Fixing social security

[npaden]

I've popped into this thread a couple times and seen it run the gambit of expected straw man angles so I'm not sure if the points I'm about to make have been covered or not. I'm not going to go back and read through 21 pages of circular logic discussions to see.

The biggest issue with social security is the same problem most corporate defined benefit plans had. The baby boomers retiring. The other big problem is that people are living much longer than when social security was started. More people retiring than there were paying into the trusts.

I saw an infographic a while back that showed something like 8 people paying for every person being paid out in the 1980's and that has dropped to something like 2.2 people paying in for every person being paid out now. (Of course I can't find that data so take it with a grain of salt, but based on the 2 points noted above it seems plausible).

The answer to fixing social security is very complicated and I think it will take many different pieces to make it work. Higher tax, reduced benefits, etc. are all going to have to come into play.

On the straw man argument about raising the tax on the rich to cover it I saw this article this morning and thought it was pretty interesting.

https://www.wsj.com/articles/u-s-income-taxes-top-1-percent-irs-tax-foundation-joe-biden-fair-share-3394355b?mod=WTRN_pos4&cx_testId=3&cx_testVariant=cx_169&cx_artPos=3

The U.S. Already Soaks the Rich

In 2021 the richest 1% paid 45.8% of income taxes, up from 33.2% in 2001.​

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That's right, the top 1% paid almost half of the total taxes paid! Pretty amazing. Shockingly, unlike the anecdotal things you hear, or the 1 in 1,000 exceptions, across the board as people make more money, they pay a higher % of their income in taxes. The top 1% paid the highest percentage of their income in taxes.

We do live in a democracy though and it's always easy to just say to tax the people who make more than us to pay for things.

Oh well, I'm pretty discouraged on the whole thing. Partisan politics do not appear to be very good at actually solving problems that need to be fixed. That takes compromise and a willingness to work together to accomplish something.

 

[406dn]

I've popped into this thread a couple times and seen it run the gambit of expected straw man angles so I'm not sure if the points I'm about to make have been covered or not. I'm not going to go back and read through 21 pages of circular logic discussions to see.

The biggest issue with social security is the same problem most corporate defined benefit plans had. The baby boomers retiring. The other big problem is that people are living much longer than when social security was started. More people retiring than there were paying into the trusts.

I saw an infographic a while back that showed something like 8 people paying for every person being paid out in the 1980's and that has dropped to something like 2.2 people paying in for every person being paid out now. (Of course I can't find that data so take it with a grain of salt, but based on the 2 points noted above it seems plausible).

The answer to fixing social security is very complicated and I think it will take many different pieces to make it work. Higher tax, reduced benefits, etc. are all going to have to come into play.

On the straw man argument about raising the tax on the rich to cover it I saw this article this morning and thought it was pretty interesting.

https://www.wsj.com/articles/u-s-income-taxes-top-1-percent-irs-tax-foundation-joe-biden-fair-share-3394355b?mod=WTRN_pos4&cx_testId=3&cx_testVariant=cx_169&cx_artPos=3

​

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That's right, the top 1% paid almost half of the total taxes paid! Pretty amazing. Shockingly, unlike the anecdotal things you hear, or the 1 in 1,000 exceptions, across the board as people make more money, they pay a higher % of their income in taxes. The top 1% paid the highest percentage of their income in taxes.

We do live in a democracy though and it's always easy to just say to tax the people who make more than us to pay for things.

Oh well, I'm pretty discouraged on the whole thing. Partisan politics do not appear to be very good at actually solving problems that need to be fixed. That takes compromise and a willingness to work together to accomplish something.

I agree that everything has to be on the table. Everyone's ox needs to be gored, some.

Yes, the top one percent pay a large share of the income tax paid. They do not pay significantly more in SS taxes. They also make a large percentage of all of the total income earned. Presently they earn just under 20% of all income.

 

[npaden]

I agree that everything has to be on the table. Everyone's ox needs to be gored, some.

Yes, the top one percent pay a large share of the income tax paid. They do not pay significantly more in SS taxes. They also make a large percentage of all of the total income earned. Presently they earn just under 20% of all income.

5 Reasons Why Supply-Side Economics Does Not Work

Tax cuts, deregulation, and fiscal austerity aren’t necessarily a recipe for economic growth. Here’s why some economists disagree.

www.investopedia.com

Earning just under 20% of all income but paying 45.8% of the tax seems like a pretty good deal for the people making 80% of the income but only paying 54.2% of the tax.

