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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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 Posted: Tue Aug 23, 2011 9:02 pm Post subject: |
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| Fox wrote: |
[q
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. |
http://www.dailyfinance.com/2010/07/20/more-rich-americans-renounce-u-s-citizenship-for-lower-taxes/
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The Wealthy Have Been Quitting for Years
Wealthy people have been quitting their American citizenship for tax reasons for years. Tennessee-born mutual fund investor John Templeton did it in 1968. He died in 2008 in the Bahamas at the age of 95. John Dorrance III, grandson of the founder of Campbell Soup (CPB), quit being an American, as did members of the Getty Family. Companies including Tyco (TYC) and Transocean (RIG) have done the same thing |
Preposterous? Maybe...but it has happened and is happening.
And might I just point out though that if your proposals WERE to be adopted these "historically low tax rates" would no longer be so low.
Not only that but according to some estimates about 3 million Americans a year are becoming expats.
http://www.usnews.com/news/articles/2008/07/28/a-growing-trend-of-leaving-america?PageNr=1
Who are these people? No idea but if you read the article you'll notice that almost everyone cited in that article seems to be a fairly successful (if small) entrepreneur.
Of course not everyone moving abroad is an entrepreneur or leaves for economic reasons...but it does add up to lost taxes and lost human talent. And it underscores my point that if they can leave...why not the wealthy as well?
http://blogs.wsj.com/wealth/2011/06/13/are-taxes-causing-the-rich-to-renounce-their-citizenship/?mod=WSJBlog
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| The IRS doesn�t tell us why people expatriate, or who they are or where they go. Lawyers say most are wealthy Americans who have expatriated to all manner of countries. |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Tue Aug 23, 2011 9:27 pm Post subject: |
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Social Security is the only federal program that produces about $150 billion yearly surplus, the only program that shows every sign of being self-supporting and solvent for over 30 years to come yet is repeatedly derided by its enemies as being in danger of insolvency.
Social Security takes nothing from other sources of revenue.
Social Security is a highly efficient program with administrative costs of around 1%, far lower than in private pension programs where typically administrative costs are around 13%. They also never miss a cheque.
Social Security also provides disability insurance and survivors insurance for children whose parents meet with fatal accidents, although the debate never mentions these, focusing only on the pensions side of it.
In other countries where social security programs have been privatized, people often found that contributions were higher and payouts lower as, surprise surprise, the private pension companies were interested only in profits for themselves. |
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Fox
Joined: 04 Mar 2009
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| Posted: Tue Aug 23, 2011 10:05 pm Post subject: |
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From the article:
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As many as 743 people with American citizenship or legal resident status renounced their U.S. citizenship in 2009 -- three times as many as in 2008 -- which resulted in a waiting list for people to say farewell to the red, white and blue at the U.S. Embassy in London, according to the Financial Times. That represents a tiny fraction of the 7 million or so Americans living abroad, but does underscore the growing unease about the Obama administration's taxation policies among the wealthy, according to experts.
Many of those leaving the U.S. behind have dual nationality and may not have lived in the country for years. Others have lived overseas for so long that America no longer feels like home. |
So let's stop pretending this has anything to do with the class warfare propaganda you've made the unfortunate choice to throw in behind. A few hundred dual citizens and long-term expats giving up their citizenship is not what you were talking about. More importantly, these people are bailing on America at a time, as I said, of historically low taxes, which is the exact opposite of what they should be doing based on your tax-rate driven theory of the citizenship choices of wealthy individuals; they don't prove taxes drive citizens out of the country, they prove that some citizens simply decide to move for reasons of their own.
People like you, for the most part. Guys who move abroad in search of employment, many (but not all) of whom will come back to America someday, bringing their earnings with them. These individuals also remain American citizenship and are subject to American taxation (if they earn over a certain amount), so they aren't even relevant to your case until or unless they take the next step and give up their citizenship, something a previous article you posted all ready shows the overwhelming majority of them don't do.
| TheUrbanMyth wrote: |
| And it underscores my point that if they can leave...why not the wealthy as well? |
Anyone can leave. It's not about what people can do, it's about what they will do. A quick glance at reality shows that people are more reticent to permanently leave their country, especially when it's a country whose conditions are so favorable them that they were able to amass a huge and continually-growing amount of wealth there. Coming from a wealthy family myself, I've seen first hand just how attached many upper-class people are to their home country; my father and his country-club buddies would never leave America, and the same is true of the overwhelming majority of upper class families. And why wouldn't they be attached to their homeland? It's been great to them, and even if we taxed 100% of their income with regards to Social Security, it would still be great to them. This isn't some Ya-ta Boy-style 91% top rate suggestion here. The idea that the wealthy are going to flee the country en masse over expanded Social Security taxes is vapid. I've discussed it as long as I will, and longer than I would have cared to. Good day. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Aug 24, 2011 2:28 am Post subject: |
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| Quote: |
| This isn't some Ya-ta Boy-style 91% top rate suggestion here. |
I'm not married to 91%, like it was when the middle class was healthy, growing, and thriving. If the opposition wants to make an offer...for example, extending the payroll tax cap up to...well, make an offer. My return bid would be 85%.
