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Social Security--there, I fixed it

Just eliminate the cap, currently at $110,000 per year.

It is just unseemly that people making $700,000 annually (those last likely to face poverty in old age) are paying 0.97% in SS taxes while people making $30,000 or $40,000 a year are paying 6.2%.

Then you wouldn't have to be fiddling with cutting benefits for truly poor people.

Medicare tax doesn't have a cap--why?

by Anonymousreply 3412/31/2012

Genius! Unfortunately, nearly everyone who has voting power on this issue is a moron.

by Anonymousreply 112/30/2012

OP, are you ready for SS to pay a $175,000 annual benefit to that person who was making $700,000 and paying in? If not, then are you ready to call SS what it really is, a welfare program for the elderly?

by Anonymousreply 212/30/2012

R2, with all due respect, you are a blithering idiot.

Social Security Insurance most certainly is not a welfare program for the elderly. Demagogues like you should be horsewhipped, drawn, and quartered.

by Anonymousreply 312/30/2012

The Medicare tax is 1.45 percent. The social security tax is over 12 percent. Bumping up the threshold would massively raise taxes on everyone including the middle class. But other than that it is a great idea.

by Anonymousreply 412/30/2012

R3, so you actually think there's a trust fund? How quaint.

by Anonymousreply 512/30/2012

I had a True Socialist prof in college who explained that Social Security was true socialism is the purest, fairest, best way that just about anyone would accept .. except for one thing: the cap. As a wretched conservative myself, I've agreed with that all these years. It could be fixed quite easily - adjust the tax so it goes all the way up, BUT limit the payments to the maximum they are now. Who's going to bitch, somebody making a $million a year? Let him.

As R3 can tell you, it will guarantee solvency until most of us are long dead.

by Anonymousreply 612/30/2012

There would be a trust fund if it had not been used to fund so many repuke wars R2. Now go back to faux noise where you belong.

by Anonymousreply 712/30/2012

Rich people will always be able to hire people to find loopholes for them. It doesn't matter whether you have an R or D by your name, every rich person does it. Hollywood stars, rich politicians like John Kerry and business people.

If Hollywood alone was forced to pay the taxes they should be paying, there wouldn't be much of a fiscal problem.

by Anonymousreply 812/30/2012

[quote] If Hollywood alone was forced to pay the taxes they should be paying, there wouldn't be much of a fiscal problem.

You ARE aware that the majority of Hollywood tax breaks come from state and local tax authorities, not the federal government, right?

by Anonymousreply 912/30/2012

[quote]You ARE aware that the majority of Hollywood tax breaks come from state and local tax authorities, not the federal government, right?

Only because they all whine so much it is the only way to shut them up.

For now.

by Anonymousreply 1012/30/2012

Another idea...

Cut the military's budget, raise taxes on the wealthy.

by Anonymousreply 1112/30/2012

R10? If one state doesn't give them tax breaks, they will move production to a state that does. And there goes a LOT of jobs and, depending on the state, they HIGHER SS tax revenues than where they move to.

by Anonymousreply 1212/30/2012

They are already moving jobs out of state/country.

We will get them.


by Anonymousreply 1312/30/2012

R4 has a bizarre notion of who the middle class is, apparently.

by Anonymousreply 1412/30/2012

Well, isnt' Obama planning to get rid of it?

by Anonymousreply 1512/30/2012

[quote]You ARE aware that the majority of Hollywood tax breaks come from state and local tax authorities, not the federal government, right?

Actually I was referring to taxes on the actor's salaries. How many Hollywood actors make more than a million per picture? Where is all that money in taxes?

by Anonymousreply 1612/30/2012

Actually, social security isn't really a problem yet (it's only a problem in that Congressional Republicans have swiped money from the trust fund to fund wars and tax-cuts for the rich). The program operates at a surplus now, and doesn't contribute one dime to the deficit. It will continue to operate at a surplus for many years, and even after that, will be able to pay out full benefits for many more.

