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Fox
Joined: 04 Mar 2009
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 Posted: Tue Aug 23, 2011 3:11 am Post subject: Why is President Obama so Anxious to Cut Social Security? |
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Article here.
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Why is President Obama so Anxious to Cut Social Security?
On his tour of the Midwest last week, President Obama again indicated his interest in cutting Social Security. He repeated a proposal that his administration first put forward in the debt ceiling negotiations: he wants to cut the annual cost of living adjustment by 0.3 percentage points.
This cut may sound small, but it adds up over time. A person in their 70s who had been getting benefits for ten years would see a reduction of 3 percent. By the time they were in their 80s, the cut would be 6 percent. And if they lived into their 90s, their benefit would be more than 9 percent lower as a result of President Obama's proposal.
For an average retiree who can expect to get benefits for 20 years, President Obama's plan would cut their lifetime Social Security benefits by roughly 3 percent. By comparison, his much feared tax increases on the rich would reduce the after-tax income of someone earning $300,000 a year by just 0.5 percent. In this case, a beneficiary who will be mostly dependent on their Social Security income in retirement will take about six times as large a hit relative to their income under President Obama's plan to cut Social Security than a couple earning $300,000 would from his plan to raise their taxes.
This cut to Social Security seems especially inappropriate since the near retirees who would feel the full impact of this cut have just seen most of their wealth destroyed by the collapse of the housing bubble and the plunge in the stock market. The typical near retiree (ages 55-64) has just $170,000 in net wealth, including the equity in their home.
This means that if they used every last penny in their 401(k) and other savings, they would have just about enough money to pay off the mortgage on a typical home. This would leave them 100 percent dependent on Social Security for their income. And of course, half of near retirees have less than this amount, meaning that they will not even be able to pay off the mortgage on a typical home. But apparently President Obama feels that these people need to make greater sacrifices.
The determination to cut Social Security is especially strange given the finances of the program. Under the law, Social Security is financed by the designated Social Security tax. It does not contribute to the deficit, since the law prohibits payments from being made if there is not money in the Social Security trust fund. That means that if the trust fund were drained, rather than contributing to the deficit, full benefits would not be paid.
And the date where this could be an issue is still relatively distant. The Congressional Budget Office just released new projections showing that the Social Security trust fund is fully solvent through the year 2038. Even after that date, the program would have enough money to pay 81 percent of scheduled benefits for the rest of the century. The folks who say that there will be nothing there for our children or grandchildren are just making it up or repeating the nonsense promulgated by some political hack.
Furthermore, this gap is not hard to close. Currently, the tax on the wages subject to the tax is capped at $107,000. The upward redistribution of income over the last three decades has caused a large share of wage income to escape taxation, as more money ends up in the pocket of CEOs and Wall Street types than ordinary workers. If all wage income were subject to the tax, then it would leave Social Security fully solvent for its 75-year planning period.
We could also go the route of increasing the tax on ordinary workers to cover the shortfall. After all, part of the story is that people are enjoying longer retirements, even if the wealthy have benefited much more from the increase in longevity than the typical worker. By 2040, average wages are projected to be 45 percent higher than today, adjusting for the impact of inflation. If just 5 percent of the projected wage growth over this period was used to finance Social Security, the program would be fully solvent for the rest of the century.
Most people would be surprised to know that 5 percent of the wage growth projected over the next three decades would be sufficient to keep Social Security solvent. After all, there is a well-funded and well-connected industry of people spreading disaster stories about Social Security and its massive deficit.
Many people will be taken aback by the idea of "projected wage growth," after all most workers' wages have been stagnant or falling in recent years. This is true. The projections refer to average wages, which had been rising, at least until the recession.
This brings up the fundamental point. The country has been and is getting richer. The reason that most people do not feel better off is that most of the money has gone to those at the top. Part of the reason is that they have been distracted by nonsense about the crushing burden of Social Security, so they have not paid attention to the policies that put more money in the pockets of the rich. Unfortunately, at the moment, President Obama seems to be working with the distracters. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Aug 23, 2011 1:25 pm Post subject: |
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Actually, the 2038 figure is already outdated.