BTW, if there are some rich who would leave the country because their taxes are too high, I would be quite happy to personally hold the door open for them...although I might slam it on their heiny before they are all the way out. They are not the kind of people we need.
Entrepreneurs who create wealth should be admired. I have no problem with them. I have a problem with people who benefit enormously from living in the country and then begrudge paying for the privilege. I'm just not fond of freeloaders. Sue me.
We have deliberately arranged an economic system that pushes the wealth to the top and now we are in a situation where that small percentage of people cannot consume enough to drive the economy. It is not sustainable.
To address the thread title: I am not certain of Obama's strategy. It looks like his timing is off. Way off.
It makes sense to re-jigger the system when you have a responsible opposition that works to make the system better. The present opposition is not interested in fixing the system. They want to destroy Social Security. (When their supporters aren't screaming about keeping government hands off Medicare).
It would be much better to wait until after the 2012 election and hope for a more responsible Congress. (Not to mention waiting until the economy is in better shape. It is foolish to do things in a panic when it is not necessary. Unfortunately, the politics of fear and hysteria are too powerful.)
Even Dave Weigel's eyebrows are going up because of the new GOP attitude to taxes:
On Sunday, in an interview with the Wall Street Journal, Huntsman found himself in a virtual love-in with Rick Perry and Michele Bachmann over, of all things, taxes. The paper asked Huntsman if "the half of American households no longer paying income tax�mainly working poor families and seniors�should be brought onto the income tax rolls."
He agreed, crediting the GOP's current front-runner for vice president, Sen. Marco Rubio, with the insight that "we don't have enough people paying taxes in this country."
The Journal called this position the "new GOP orthodoxy," which it is.
http://www.slate.com/id/2302131/pagenum/all/#p2 |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Aug 24, 2011 3:55 am Post subject: |
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This quote is just toooo delicious to pass over:
From a Romney donor:
"It is not healthy for rich people to feel maligned," the executive said.
http://www.msnbc.msn.com/id/3096434/#44251064 |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Aug 24, 2011 6:00 am Post subject: |
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| Privateer wrote: |
Social Security is the only federal program that produces about $150 billion yearly surplus, the only program that shows every sign of being self-supporting and solvent for over 30 years to come yet is repeatedly derided by its enemies as being in danger of insolvency.
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Wrong, wrong, wrong. SS is already running a deficit because of the recession and is scheduled to become insolvent within the 2030s. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Aug 24, 2011 7:24 am Post subject: |
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More Budget Foxes, Fewer Hedgehogs
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The hedgehogs know one big thing: These programs provide major benefits. Social Security, for example, has dramatically reduced poverty among seniors and provides essential income to millions of retirees.
Inspired by that one big thing, hedgehogs oppose any benefit reductions, such as increasing the eligibility age or trimming benefits to reflect increased longevity.
Entitlement foxes have a more nuanced view. They recognize, like the hedgehogs, the value of the guaranteed retirement income that Social Security provides. But they also know that the number of retirees receiving benefits is growing faster than the number of workers paying payroll taxes. They know that Americans are living longer but retiring earlier. They know, in short, that the future will be different from the past and that the program needs to evolve to remain sustainable. Foxes are thus open to ideas like raising the eligibility age or changing the benefit formula. |
Fox is actually an entitlement hedgehog, but don't be confused. |
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Fox
Joined: 04 Mar 2009
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| Posted: Wed Aug 24, 2011 3:20 pm Post subject: |
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Interestingly, just two days before Kuros' article was posted, "Why America Is Deeply in Need of a Good Hedgehog" was posted on Huffington. I wonder if the article Kuros posted is meant as a kind of rebuttal. Putting aside the actual content of the article (which you can read if you like), it also includes a depiction of the Fox/Hedgehog dichotomy, written by Isaiah Berlin:
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Back in 1953, British philosopher Isaiah Berlin famously laid out two opposing styles of leadership -- hedgehogs and foxes -- taking his cue from a line in an ancient Greek poem by Archilochus: "The fox knows many things, but the hedgehog knows one big thing."
