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My simple Social Security "fix":

Discussion in 'Government Offices and Programs' started by fairsheet, Nov 9, 2012.

  1. fairsheet

    fairsheet Senator

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    -this one might work just as well for Medicare.

    #1 - We need to eliminate the "cap". The tax must apply to all earned income.

    #2 - We should extend the tax to capital gains. Unless we do that, we'll be disappointed at the extent to which the rich can shift their exposure. And..my #3 won't work.

    #3 - Having accomplished #1 and #2, we should reduce the rate significantly. IF we do #1 and #2, this should be easy. In doing so, we'll provide a significant and "permanent" taxcut for not just paycheck earners, but paycheck payers. And, we'll make this rather radical change, more palatable to those who're newly exposed.
     
  2. OldGaffer

    OldGaffer Governor

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    Social Darwinist, plutocrat lackeys and lickspittles will hate your idea. Their credo, every man for himself, devil take the hindmost and trust in Supply Side Jesus.
     
  3. 888888

    888888 Council Member

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    well since republicans don't like SS maybe they would just like to keep their 7% and opt out.
    We will continue to capture the 7% from the owners as we shore up the SS trust fund.
    Then we do a test for wealth that if your total wealth is over 5 million dollars your checks are kept in the system, and you live off your wealth. If your income is over 75,000 for tax purposes you lose one dollar for each dollar over until the SS payment is gone.
    Then we shore up the medical part, and start looking at what Dr's are charging and straighten that part out.
    This could be a start with more coming if needed.
     
  4. 888888

    888888 Council Member

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    I love that last dollar amount for wages, it wouldn't have to be for businesses, they just the natural increases we have now. But would love to see the capital gains and carried interest be captured at least on the individuals.
     
  5. connorbug

    connorbug Council Member

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    Well, that's about right, sextuple 8, if you want to maintain benefits as the contributor to payee ratio slides from 3:1 to 1.9:1 you're going to need to increase the contribution rate. It'll work, but don't expect that to be a consequence free imposition.
     
  6. NightSwimmer

    NightSwimmer Senator

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    The nation faces a temporary imbalance in the SS system. Unfortunately, we old baby boomer farts won't live forever. Balance will return to the system over time.
     
  7. connorbug

    connorbug Council Member

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    If you told me to save 15.3% of my income on a fund completely invested in government bonds, I'd sue you and probably convince a judge that you breached a fiduciary duty to me.
     
  8. OldGaffer

    OldGaffer Governor

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    How about if it included an insurance policy that would take care of your wife until she died and your kids until they were 18? Also a disability policy that would pay you like AFLAC for the rest of your life? Social Security has never been just a retirement fund. Before SS 75% of seniors lived in abject poverty, now its about 25%, still shitty, but at least they closed down the poor houses and the workshops.
     
  9. connorbug

    connorbug Council Member

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    None of which are actually desirable in light of the price.
     
  10. OldGaffer

    OldGaffer Governor

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    Not all employers would pay you 7% if not required by law, so you probaly would only have your 7%, and if you have shit happen in your life, that 7% could be gone,gone,gone. With SS you dont have to worry about losing it as long as Paul Ryan and the teabaggers do not get control of it.
     
  11. connorbug

    connorbug Council Member

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    Being on both ends, pretty sure I could count on myself, but I'd opt out for the 7 too.
     
  12. OldGaffer

    OldGaffer Governor

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    From history, we know that 50% more seniors would be in poverty without social security, that is a good enough reason to have it as far as I am concerned, would some some few individuals do as well or better without SS? Maybe, but the vast majority are better off with it.

    553251_567930259884623_277178006_n.
     
  13. connorbug

    connorbug Council Member

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    Well, actually we know quite conclusively that the program has run a surplus, literally paying out trillions LESS than people put into it. So, statistically, we know that on average the average outcome is that the person would be worse off. Otherwise there wouldn't be a surplus or a trust fund.

    Now, the situation is reverse, the payments are exceeding the contributions, or at least I think we've crossed over, or are soon goong to, still....there's trillions there and these turkeys have exclusively invested it in government bonds. Smart move.