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| The Trustees now estimate that the program will exhaust its dedicated trust funds (one for old-age and the other for disability) in 2036, a year earlier than the 2037 date projected in last year�s report. At that time, absent changes in law, all current and future beneficiaries would experience an immediate 23 percent cut in benefits. |
And the Huffpo article neglects to mention the more pressing SSDI shortfall.
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| Even more pressing is the state of the Disability Insurance trust fund, which (if not allowed to borrow from the rest of Social Security) will run out of money by 2018, only seven years from now. |
Something has to be done. We should all agree on that point. The worst case scenario would be Obama electing to do nothing. At least he is showing some leadership on this issue.
There are four possible options, all of which might be used in tandem with each other:
(a) extend the retirement age. This is my preferred solution. Make SS benefits accessible at 68 for both sexes. Allowing women to retire at age 62 is baffling in this age of equal opportunity. But we should recognize that at age 68, 75% of males and 85% of females are still alive and well according to actuarial tables. If we do this, we can fund the SSDI shortfall out of the general SS fund.
(b) reduce social security payments. This is Obama's solution. This option is not as bad as it first appears, considering that the steepest cuts, 9%, will come to a relatively small portion of SS recipients. Very few people live to be over 90 years old.
(c) increase SS taxes. This is the Huffpo article's solution. This would be a more favorable solution in a better economic climate when the tax burden would be less onerous. Specifically, Huffpo would like tax millionaires on SS payments. This seems unnecessary, because millionaires receive the same benefits as workers do. Thus, taxing them more for social security will politicize the program, which is fairly defensible as it is now. But I would agree to an increase in the cap on SS if necessary, say up to $200,000.
(d) means-test SS. This would deny millionaires and those whom don't need to rely on SS any benefits. This would be a reasonable way to reduce the austerity of options (a) and (b) and address the SSDI shortfalls in particular. But I believe it is incompatible with option (c). If millionaires were to pay their entire income into SS, it would excessive to also shut them out of the pool.
Gallup has done some polling on this. They've found that nearly or exactly 2/3ds of retired adults favor means testing SS and taxing the full amount from high-income earners. Obama's option to cut benefits is somewhat disfavored by a 14% margin, which is the same disfavor shown to the option for raising taxes (based on those who believe entitlement programs will cause problems in this country, i.e. informed/correct people).
Perhaps most interestingly, 60% of non-retired adults disbelieve that the SS system will be able to pay their benefits when they retire. Count me among the ones skeptical. If Obama's proposal passes, though, I would change my mind.
I will directly attack the Huffpo article's wishful projections.
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By 2040, average wages are projected to be 45 percent higher than today, adjusting for the impact of inflation. If just 5 percent of the projected wage growth over this period was used to finance Social Security, the program would be fully solvent for the rest of the century. |
I hate it when people do this, from China growth projections to pension accounting. This is called "counting your chickens before they hatch." It is a very destructive habit. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 2:55 pm Post subject: |
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| Kuros wrote: |
Something has to be done. We should all agree on that point. The worst case scenario would be Obama electing to do nothing. At least he is showing some leadership on this issue.
There are four possible options, all of which might be used in tandem with each other:
(a) extend the retirement age. This is my preferred solution. Make SS benefits accessible at 68 for both sexes. Allowing women to retire at age 62 is baffling in this age of equal opportunity. But we should recognize that at age 68, 75% of males and 85% of females are still alive and well according to actuarial tables. If we do this, we can fund the SSDI shortfall out of the general SS fund. |
Cutting benefits to elderly people who desperately need them is unreasonable, and pushing back the retirement age is a net benefit cut (and a brutal one given that many people all ready apply for early benefits, not without cause). These are people who cannot afford to share in the sacrifice; even with full scheduled Social Security payments they have a hard road ahead of them that looks dimmer every day. We are an incredibly rich nation, and one which has over the last few decades repeatedly made a conscious choice to redirect more and more of our society's wealth upwards to the wealthy at the expense of those below (and, for that matter, at the expense of the health of our overall economy). Making that choice again by choosing to cut benefits to the poor instead of having the rich contribute more is unconscionable.