So we can certainly amend OP's plan a bit... just raise the cap to $200k/year. Then raise the cap by $10k/year, every year there-after, until it hits $500k/year It's nice and predictable, raises all the revenue necessary to keep the program solvent for the foreseeable future, etc.

by Anonymousreply 1712/30/2012

There you go, R17, being sensible and smart. These people don't deserve you.

by Anonymousreply 1812/30/2012


r17, then why is the President, along with many Congressional Republicans AND Democrats, "cutting entitlements" via the introduction of this chained CPI measure?

And does anyone know why it is that we can reduce benefits (because people will buy cheaper chicken instead of expensive beef) but give fuck all that home heating, gasoline, and medical costs don't go down?

by Anonymousreply 1912/30/2012

R19, they aren't. Duh. Please do keep up.

Oh, and a total "quote" fail there.

by Anonymousreply 2012/30/2012

R2, I'm well aware that the alleged SS Trust Fund has been non-existent for years. The mainstream news media outlets in this country dare not let this dangerous cat out of the bag; they are corporate hacks.

An Obama/Biden 2012 campaign commercial called Social Security a "promise" and a "commitment" when it is neither.

R2, you should also be aware that your original post is in error since there is a monthly SS retirement benefit cap. Hence, your propaganda that fully-taxed, high-income beneficiaries might receive six-figure annual pensions from Uncle Sam is patently absurd and preposterous.

To address the OP's original post:

Almost without exception, all employers have used alternate compensation methods for upper-income earners to render removal of the SS tax earnings cap ineffective. In the current political climate, Congress doesn't have the fortitude to pass necessary legislation to "capture and tax" all forms of compensation if the cap were removed.

Your proposal is somewhat correct and should have been executed 30 years ago, but we all know who was then in the White House saying "there's nothing with government deficits."

Removal of the SS tax earnings cap is not a "magic bullet" because individuals who are paid well into 6 figures or more take only part pay in taxable wages and "exempt compensation packages" satisfy the balance. Nice work if you can get it, eh?

By the way, R2, i'm not an eldergay.

by Anonymousreply 2112/30/2012

[quote]Removal of the SS tax earnings cap is not a "magic bullet" because individuals who are paid well into 6 figures or more take only part pay in taxable wages and "exempt compensation packages" satisfy the balance.

Then deal with that fuckery too.

by Anonymousreply 2212/30/2012

Exactly r22. I'd like to see Donald Trump pay enough tax to support a MILLION old folks on SS.

by Anonymousreply 2312/30/2012

Let me correct a misimpression. I am in favor of Social Security. I just think we ought to tell the truth about it. There has never been a trust fund, and in fact it would be impossible for there to be one because of the nature of "savings."

People can be forgiven for thinking that banks, for example, store their money. But that's not what they do. Banks are just a form of low-risk investment. There's no vault. They only keep enough cash around to take care of daily withdrawals. Everything else gets put into various kinds of loans.

At the national level, this is even truer. You cannot "store" trillions of dollars in a trust fund or anywhere else. It is simply not possible, no matter how much anyone wants to believe it. This isn't "tea party economics." (I loathe the Tea Party, but that's a different discussion.)

The whole trust fund/personal account story is brilliant political fiction aimed at making Social Security bulletproof. It has worked well, and will keep working well. But it's still political fiction.

The problem with removing the caps but keeping the benefits capped is that it would be visibly and grossly unfair. Now, I'm not crying crocodile tears over the unfairness, but if you remove the cap and then turn around and tell the $750,000 income earner (and the whole country) that these people will pay full freight but get one-seventh of the benefits that the formula would otherwise give them, it will badly undermine the political fiction of a trust fund/bank account/insurance plan that everyone pays into and everyone take out from.

What will happen is that the rich, who control the media, will turn around and say, "See? We told you all along that this was never a savings plan at all. It's just another welfare plan."

There has always been a mild level of progressivity in SS, i.e., benefits not increasing lock-step with incomes. But it's mild. Remove the caps but freeze the benefits, and it will become stark.

If you really want to preserve Social Security, this is not a smart idea. There are plenty of other ways to soak the rich, but don't do it through Social Security or you'll destroy the political foundations of the "shared savings program" fiction that it's built on.