According to Berlin, the fox will "pursue many ends, often unrelated and even contradictory, connected, if at all, only in some de facto way." In contrast, the hedgehog offers an "unchanging, all embracing... unitary inner vision." |
Based on Isaiah Berlin's depiction of the Fox/Hedgehog dichotomy, I certainly do proudly claim Hedgehog status. I do in fact derive my world view -- and thus, my political view -- from a "unitary inner vision" of sorts. Kuros calls me an entitlement Hedgehog, and to a certain extent that's true: caring for and ensuring a minimum standard of living for the vulnerable are a crucial part of my vision -- not the only crucial part, but crucial -- and entitlements are one of the surest and best ways to achieve that, resulting in my dedication to them.
You know who else is a Hedgehog? CE Forum Hero Ron Paul, the man many here would like to be President. And it's very clear that in many cases, it's the very traits that make him a Hedgehog that people admire. |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Wed Aug 24, 2011 8:59 pm Post subject: |
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| Kuros wrote: |
| Privateer wrote: |
Social Security is the only federal program that produces about $150 billion yearly surplus, the only program that shows every sign of being self-supporting and solvent for over 30 years to come yet is repeatedly derided by its enemies as being in danger of insolvency.
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Wrong, wrong, wrong. SS is already running a deficit because of the recession and is scheduled to become insolvent within the 2030s. |
From your link:
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| Social Security expenditures exceeded the program뭩 non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. |
They've been singing this song about how Social Security is in trouble for decades and yet this is the first time there's been a deficit. The reason for the deficit is clear: not enough people in employment. Fix the economy and that won't be a problem; and if the greying population really does become too much of a burden on the employed, taxes can be raised to make up the shortfall - or what would conservatives have people do? Move old people back in with their children to burden the employed that way? Kick them out on the street? |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Wed Aug 24, 2011 9:07 pm Post subject: |
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| Also, what is Timothy Geithner doing on the Board of Trustees for Social Security? Is that putting a shark in charge of the fish pond, or what? Do you think he just might possibly be less than neutral on this issue? |
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visitorq
Joined: 11 Jan 2008
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| Posted: Thu Aug 25, 2011 4:47 am Post subject: |
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| Privateer wrote: |
| They've been singing this song about how Social Security is in trouble for decades and yet this is the first time there's been a deficit. The reason for the deficit is clear: not enough people in employment. Fix the economy and that won't be a problem; |
The reason for that deficit is that Social Security is nothing more than a giant ponzi scheme, mathematically unsustainable.
| Quote: |
| and if the greying population really does become too much of a burden on the employed, taxes can be raised to make up the shortfall - or what would conservatives have people do? Move old people back in with their children to burden the employed that way? Kick them out on the street? |
It's not really about what people "want", it's about reality. The reality is that the unfunded liabilities of Social Security amounts to nearly $15 trillion (over $100,000 per household), with unfunded Medicare liabilities amounting to nearly 5 times that amount. At some point the house of cards will just collapse and a whole lot of people will be screwed. This is what happens when millions of people place their faith in the government for solutions instead of saving their own money. |
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Privateer
Joined: 31 Aug 2005
Location: Easy Street.
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| Posted: Thu Aug 25, 2011 7:57 pm Post subject: |
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Well it's odd that this mathematically unsustainable scheme has miraculously kept going since 1935, and that 2010 was the first year since 1983 that it failed to produce a surplus.
Even according to the predictions of those most hostile to it, it will still keep going until 2037. If this is a ponzi scheme, ponzi schemes can't be all that bad. And, by the way, who benefits from this ponzi scheme? So long as right-wingers in government keep their grubby little hands off the funds, it's the public that benefits. So the public is running a big scam on itself?
You also failed to answer my question, which was what will happen to old people if Social Security is privatized? The costs of supporting retirees will not just go away. Either you will have the elderly living in poverty, or continuing to work until they drop, or becoming an increasing burden to their children. Would you rather kick your grandparents out on the street, get a job mopping floors, or move in with you? I'd rather pay into Social Security, thanks. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Aug 25, 2011 9:41 pm Post subject: |
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| Privateer wrote: |
Well it's odd that this mathematically unsustainable scheme has miraculously kept going since 1935, and that 2010 was the first year since 1983 that it failed to produce a surplus.