[quote="Kuros"] (b) reduce social security payments. This is Obama's solution. This option is not as bad as it first appears, considering that the steepest cuts, 9%, will come to a relatively small portion of SS recipients. Very few people live to be over 90 years old. [/qute]
A and B are ultimately the same thing in a different form: straight up benefit cuts to the segment of the adult population which can least afford it. Which one would amount to the greater cut would be based on how long any individual person lived; the longer a person lived, the more Obama's suggestion would sting them. The shorter a person lived, the more yours would. None the less, they are of the same character, and my response is the same: taking more from the people who have least to avoid taking more from the people who have most shouldn't even be on the table.
| Kuros wrote: |
| (c) increase SS taxes. This is the Huffpo article's solution. This would be a more favorable solution in a better economic climate when the tax burden would be less onerous. Specifically, Huffpo would like tax millionaires on SS payments. This seems unnecessary, because millionaires receive the same benefits as workers do. Thus, taxing them more for social security will politicize the program, which is fairly defensible as it is now. But I would agree to an increase in the cap on SS if necessary, say up to $200,000. |
The program is all ready politicized. It has always been politicized. As such, I don't think the threat of "politicizing" it should impact our decision. Taxing the wealthy to make sure the elderly poor are able to live with some small modicum of dignity and financial stability is completely defensible. Further, I don't think anything about the current economic climate makes increasing Social Security taxes on the wealthy especially onerous. The extremely wealthy are doing more than fine right now, and taxing them a bit more to keep money in the hands of the elderly poor if anything would comparatively improve the economy rather than harm it, since those elderly poor are far more likely to immediately spend the money on products in the U.S. economy: exactly the kind of behavior we need more of.
| Kuros wrote: |
| (d) means-test SS. This would deny millionaires and those whom don't need to rely on SS any benefits. This would be a reasonable way to reduce the austerity of options (a) and (b) and address the SSDI shortfalls in particular. But I believe it is incompatible with option (c). If millionaires were to pay their entire income into SS, it would excessive to also shut them out of the pool. |
I agree that this and option C together would be unreasonable, and I think option C is both superior to this choice in every way, and more than capable of closing the gap on its own.
| Kuros wrote: |
| Perhaps most interestingly, 60% of non-retired adults disbelieve that the SS system will be able to pay their benefits when they retire. Count me among the ones skeptical. If Obama's proposal passes, though, I would change my mind. |
Well, I'm skeptical as well, but if Obama's proposal is enacted into law, what that would signal to me is that the next 30 some years are going to be filled with progressively more Social Security cuts, ensuring that if there's ever anything to collect, it certainly won't be anything that resembles the benefits I'd be entitled to if collecting today. The political Right often agitates against Social Security, and if the Left gives in to those calls instead of standing firm, then it's only a matter of time before the program is eviscerated.
| Kuros wrote: |
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By 2040, average wages are projected to be 45 percent higher than today, adjusting for the impact of inflation. If just 5 percent of the projected wage growth over this period was used to finance Social Security, the program would be fully solvent for the rest of the century. |
I hate it when people do this, from China growth projections to pension accounting. This is called "counting your chickens before they hatch." It is a very destructive habit. |
I agree it's not great to rely on such specific projected statistical figures, but I would support his case even if that statistic were to be completely wrong, so the projected wage increases are just icing on the cake from my perspective. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Aug 23, 2011 3:31 pm Post subject: |
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| Fox wrote: |
Kuros wrote:
Something has to be done. We should all agree on that point. The worst case scenario would be Obama electing to do nothing. At least he is showing some leadership on this issue.
There are four possible options, all of which might be used in tandem with each other:
(a) extend the retirement age. This is my preferred solution. Make SS benefits accessible at 68 for both sexes. Allowing women to retire at age 62 is baffling in this age of equal opportunity. But we should recognize that at age 68, 75% of males and 85% of females are still alive and well according to actuarial tables. If we do this, we can fund the SSDI shortfall out of the general SS fund.
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Cutting benefits to elderly people who desperately need them is unreasonable, and pushing back the retirement age is a net benefit cut (and a brutal one given that many people all ready apply for early benefits, not without cause). These are people who cannot afford to share in the sacrifice; even with full scheduled Social Security payments they have a hard road ahead of them that looks dimmer every day. |
If someone can't work, let's say they work a blue-collar job that puts stress on their system, they apply for SS disability insurance. I'm advocating making those who can work, people with white collar careers or soft blue collar careers, to do so as much longer as longevity has increased because of health advances. Those who actually can't work until 68 can still apply early for SSDI.