    The retorement aspect of the system is age based, not income based, though they might do means testing, tax benefits etc which will make the social security benefit somewhat contingent on income. If poverty mitigation is your goal, then have poverty mitigation through a welfare system for poor people and if they're old, then they're old.

    Its a defined benefit system designed for a pyramid population structure that is on a slow implosion course due to our aging demographics and the narrowing of our population.

    If it were such a good deal, why don't you make partaking voluntary and instead of having laws compel participation, let people voluntarily sign up? Because liberals know what's best for you, right?
     
  14. fairsheet

    fairsheet Senator

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    N-Swimmer, you've brought up another one of those little "secrets" that nobody - GOP or Dem - talks about. The baby boom "problem" was acknowledged, confronted, AND addressed back in the 80's. Our's is the first generation that's paying for both the prior generation AND our own. And on that note, all thise whiney-assed post-baby boomers can go [Unwelcome language removed] themselves. Oh...I got off track there...

    Anyway, the baby boom was "solved" 30 years ago. But now, we're "talking" like it just occurred to us! Funny thing is....there's actually the possibility that at some point, the post-baby boomers could end up paying LESS, since they won't have to worry about front-loading for a bubble.
     
  15. cricket

    cricket Council Member

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    totally irrelevant. there neither is nor isnt "social security'. its a blurb in your mind. all tax and all spend is a wash. govt is 100% financed by deficit. social security is not place that can "looted", or "saved" or "run out of money"- its just a computer program, literally.
     
  16. trapdoor

    trapdoor Governor

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    1) Turns it from an insurance program to a "tax the rich for poor people's retirement" scheme. Avoiding this perception was the reason the cap was put in place.

    2) At what rate?

    3) A moot point as neither options 1 or 2 is politically feasible.
     
  17. Joe Economist

    Joe Economist Council Member

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    First, you are radically changing the concept of Social Security. It was originally suppose to be Social Insurance which is self-funded. FDR said that we put the contributions in to ensure that workers have "a legal, moral, and political" right to benefits. If we are going to go this far from the point, we might as well change the name.

    Second, while you may fix Social Security you will make the country less able to deal with the debt. When you raise the payroll taxes, you are diverting taxbase away from the general fund which could be used to control the deficit.

    Third, you aren't taxing the rich more. By perserving the debt, you are taxing future generations the people on whom Social Security depends. So whether it works or not it isn't a very good idea.
     
  18. Joe Economist

    Joe Economist Council Member

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    The payroll tax is 15.3% of which Social Security's portion is 10.6%.

    "We will continue to capture the 7% from the owners as we shore up the SS trust fund."

    Social Security hasn't been cashflow positive on an operating basis since 2009. We are living off of interest, and that is about to change living off of principal.

    "Then we do a test for wealth that if your total wealth is over 5 million dollars your checks are kept in the system, and you live off your wealth. If your income is over 75,000 for tax purposes you lose one dollar for each dollar over until the SS payment is gone."

    Social Security has been means tested since 1984 with a test that reaches up to 1/3rd of retirees. In 2012, that saved the system about $25 billion.

    As a sidenote, FDR said that we put the contributions in to ensure that every worker had a 'legal, moral, and political' right to benefits so that no damn politician could scrap the program. Your ideas are what FDR feared. If you are going to end the program, change the name as well.
     
  19. Joe Economist

    Joe Economist Council Member

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    Not according to the Trustees. There is a 20.5 trillion dollar shortfall (Page 15 of the Trustees report). Only 8.6 trillion occurs in the next 75 years.
     
  20. Joe Economist

    Joe Economist Council Member

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    Connerbug,

    You are right, and it wouldn't take a lot of convincing to get the judge to throw the fiduciary in jail when he finds out that he bought bonds in his own business.

    Social Security's portion of the 15.3% is actually 10.6%. Very little of that money is invested in anything. Nothing of your contribution has been invested since 2009 - when the system stopped generating excess cash on an operating basis. Income on payroll taxes is less than the outflow of benefits.
     

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