.

Back to tax the rich again.

 

[WorldWatcher]

This seems to ignore the elephant in the room. I can agree that weartheir people generally llive longer, but we must also understand that wealthier people also paid much more into the system. This wouldn’t mean much if the maximum benefit was a simple percentage of contributions with no limits, but it isn’t. The cap on benefits is pretty low, based on contributions, for many higher income individuals and MUCH lower for higher income married couples, who are far less likely to ever receive benefits close to contributions.

You are equating "wealth" with paying into the system. The two are not synonymous as much "wealth" isn't subject to SS taxes (assets, interest, capital gains, stock dividents, etc.). There are caps on the maximum WAGE income subject to SS taxes. So I agree that those with higher wages pay more into the system, they also (on average) draw benefits for much longer.

SS taxes are based on individual wages not "married couple" wages. Each pays taxes based on individual earnings. Now there are provisions when it comes to paying benefits that a surviving spouse can draw SS at their deceased spouses rate. But even then the "married couples" benefits are being reduced because the surviving spouse is only drawing one benefits unlike when both were alive and the couple was receiving BOTH benefits (assuming both spouses worked and are entitled to individual benefits).

WW

 

[WorldWatcher]

This is not the case because the maximum benefit does not follow a linear progression with the maximum contributions. Part of the calculation in determining maximum benefit is using a progressive system(AIME) that does not give the same “credit” for each dollar contributed. 90% credit is given for incomes at the lower tier, while 15% credit at the higher tier of income.

When I looked at the calculations (admittedly some time ago), the percentage weighting isn't based on income tier. It based on how long ago the income was generated.

WW

 

[DBA]

You are equating "wealth" with paying into the system. The two are not synonymous as much "wealth" isn't subject to SS taxes (assets, interest, capital gains, stock dividents, etc.). There are caps on the maximum WAGE income subject to SS taxes. So I agree that those with higher wages pay more into the system, they also (on average) draw benefits for much longer.

SS taxes are based on individual wages not "married couple" wages. Each pays taxes based on individual earnings. Now there are provisions when it comes to paying benefits that a surviving spouse can draw SS at their deceased spouses rate. But even then the "married couples" benefits are being reduced because the surviving spouse is only drawing one benefits unlike when both were alive and the couple was receiving BOTH benefits (assuming both spouses worked and are entitled to individual benefits).

WW

You are correct, it doesn’t look like being married with negatively affect our SS. That is good to know. For some reason, I was thinking there was also a cap on married couples, but I must have been confusing that with the family benefit cap.

 

[DBA]

When I looked at the calculations (admittedly some time ago), the percentage weighting isn't based on income tier. It based on how long ago the income was generated.

WW

It is based on how long the income was generated, but there is also a monthly earnings component in the AIME calculation.

 

[WorldWatcher]

It is based on how long the income was generated, but there is also a monthly earnings component in the AIME calculation.

Oh, sure there is an earning component.

However my understanding of the calculation was that the percentage weighting (index) was a function of time as to when the earnings were deducted. Then the highest years are used for the benefits calculation.

(Of course we could be saying the same thing, just thinking about it differently. LOL )

WW

 

[WorldWatcher]

You are correct, it doesn’t look like being married with negatively affect our SS. That is good to know. For some reason, I was thinking there was also a cap on married couples, but I must have been confusing that with the family benefit cap.

You sure "family cap" doesn't apply to SSDI?

My understanding was the only time SS retirement hinged on marital status was if a spouse passed and the other spouse being able to draw at the deceased spouses higher earnings.

WW