Remember that for men born in 1960 or afterwards, SS benefits kick in at 67. We're talking about one more working year over a much longer lifespan.
Social Security is more than retirement
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Many people think of Social Security as just a retirement program. Although it is true that most of the people receiving Social Security receive retirement benefits, many others get Social Security because they are:
Disabled; or
A spouse or child of someone who gets Social Security; or
A spouse or child of a worker who died; or
A dependent parent of a worker who died.
Depending on your circumstances, you may be eligible for Social Security at any age. In fact, Social Security pays more benefits to children than any other government program. |
This solution is not nearly as harsh as Krugman and the left would like to make it sound.
| Fox wrote: |
Kuros wrote:
(c) increase SS taxes. This is the Huffpo article's solution. This would be a more favorable solution in a better economic climate when the tax burden would be less onerous. Specifically, Huffpo would like tax millionaires on SS payments. This seems unnecessary, because millionaires receive the same benefits as workers do. Thus, taxing them more for social security will politicize the program, which is fairly defensible as it is now. But I would agree to an increase in the cap on SS if necessary, say up to $200,000.
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The program is all ready politicized. It has always been politicized. As such, I don't think the threat of "politicizing" it should impact our decision. Taxing the wealthy to make sure the elderly poor are able to live with some small modicum of dignity and financial stability is completely defensible. Further, I don't think anything about the current economic climate makes increasing Social Security taxes on the wealthy especially onerous. The extremely wealthy are doing more than fine right now, and taxing them a bit more to keep money in the hands of the elderly poor if anything would comparatively improve the economy rather than harm it, since those elderly poor are far more likely to immediately spend the money on products in the U.S. economy: exactly the kind of behavior we need more of. |
Let me clarify. Right now SS has an insurance character. People pay for their benefits up to a certain amount, and that amount corresponds with the maximum amount of benefits you receive when you retire. Social security is truly a safety net, it is less of a redistributionist welfare program. If the Left pushes it into that, I believe a relatively efficient system will come under fire. And frankly the right will have a point. SS isn't about ameliorating income inequality. Its about decreasing poverty among the elderly.
And although a few of the most right-wing pols attack SS, particularly Ron Paul, some of the most right-wing do not. The Paul Ryan plan, a right-wing budget proposal if there ever was one, left SS untouched.
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| By not proposing specific changes to Social Security, Ryan dodges expected arguments from Democrats who have repeatedly warned that the GOP intends to dramatically change a program popular with many voters and particularly senior citizens. |
The other staunch right-wing budget cutter, Rand Paul, also is relatively deferential to SS, declining to privatize it and proposing that the age be advanced to 70.
Actually, looking at it, I think Obama's plan is probably the most likely to pass right now. A later Democratic Congress can institute means testing. We'll see. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Tue Aug 23, 2011 3:45 pm Post subject: |
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a) extend the retirement age. This is my preferred solution. Make SS benefits accessible at 68 for both sexes. Allowing women to retire at age 62 is baffling in this age of equal opportunity. But we should recognize that at age 68, 75% of males and 85% of females are still alive and well according to actuarial tables. If we do this, we can fund the SSDI shortfall out of the general SS fund.
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I think we need a public discussion of this idea.
I agree that having different retirement ages for men and women is a silly holdover and should be abolished. That would probably be the least controversial (partial) solution. I'd like to see some statistics on the effect of raising the retirement age of women to 65. How much of the shortfall would be eliminated by that one step?
If 25% of men and 15% of women are already dead at 68, it looks like that age is too high. People should not be having to work until they collapse and are carried directly from the office to their deathbed.
I dislike the idea of a fixed retirement age. The stresses and strains of different types of jobs has to be considered, not to mention an individual's health status.