I realize that I've just offended the shit out of people here, but in a past life I studied the bejeesus out of Social Security. I'm a big proponent of it, and think it ought to be preserved. But it rests on a political foundation that requires universality, and the minute you monkey with that then you endanger the whole foundation.

by Anonymousreply 2412/30/2012

[quote]The problem with removing the caps but keeping the benefits capped is that it would be visibly and grossly unfair.

Really, r2, like the obscenely unfair flood upwards of wealth that has happened over the last 40 years


by Anonymousreply 2512/30/2012

Great post, R25.

For those who are opposed to redistribution of wealth and income from the wealthy to the poor, just as unfair (if not more so) is redistribution upwards, which is exactly what has happened to the tune of tens of trillions of dollars not just in the USA, but across the Western world in the past three decades.

Regardless that R2 "in a previous life studied the bejeesus out of Social Security," he or she obviously does not fully comprehend the Federal Reserve System, the Federal Budget, or the workings of the Social Security System when it was still "carried off-budget."

More importantly, what is really broke and causing a drain on the General Fund is Medicare (Part B). This is going to have to be resolved somehow, as the current system is unsustainable; you'll see why.

According to 2006 American Medical Association data, primary care physicians "earned" an average annual salary of $171,500, dermatologists averaged about $440,000, and pain management specialists averaged over $270,000. These are personal salaries, not incomes of practices! Why is there any confusion why Medicare is broke, broken, and needs fixing, not to mention our entire healthcare system?! An internist is paid many times over what a typical public school teacher earns. What does this say about our society and its values?

The foregoing "inequities" paid for primarily by the sweat of America's working poor and middle class have to stop! Please take action and write to your elected officials, as well as to the AMA and ADA.


by Anonymousreply 2612/30/2012

Actually, R12, I am intimately (intellectually, that is) familiar with all of what you mentioned. This being the Datalounge, and I having long experience with it, I'm not going to give biographical detail. But if I did, I think you'd see that I know what I'm talking about.

In my prior responses, I was talking about the SS Old Age fund. It is separate from the disability fund, and SSI (supplemental security income, administered by the Social Security offices but funded through the general fund), and Medicare and Medicaid.

To analyze those, you have to take them each separately. As far as the federal budget goes, I'm quite familiar with it at the level of detail that would make most people's (peoples'? -- I can never figure out what's correct) glaze over.

I completely "get" the inequality story. More than you know, I'd bet. My point about SS is narrow: Don't try to address it or the federal budget by raising the income cap while holding the benefits constant.

If that happens, the last remaining dam that shields what's left of this country's middle class will burst. I am [italic]entirely[/italic] in favor of going after inequality, but not that way.

Some people will say, "Why does it matter how we do it?" My answer is to look at our politics, which increasingly resembles a circus. The last remaining "Hoover Dam" is the Social Security old age pension formulas. Fuck with those at your peril.

by Anonymousreply 2712/30/2012

[quote]Don't try to address it or the federal budget by raising the income cap while holding the benefits constant. If that happens, the last remaining dam that shields what's left of this country's middle class will burst. I am entirely in favor of going after inequality, but not that way.

Huh? In what POSSIBLE way?

by Anonymousreply 2812/30/2012

R2, thanks for having a civil exchange on these important matters.

I generally agree with parts of your most recent post, but you are missing my valid points. Yes, I'm primarily talking about OASI.

First, a trust fund does not need "trillions of dollars just sitting around" to be called and considered a trust fund. And yes, it existed, but you don't seem to understand complex accounting and how the federal government keeps its internal books (as opposed to what's discussed by the media).

Next, I consider it essentially illegal for the outgoing Johnson Administration's and incoming Nixon Administration's backroom deal permanently placing all of SS "on-budget" so as to conceal the general fund's huge deficits and hide the costs of the Vietnam War from the unsuspecting public.

SS OASI had an accounting surplus of hundreds of billions last I saw, but there is no cash. Maybe you know the event that "swiped" the cash which belonged to the SS Trust Fund? There is a huge "IOU" from the Treasury to the empty SS Trust Fund even though the government insists the latter is intact and safe. There's not even enough gold in KY and NY to cover only reimbursement of simple SS pay-ins that the Treasury owes taxpayers.