Could they pay more? Probably. Are they an unlimited piggy bank. Nope. Where's the line?

 

[Forkyfinder]

Back to fixing social security ...

My suggestion is phase it out along something like this:
1. Current retirees get the full benefits the USG promised in the first place.
2. Workers age 55-67 (current retirement age at full benefits) get 100% of the promised benefits. THey have been putting into the system their entire working careers.
3. Workers age 45-55 get 80% of the original promised benefits - they haven't contributed as long and have had access to alternate 401K programs for their entire working career, allow them access "catch-up" limits (pre-tax) currently reserved to 50-yr old and up and increase those limits so that they can contribute more
4. Workers age 35-45 get 30-50% of the original promised benefits but up the amount they can contribute pre-tax to 401K's so they can build their retirement accounts
5. Workers under 35 get 0% - yep their screwed from a S-S perspective but they haven't contributed significantly to the ponzi scheme so they aren't losing a great deal anyway. In return they should be allowed to contribute a higher percentage to their 401K (or similar plan thatis pre-tax/tax deferred) and employers should be allowed/encouraged/pushed to match to a higher percentage.

Lol rich boomers ripping younger generations off. Checks out.

 

[Alpine01]

Social security and pensions.

Right. Keep flailing away at that dead horse and it will magically recover.

Pensions are a thing of the past and were unsustainable. But sure, let's keep doing stupid things that don't work.

 

[KG92]

First, is a revocable trust god given? How about a SPAC? Did god provide a huge tax advantage to "carry" in the PE world? Is it Leviticus or Acts that says the wages of laborers should be taxed at twice the rate of capital? Is it inalienable that a lawyer can't operate under an LLC but can under an LLP or PA is fine? Where in the fundamental laws of nature does fiat currency fit? How about banking bailouts? Nothing about our current financial system is a god given right - they are complex policy driven democratically governed laws - and I am just suggesting the policies behind the laws need some tweaking so that hard working middle class folks can have a better go of things and preventing the formation of a permanent financial ruling class (effectively a modern inherited aristocracy - something the founding father's would not have liked much).

As for fruits being confiscated. Unless you are in the top 0.1% there is no confiscation going on since <$13 million is exempt. But Bezos unborn grandchildren appreciate your profound concern for their burdens.

Lmao. The government is the very thing that taxes and takes in the first place, otherwise things like revocable trusts wouldn’t even need to exist. You understand that, right? You’re acting like without government, there would be no way for anyone to keep more of their own money! The horror!

You’re putting mice in a dark box, taking the cover off for 5 minutes a day, and then proclaiming yourself the sole reason why they could ever see the sunlight.

I’d rather Bezos’ great grandkids have his fortune, than have the government confiscate it and piddle it away on meaningless nonsense.

Why is it such an entrenched facet of the liberal ideology to think that you know how other people’s money should be spent better than they do?

 

[brymoore]

Right. Keep flailing away at that dead horse and it will magically recover.

Pensions are a thing of the past and were unsustainable. But sure, let's keep doing stupid things that don't work.

I have a pension with my current employer along with 401k match and stock bonus.

 

[406dn]

I have a pension with my current employer along with 401k match and stock bonus.

Me too, although Im retired.

 

[JohnCushman]

I think a lot of you guys that think you know so much and have great ideas should run for public office instead of running your mouth on a hunting forum. I almost died for my SSD and paid into it since I was 16. I don't look at it as entitlement or a hand out. I'm using it for what it was meant to be. And yeah, I got screwed for 15 years because the military doesn't pay into SS.

 

[VikingsGuy]

You’re acting like without government, there would be no way for anyone to keep more of their own money! The horror!

The theory that the world works without government is a pipe dream that has never happened at scale in modern history.

It reminds me of communists who keep touting a form of govt that has never worked, but in their minds an idealized fantasy would work great. Same thing arguing with libertarians. And we are stuck arguing the real world problems of real governments against theoretical premises that would never work.

 

[Nick87]

I have a pension with my current employer along with 401k match and stock bonus.

Pension and a fidelity account for us as well. Literally 99% of every guy I am buddies with or am related to with the exception to farmers has a pension.

 

[Deleted member 28227]

I've never read so damn many wannabe intellectual alphas traumatically kryptonized by bootstraps...