Another point. In a time like this of high unemployment, if we force older people to continue working, aren't we blocking young people from those jobs? There is a social benefit that can't be measured in dollars and cents in opening jobs to young people just starting out, wanting to get their professional and personal lives started, beginning families, buying homes, etc. Social cohesion is an important value and should be included in the calculation. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 5:00 pm Post subject: |
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| Kuros wrote: |
If someone can't work, let's say they work a blue-collar job that puts stress on their system, they apply for SS disability insurance. I'm advocating making those who can work, people with white collar careers or soft blue collar careers, to do so as much longer as longevity has increased because of health advances. Those who actually can't work until 68 can still apply early for SSDI.
Remember that for men born in 1960 or afterwards, SS benefits kick in at 67. We're talking about one more working year over a much longer lifespan. |
Yes, if people's bodies are literally broken from years of hard labor a recourse would remain available to them, but that's beside my point. Your (and President Obama's) proposal, at it's core is still cuts to the elderly working class poor to save the thriving upper class from slightly higher taxation. I don't see how, at a time of historic (and growing) income inequality, at a time when the justly-earned wealth of the elderly was just wiped out by an economic catastrophe, and at a time where even securing employment to tide the elderly over until their benefits can kick in can be a challenge due to a dearth of jobs, such a policy can be considered the way forward. We're taking people who all ready have little and saying, "Well, you can make due with a little less." A lack of income gains that should have gone to them over the years and which instead went to the wealthy all ready forces them to make due with less. The economic crisis wiping out the value of their investments forces them to make due with less. The high likelihood of pre-retirement-age unemployment eating into their savings forces them to make due with less. And if they really are living substantially longer as you say, all those decreases hit them even harder, because the diminished savings of their working years will have to last them longer. Why do they need to make due with less Social Security as well? Our society's economic situation does not mandate it.
Would the average elderly person survive the Kuros/Obama cuts to Social Security? Yes, but that doesn't make it acceptable social philosophy. How far down do these people have to be pushed before we'll even begin considering asking for some small sacrifices from those on top? You have talked about a willingness to see taxes increased to some extent, but Social Security is a perfect example of a place where a small tax increase could do a great amount of good! Keeping money in the hands of the elderly poor -- money which they will quickly spend on day to day goods and services -- is great from both an economic and a humanitarian perspective.
| Kuros wrote: |
| If the Left pushes it into that, I believe a relatively efficient system will come under fire. |
It's all ready under fire. It's been under fire by the extreme political right fairly consistently since it's introduction. It's only fear of voter reprisal that prevents the political elite from cutting it, and if the political Left caves to cuts, that voter reprisal will have very little way to legitimately manifest itself, defanging the threat to a large extent. Your own data shows that a strong majority of citizens support raising SS tax on the wealthy and oppose lowering benefits, and at least some (and probably a sizable) portion of the people who answered oppositely would surely still continue to support the program if their preferences were not followed. So let's not pretend that there will be some grass-roots uprising against Social Security if SS taxes on the wealthy are raised.
| Kuros wrote: |
| And frankly the right will have a point. |
Only if you think abstract philosophy trumps the very real conditions the elderly must live in. I, for one, do not; as a general rule, the value of social philosophy lies in the results it will produce, and the results of taking the elderly poor and making them poorer when we could easily avoid it aren't ones I see any merit in whatsoever.
| Kuros wrote: |
| SS isn't about ameliorating income inequality. Its about decreasing poverty among the elderly. |
Thank you for phrasing it that way, because that is exactly what it's about: decreasing poverty among the elderly. Social Security cuts work against that goal; reducing payouts -- especially at a time when, as I mentioned, other factors have all ready reduced the net potential wealth of the elderly quite substantially -- makes Social Security less effective at decreasing poverty among the elderly. We have a choice: make Social Security less effective at its stated goal, or raise taxation on the wealthy (either directly, or indirectly by denying them future potential benefits). I choose effectiveness, even if it comes at the philosophic cost of the wealthy paying in more that they could ever hope to receive back (although even with them, their retirement benefits are still insured, meaning it still has some value; not all of the wealthy are wealthy in perpetuity). Pursuit of this end is why it was reasonable to immediately begin paying out benefits on the first year of Social Security (resulting in many early recipients receiving more in benefits than they paid in in contributions by a enormous margin), and the pursuit of this end is also the reason why it's acceptable to have individuals pay more into the system than they could ever receive in return.
| Kuros wrote: |
And although a few of the most right-wing pols attack SS, particularly Ron Paul, some of the most right-wing do not. The Paul Ryan plan, a right-wing budget proposal if there ever was one, left SS untouched.