Even according to the predictions of those most hostile to it, it will still keep going until 2037. If this is a ponzi scheme, ponzi schemes can't be all that bad. And, by the way, who benefits from this ponzi scheme? So long as right-wingers in government keep their grubby little hands off the funds, it's the public that benefits. So the public is running a big scam on itself?
You also failed to answer my question, which was what will happen to old people if Social Security is privatized? The costs of supporting retirees will not just go away. Either you will have the elderly living in poverty, or continuing to work until they drop, or becoming an increasing burden to their children. Would you rather kick your grandparents out on the street, get a job mopping floors, or move in with you? I'd rather pay into Social Security, thanks. |
It's unsustainable because the birth rate keeps falling and the lifespan keeps extending. By the time the baby boomers retire there will be only 2 workers per retiree. In 1950 there were 16 workers to one retiree.
So not only has the pool on a per ratio basis shrunk by 7/8ths since then but the benefits have increased along with the lifespan.
Something has to give sooner or later. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Fri Aug 26, 2011 1:35 am Post subject: |
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| Privateer wrote: |
| Well it's odd that this mathematically unsustainable scheme has miraculously kept going since 1935, and that 2010 was the first year since 1983 that it failed to produce a surplus. |
So? They also told you housing prices would never go down. You were lied to, and now we have to face up to the situation. Things are not going to be the same.
| Quote: |
| Even according to the predictions of those most hostile to it, it will still keep going until 2037. If this is a ponzi scheme, ponzi schemes can't be all that bad. And, by the way, who benefits from this ponzi scheme? So long as right-wingers in government keep their grubby little hands off the funds, it's the public that benefits. |
Ponzi schemes can keep going for a long time (just look at Bernie Madoff). The difference in this case is that the ponzi schemers run our whole society  That's why they haven't run out of new customers till recently.
Moreover, the public doesn't "benefit" any more than any of Madoff's clients benefited. Sure, the money comes in for awhile (for those lucky enough to have started on it early enough), but when it runs out, a whole lot of people are going to be screwed. There's no such thing as a free lunch, that's just the reality of it.
| Quote: |
| So the public is running a big scam on itself? |
In a word, yes. This is what happens when you trust the government more than you trust yourself.
| Quote: |
| You also failed to answer my question, which was what will happen to old people if Social Security is privatized? The costs of supporting retirees will not just go away. |
I don't have all the answers, I'm just describing the reality of the situation. Many people will probably just plain get screwed when they find that money isn't there.
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| Either you will have the elderly living in poverty, or continuing to work until they drop, or becoming an increasing burden to their children. Would you rather kick your grandparents out on the street, get a job mopping floors, or move in with you? I'd rather pay into Social Security, thanks. |
Personally I would make sacrifices to take care of my own parents no matter what (to the best of my ability). For many other retired people on their own it may mean they have to go back to work (sad, but the reason would be that their savings had been invested in SS instead of having been put away in a private fund). As for you preferring to pay into SS, again, with respect it doesn't really matter what you or anyone "wants" if the unfunded liabilities grow too big. At a certain point it just becomes unsustainable. The scheme is already projected to be trillions in the hole, and inflation is already making the SS payments go less and less far each year. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Fri Aug 26, 2011 6:36 am Post subject: |
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| TheUrbanMyth wrote: |
| Privateer wrote: |
Well it's odd that this mathematically unsustainable scheme has miraculously kept going since 1935, and that 2010 was the first year since 1983 that it failed to produce a surplus.
Even according to the predictions of those most hostile to it, it will still keep going until 2037. If this is a ponzi scheme, ponzi schemes can't be all that bad. And, by the way, who benefits from this ponzi scheme? So long as right-wingers in government keep their grubby little hands off the funds, it's the public that benefits. So the public is running a big scam on itself?
You also failed to answer my question, which was what will happen to old people if Social Security is privatized? The costs of supporting retirees will not just go away. Either you will have the elderly living in poverty, or continuing to work until they drop, or becoming an increasing burden to their children. Would you rather kick your grandparents out on the street, get a job mopping floors, or move in with you? I'd rather pay into Social Security, thanks. |
It's unsustainable because the birth rate keeps falling and the lifespan keeps extending. By the time the baby boomers retire there will be only 2 workers per retiree. In 1950 there were 16 workers to one retiree.
So not only has the pool on a per ratio basis shrunk by 7/8ths since then but the benefits have increased along with the lifespan.
Something has to give sooner or later. |
Or TUM, maybe you're missing something. Maybe we can just ignore everything you've said, claim any adjustments to SS are an attack on the program, and throw in some class rhetoric and political hyperbole for good measure. |
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