It appears that monthly OASI benefits will have to be cut, which I assume you have been suggesting. Americans need to wise up, get off their butts and take action, but that's not going to happen. Like ostriches with heads in sand, many still believe GOP rhetoric that taxes should be cut, the party can continue acting like spoiled children, and things will somehow be alright.

Were it not for the overwhelming national debt, old age pensioners would receive benefits under current formulae far into the future. I am not privy to all current projections, but the same thing will probably happen as in 1981-82: OASDI tax rates will have to be increased and benefits will have to be cut because the government simply doesn't have enough cash flow into the general fund thanks to incessant tax cuts and recession!

My concern since entering college years ago has been the national debt; someone is going to have start paying up big time and soon. The poor, working, and middle classes have been squeezed for their last drop and the wealthy will protest with their financial power backing them. That's why to me, the Social Security problem is "in the background."

Lastly, about the wealthy, SS caps and payments, you are not taking into account the actual tax burden borne even if the rich countered with the "welfare program argument." They do exactly that now with income tax by hawking about how they pay the majority of income taxes, but they most certainly do not bear the majority of the tax burden.

by Anonymousreply 2912/30/2012

R14, if you raise the cap but freeze the benefits, what you're really doing is raising the tax rate on the high income earners but without saying so directly. Instead, it would go through the Social Security pipeline, and all the controversy and resentment would undermine what otherwise is very widespread support for SS.

Instead, just raise taxes directly. I support that. If the Democrats don't have the courage to do it, then to do it through SS and thereby undermine the foundations of the program would be counterproductive, to put it mildly.

As far as other things to address inequality, well, let's see. The baby boomers and subsequentn generations think they're too smart to join a union, so that proven escalator to the middle class is busted. So maybe an alternative is to raise the minimum wage to what it was in the late 1960s, adjusted for inflation -- about $12 an hour.

It would also be a good idea to disallow corporate business expense deductions on executive compensation above $500,000 a year, and to find some ways of leaning on pension funds and other institutional investors to get tough on executive comp.

Those are just a few things off the top of my head. Undermining Social Security's political underpinnings to pursue economic insecurity is superficially appealing, but in my opinion a very, very misguided strategy.

by Anonymousreply 3012/30/2012

R15, I have an accounting degree and understand quite well what a trust fund is. There has never been a Social Security trust fund and there never will be. If you want to accept the fiction, go right ahead. But every knowledgeable person who's ever looked at it agrees with that I just wrote.

I do NOT think OASI benefits need to be cut. You are making unfounded assumptions about both my specific views and my broader politics. Again, I'm not going to give you my biography, but when you tell me I don't understand intergovernmental transfers, I don't know whether to laugh or whether to lash out.

Before I get more irritated than I already am, I'll end it right now.

by Anonymousreply 3112/30/2012

Thank you for ending R2.

Then I will restate:

Raising the contribution cap on Social Security now, while unfair now, begins to repair the GREATER unfairness to the American Middle Class since the Reagan Administration.

A fifty% tax rate on income and capital gains over $200K seems like a nice next step.

Draconian, yes, but it is the American version of the Financial French Revolution.

'Guillotine, guillotine' has been replaced with 'Tax them, Tax them!'

Let the streets run green with their capital!!!

May they have to live on their children's trust funds!

May they not have money to pay for the repair of their automobile elevators!

by Anonymousreply 3212/31/2012

r11, Obama hates the military. He's already slashed their budgets.

by Anonymousreply 3312/31/2012

You don't have to hate the military to knoe that the build-up over the past two unnecessary wars must be drastically scaled back.

The fundamental financial gains that made the Clinton surplus possible was the peacetime reduction of the military.

As we exit Afghanistan, a prudent fiscal measure would be to, again, reduce the military.

Obama, loves the soldier, hates the military financial waste.

Got that residual freeper at r33?

by Anonymousreply 3412/31/2012
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