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| By not proposing specific changes to Social Security, Ryan dodges expected arguments from Democrats who have repeatedly warned that the GOP intends to dramatically change a program popular with many voters and particularly senior citizens. |
The other staunch right-wing budget cutter, Rand Paul, also is relatively deferential to SS, declining to privatize it and proposing that the age be advanced to 70. |
Let's be realistic here. I think we both know that these gentlemen would love nothing more than to at the very least fully-privatize Social Security, if not abolish it outright. They (Paul Ryan and Rand Paul at least) know, however, that if they want to achieve their ends regarding Social Security without swiftly getting booted out of office, they must either proceed in a slow, methodological fashion, or goad the Democrats into doing it for them (as they've done with Obama), because the general public largely shares my opinions on the importance of this program. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Tue Aug 23, 2011 5:22 pm Post subject: |
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| Fox wrote: |
[
The program is all ready politicized. It has always been politicized. As such, I don't think the threat of "politicizing" it should impact our decision. Taxing the wealthy to make sure the elderly poor are able to live with some small modicum of dignity and financial stability is completely defensible. Further, I don't think anything about the current economic climate makes increasing Social Security taxes on the wealthy especially onerous. The extremely wealthy are doing more than fine right now, and taxing them a bit more to keep money in the hands of the elderly poor if anything would comparatively improve the economy rather than harm it, since those elderly poor are far more likely to immediately spend the money on products in the U.S. economy: exactly the kind of behavior we need more of.
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According to wikipedia the rich already pay more than their share
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States
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According to the IRS, the top 1% of income earners for 2008 paid 38% of income tax revenue, while earning 20% of the income reported.[43] The top 5% of income earners paid 59% of the total income tax revenue, while earning 35% of the income reported.[43] The top 10% paid 70%, earning 46% and the top 25% paid 86%, earning 67%. The top 50% paid 97%, earning 87% and leaving the bottom 50% paying 3% of the taxes collected and earning 13% of the income reported.[43] The Tax Foundation stated that for 2007, the top 1% of earners paid more than the bottom 95% combined.[44][45] According to former press secretary for President George W. Bush Ari Fleischer, the current income tax system, which is the government's largest revenue source, is too progressive and redistributive.[46] Fleisher and other critics argue that it is bad for our democracy to exempt half the country and disconnect such a percentage of voters from the cost of government, while also receiving the benefits of its spending.[46]
A report by the Tax Policy Center published in July 2009 projected that 47% of households would pay no income tax in 2009.[47] The percentage of households paying no taxes varied from 99.8% for those making under $10,000, to 21.5% making $50,000-$75,000, to 1.5% making more than $1 million. A followup report in July 2010 projected 22.9% would pay no net taxes in 2010, considering both federal income and federal payroll taxes (45% when considering only federal income tax).[48] It also projected that the number paying no taxes would be cut nearly in half if the tax code were simplified to eliminate deductions, credits, and exemptions. After the 47% number gained national media attention, David Leonhardt defended low federal income taxes on low-income people, citing the burden of other (often less progressive) taxes, including state, local, property and sales.[49]
While there is a correlation between wealth and income, these are often different groups with retirees making up the majority of high wealth holders and workers making up the majority of high income earners.[50][51] Thus a tax burden on high income earners is not consistent with a tax burden on high wealth holders.[50] |
^ a b c d McCormally, Kevin (2010-12-1 . "Where Do You Rank as a Taxpayer?". Kiplinger. Retrieved 20100-06-18.
^ Mark Robyn (2010-10-06). "Summary of Latest Federal Individual Income Tax Data". The Tax Foundation.
^ CATHERINE RAMPELL (2009-05-09). "Top 1% Paid More in Federal Income Taxes Than Bottom 95% in �07". New York Times.
^ a b Fleischer, Ari (2009-04-13). "Everyone Should Pay Income Taxes". Wall Street Journal. Retrieved 2009-04-14.