I wear slip ons…

 

[Derek44]

I wear slip ons…

Romeo’s for the win!!

 

[Dave N]

I have a pension with my current employer along with 401k match and stock bonus.

Caterpillar did away with the pension for us about 7 or 8 years ago. I was cut off at 22 years in so my pension ended up less than a week's pay per month. They divided the fund balance by the number of people short of 30 years and put it in our 401Ks. Our daughter has no pension at Rivian. I think anyone who still has a pension better enjoy it while it lasts. More places getting rid of them to save money and pushing 401Ks.

 

[Alpine01]

I have a pension with my current employer along with 401k match and stock bonus.

I do too. Doesn't mean I am still accruing to that pension. That model started disappearing in the 80's and 90's as the costs became too high, being able to predict how long of a liability companies would have to carry associated with pensions became too risky, and the Govt started levying increasingly complexity and oversight into managing them. As a result they turned to defined contribution plans that had known caps and were far more hands off. USG estimates only 15% of private industry workers have access to a pension. The number of pension plans has remained essentially flat since the early 2000's. So hardly a widely accepted approach to worker retirement planning. Public sector (state & local) is completely different and a quarter of those don't contribute to social security. But they may still S-S benefits later on. Maybe that little issue should be rectified.

 

[SAJ-99]

Earning just under 20% of all income but paying 45.8% of the tax seems like a pretty good deal for the people making 80% of the income but only paying 54.2% of the tax.

Could they pay more? Probably. Are they an unlimited piggy bank. Nope. Where's the line?

It’s hard to tax the poor because they are poor. The top 1% also earned 75% of all capital gains. Start taxing CG like income and you will see some changes.

 

[Marshian]

It’s hard to tax the poor because they are poor. The top 1% also earned 75% of all capital gains. Start taxing CG like income and you will see some changes.

Taxing capital gains like income means less investors, and a slowing of economic growth and ingenuity. If you show up to work, you can pretty much guarantee getting some pay. If you invest, there’s no such guarantee. If I’m risking losing money and then there’s too big of a bite if I do make gains, what’s my incentive. Might as well stick it in safe bonds and whatnot so I’m not risking the double whammy. I guess the devil is in the sweet spot of where to tax the CG. Taking them at the upper income bracket seems harsh, and I for one would not invest as much if it were so.

 

[KG92]

The theory that the world works without government is a pipe dream that has never happened at scale in modern history.

It reminds me of communists who keep touting a form of govt that has never worked, but in their minds an idealized fantasy would work great. Same thing arguing with libertarians. And we are stuck arguing the real world problems of real governments against theoretical premises that would never work.

Nobody is saying that government shouldn’t exist. That’s not the argument. The argument is about the government’s role in your everyday life.

And MY argument is that giving the federal government more money via wealth confiscation when rich people die, and expecting that to solve literally any problem any of us will ever face, is a pipe dream.

Across the board, the federal government has a spending problem. Not a revenue problem. Not a single financial issue this country faces is due to the fact that we haven’t eaten the rich yet.

 

[BuzzH]

Taxing capital gains like income means less investors, and a slowing of economic growth and ingenuity. If you show up to work, you can pretty much guarantee getting some pay. If you invest, there’s no such guarantee. If I’m risking losing money and then there’s too big of a bite if I do make gains, what’s my incentive. Might as well stick it in safe bonds and whatnot so I’m not risking the double whammy. I guess the devil is in the sweet spot of where to tax the CG. Taking them at the upper income bracket seems harsh, and I for one would not invest as much if it were so.

I don't buy it.

The same is said of corporate tax. That if you let companies pay less tax they invest it back into the business, employees, and that whole lie known as trickle down economics.

It's all crap, they just increase pay for ceo's, share holders, and upper management. They don't reinvest, they take bigger profits.

 

[BuzzH]

Nobody is saying that government shouldn’t exist. That’s not the argument. The argument is about the government’s role in your everyday life.

And MY argument is that giving the federal government more money via wealth confiscation when rich people die, and expecting that to solve literally any problem any of us will ever face, is a pipe dream.

Across the board, the federal government has a spending problem. Not a revenue problem. Not a single financial issue this country faces is due to the fact that we haven’t eaten the rich yet.

Without the .gov your everyday life would suck. You'd be drinking water out of crick with your neighbor upstream washing his ass in it.