^ Roberton Williams (2009-07-02). "Who Pays No Income Tax?". Retrieved 2011-05-24.
^ Roberton Williams. "Why Nearly Half of Americans Pay No Federal Income Tax". Retrieved 2011-05-24.
^ DAVID LEONHARDT (2010-04-13). "Yes, 47% of Households Owe No Taxes. Look Closer.". NY Times.
^ a b Rampell, Catherine (2011-03-30). "Inequality Is Most Extreme in Wealth, Not Income". New York Times. Retrieved 2011-8-10. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 5:31 pm Post subject: |
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| When federal tax dollars of the sort your data is talking about can be used to fund Social Security, this will be a valuable stand-alone contribution to the ongoing discussion about Social Security. Until then, I suggest expanding your case by leaping from to this data to a suggestion regarding Social Security policy if you wish to participate. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Tue Aug 23, 2011 6:27 pm Post subject: |
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| Fox wrote: |
| When federal tax dollars of the sort your data is talking about can be used to fund Social Security, this will be a valuable stand-alone contribution to the ongoing discussion about Social Security. Until then, I suggest expanding your case by leaping from to this data to a suggestion regarding Social Security policy if you wish to participate. |
As you requested, here is my suggestion for funding the situation (and my reasoning for it below in the next paragraph)
Extending the retirement age for those who are able to work by 1-2 years AND restricting early retirement for such people does not seem unduly harsh or unfair.
Relying more and more on what is, in any case, a tiny segment of the overall society to finance the rest is nothing more than a Band-Aid solution. Long-term as more and more people retire and as medical advances extend their lives the tax burden on the rich will increase. Maybe even to the point where they or a fair number of them say " The heck with this" and just leave thus placing even more strain on the system. |
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Louis VI
Joined: 05 Jul 2010
Location: In my Kingdom
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| Posted: Tue Aug 23, 2011 6:41 pm Post subject: |
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Why is President Obama so Anxious to Cut Social Security?
Fiscal responsibility? To try and save it from the rubbish heap the Republicans would like to hurl it onto? To make it more manageable to continue to provide the assistance when the emerging demographics strain the system? To get a bill that will pass instead of an on-principle piece of unenacted legislation? |
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Leon
Joined: 31 May 2010
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| Posted: Tue Aug 23, 2011 6:50 pm Post subject: |
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| TheUrbanMyth wrote: |
| Fox wrote: |
| When federal tax dollars of the sort your data is talking about can be used to fund Social Security, this will be a valuable stand-alone contribution to the ongoing discussion about Social Security. Until then, I suggest expanding your case by leaping from to this data to a suggestion regarding Social Security policy if you wish to participate. |
As you requested, here is my suggestion for funding the situation (and my reasoning for it below in the next paragraph)
Extending the retirement age for those who are able to work by 1-2 years AND restricting early retirement for such people does not seem unduly harsh or unfair.
Relying more and more on what is, in any case, a tiny segment of the overall society to finance the rest is nothing more than a Band-Aid solution. Long-term as more and more people retire and as medical advances extend their lives the tax burden on the rich will increase. Maybe even to the point where they or a fair number of them say " The heck with this" and just leave thus placing even more strain on the system. |
This is not a practicle or desirable idea, especially during a period of high unemployment. If the elderly are forced to work longer then there will obviously be less jobs for the young. Therefore that type of idea hurts everyone. The elderly will have to work longer and have less enjoyable lives, the middle agged people will have to wait longer to advance in the positions held by the elderly, and the young will have less positions at all. Giving the elderly incentive to retire earlier would help the employment situation. Also it's a losing proposition to ask people to spend more and more of their lives working, as the purpose of life is fufilment isn't it? A very narrow portion of our society is winning, and has been, and has had it's need catered to more than others. To ask more of them, that have benefited most from society and the most from our form of government, is only fair and right. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 7:07 pm Post subject: |
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| TheUrbanMyth wrote: |
Extending the retirement age for those who are able to work by 1-2 years AND restricting early retirement for such people does not seem unduly harsh or unfair. |
Right, so take more from those who have the least to avoid having to take more from those who have the most. You can read my general response to this notion in one of my previous posts.
| TheUrbanMyth wrote: |
| Relying more and more on what is, in any case, a tiny segment of the overall society to finance the rest is nothing more than a Band-Aid solution. |
Calculating Social Security taxes off of 100% of everyone's income comprehensively relies upon the entirety of society (as opposed to right now, where it relies on, for the most part the working poor and middle classes, and barely touches the upper class). Calling a policy proposal which ensures Social Security's solvency as far into the future as it's mandatory projections consider a "band-aid solution" is not a reasonable use of the term.
| TheUrbanMyth wrote: |
| Long-term as more and more people retire and as medical advances extend their lives the tax burden on the rich will increase. Maybe even to the point where they or a fair number of them say " The heck with this" and just leave thus placing even more strain on the system. |
Empty class warfare rhetoric, and to be honest, the idea of the wealthy abandoning America at a time of historically low tax rates simply because Social Security is reconfigured to take their full income into account is preposterous. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Aug 23, 2011 7:33 pm Post subject: |
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| Leon wrote: |
| TheUrbanMyth wrote: |
| Fox wrote: |
| When federal tax dollars of the sort your data is talking about can be used to fund Social Security, this will be a valuable stand-alone contribution to the ongoing discussion about Social Security. Until then, I suggest expanding your case by leaping from to this data to a suggestion regarding Social Security policy if you wish to participate. |
As you requested, here is my suggestion for funding the situation (and my reasoning for it below in the next paragraph)
Extending the retirement age for those who are able to work by 1-2 years AND restricting early retirement for such people does not seem unduly harsh or unfair.
Relying more and more on what is, in any case, a tiny segment of the overall society to finance the rest is nothing more than a Band-Aid solution. Long-term as more and more people retire and as medical advances extend their lives the tax burden on the rich will increase. Maybe even to the point where they or a fair number of them say " The heck with this" and just leave thus placing even more strain on the system. |
This is not a practicle or desirable idea, especially during a period of high unemployment. If the elderly are forced to work longer then there will obviously be less jobs for the young. Therefore that type of idea hurts everyone. The elderly will have to work longer and have less enjoyable lives, the middle agged people will have to wait longer to advance in the positions held by the elderly, and the young will have less positions at all. Giving the elderly incentive to retire earlier would help the employment situation. Also it's a losing proposition to ask people to spend more and more of their lives working, as the purpose of life is fufilment isn't it? A very narrow portion of our society is winning, and has been, and has had it's need catered to more than others. To ask more of them, that have benefited most from society and the most from our form of government, is only fair and right. |
One of the divisions here may be our attitude towards work. I don't see it as a bad thing. When people retire, they have to stay active anyway, or some of them may die. Others will do just fine when they leave the workforce.
But again, the social security system allows for people to withdraw benefits early. And there are other programs that facilitate earlier retirements, such as 401ks and Roth IRAs. And then there's always old-fashioned saving.
But let me return to Fox. Fox, would you be for a solution that increases social security taxes by the percentage points necessary, but restricts it to the $106k cap? SS is a vehicle for reducing the poverty of the elderly, not for ameliorating wealth or earning inequality. As you chastised TUM, there are other methods for achieving those goals. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 7:43 pm Post subject: |
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| Kuros wrote: |
But let me return to Fox. Fox, would you be for a solution that increases social security taxes by the percentage points necessary, but restricts it to the $106k cap? |
I think it's a subpar solution which would produce inferior social and economic results when compared to my own preferred solution, but unlike pushing back the retirement date or cutting benefits via the Obama method, this is a political compromise I'd be willing to accept (albeit with bitterness) at the end of a negotiating process if that's the best that could be managed, though in an actual political negotiation I'd agitate for a smaller percentage-point increase coupled with a larger income-contribution cap (perhaps around $250,000) before breaking down and accepting it. The important thing is preserving benefits to a class of people who genuinely do need them. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Tue Aug 23, 2011 8:15 pm Post subject: |
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| I think the real battle is over the income tax code, and rightly so. SS works, is quite efficient, and has clearly achieved its verifiable goals. The President is not taking the path I would take, either, but at least he's showing leadership on this issue and addressing the shortfall. If nobody does anything, everyone's benefits will suddenly drop 23% in 2036, or probably sooner. |
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