Tax Package Will Aid Nearly All, Especially Highest Earners

[goof2]

Originally Posted by Captain Morgan

I love all of the talk about SS going bankrupt if we don't fix the system, then the gov't chooses to lower the amount of money going into SS, even if it is only for 1 year. Fucking ridiculous. That's like me bitching that my bank account is decreasing in value, then choosing to slow down the amount of money going into my account. What the fuck is wrong with this government? Doesn't anyone think?

I see what you are saying but I think we disagree about the ultimate outcome. You think the system will be salvaged and lowering SS withholding makes that more difficult. I think the SS system is doomed to failure so less money going in to a system that will not be there when I'm supposed to collect is actually a good thing.

SS is called the third rail of politics for a reason. The lies and distortions that were perpetuated (and are still being perpetuated) about Bush's attempt to institute some reform and privatization of SS make the discussion of Obama's health care reform look tame in comparison. There was zero support for what Bush wanted to do because changing SS pisses off old people, even when those changes don't affect them, and old people vote a lot.

There is pretty much zero upside for a politician to reform SS and a ton of downside to it. There are really only five options available for reform; 1) cut the amount of benefit payments, 2) extend the age where people can start to collect, 3) increase the SS withholding amount, 4) make those with money at retirement ineligible for collecting SS, or 5) increase the return on SS investments so the system makes more.

None of those options are particularly popular except number 5, and that is really only when the Dow is doing well. When the market tanked around 2 years ago I heard a lot of "If Bush's plan had gone through a lot of seniors would be broke and eating cat food now!" nonsense. Even if Bush's plan had passed it wouldn't have affected anyone for another year and private investment would have only been allowed with a tiny portion of SS withholding (1% I believe), but none of that matters. It doesn't matter though, and anyone who had voted for that plan would have been crucified in this last election.

Politicians will run SS in to the ground because that is the best way for them to stay politicians.

[Captain Morgan]

Originally Posted by goof2

I see what you are saying but I think we disagree about the ultimate outcome. You think the system will be salvaged and lowering SS withholding makes that more difficult. I think the SS system is doomed to failure so less money going in to a system that will not be there when I'm supposed to collect is actually a good thing.

Actually, I think we agree that the system will be broke by the time we get there. I also agree that less money coming out of my check for a system that is doomed to fail will be better for me. I'm going to take that extra little bit of my check and pay down debt, which is a good thing for me.

However, my point was that our government is so stupid that they don't even recognize the flaw in what they've done. I don't see how they can complain that SS needs to be fixed or it will go broke, then decide to decrease the amount of money they're putting into the system. The way this country is being run, I have to wonder how much longer it will last.

[goof2]

Originally Posted by Captain Morgan

Actually, I think we agree that the system will be broke by the time we get there. I also agree that less money coming out of my check for a system that is doomed to fail will be better for me. I'm going to take that extra little bit of my check and pay down debt, which is a good thing for me.

However, my point was that our government is so stupid that they don't even recognize the flaw in what they've done. I don't see how they can complain that SS needs to be fixed or it will go broke, then decide to decrease the amount of money they're putting into the system. The way this country is being run, I have to wonder how much longer it will last.

The problem as I see it is most in government do recognize the flaw, but they don't care as long as the voters either don't recognize or care about that flaw. Retirees who recognize it still don't care as long as their checks keep coming. Gen X and Y people who recognize it still don't care because those of us paying enough attention to notice this think the SS system will collapse long before we are able to collect anyway. About the only people this kind of thing matters to is boomers and there aren't nearly enough of them who recognize it and vote to make the politicians care.

Paraphrasing a statement mis-attributed to de Tocqueville, "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

Welcome to entitlement programs in America, and from what I have seen the majority of the public is more than happy to be bribed.

[Homeslice]

Originally Posted by goof2

There is pretty much zero upside for a politician to reform SS and a ton of downside to it. There are really only five options available for reform; 1) cut the amount of benefit payments, 2) extend the age where people can start to collect, 3) increase the SS withholding amount, 4) make those with money at retirement ineligible for collecting SS, or 5) increase the return on SS investments so the system makes more..

#2 is the worst option IMO, because 60+ year olds aren't taken very seriously in the workplace unless they are a top manager. In lower positions they get ignored and looked down on because their peers are 30 years younger. And that's if they can find a job. More often than not they're forced to work retail, or sit around selling yardsale items on Ebay.

The privatization option was the only real option. I don't need the gov't managing my retirement. Especially not with their dismal return rates.

People need to wake up and stop thinking they'll be able to live on Social Security. I mean, what is the maximum benefit, like $2000 a month?

[Homeslice]

Social Security advocates worried by payroll tax cut
By Stephen Ohlemacher
ASSOCIATED PRESS

Published: 8:19 p.m. Sunday, Dec. 12, 2010

President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers, but it makes Social Security advocates nervous that it could jeopardize the retirement program's finances.

The plan is part of a package of tax cuts and extended unemployment benefits that Obama negotiated with Senate Republican leaders. It would cut workers' share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.

The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.

Social Security taxes "ought to be held sacrosanct," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security.

"When you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble, I think, in terms of making absolutely certain that the entitlement funding streams are secure," Pomeroy said.

Social Security is funded by a 6.2 percent payroll tax on the first $106,800 earned by a worker. The tax is matched by employers. The package negotiated by Obama would reduce the tax paid by workers to 4.2 percent for 2011. Employer rates would stay unchanged.

Obama administration officials say that a payroll tax cut is an efficient way to stimulate the economy by immediately increasing take home pay for about 155 million workers. The nonpartisan Congressional Budget Office agrees, and many business groups and Republicans support it.

"What came out of the compromise was the idea of the payroll tax holiday, which frankly a huge number of economists and other experts had been talking about over the last two years with a lot of support in both political parties," said Larry Summers, Obama's chief economic adviser.

The United Auto Workers endorsed the deal, saying, "Working families will likely spend this money in their local communities, creating jobs and stimulating overall growth."

The payroll tax cut is part of a larger package negotiated by Obama and GOP lawmakers to extend an array of Bush era tax cuts.

[goof2]

Originally Posted by Homeslice

Social Security advocates worried by payroll tax cut
By Stephen Ohlemacher
ASSOCIATED PRESS

Published: 8:19 p.m. Sunday, Dec. 12, 2010

President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers, but it makes Social Security advocates nervous that it could jeopardize the retirement program's finances.

The plan is part of a package of tax cuts and extended unemployment benefits that Obama negotiated with Senate Republican leaders. It would cut workers' share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.

The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.

Social Security taxes "ought to be held sacrosanct," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security.

"When you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble, I think, in terms of making absolutely certain that the entitlement funding streams are secure," Pomeroy said.

Social Security is funded by a 6.2 percent payroll tax on the first $106,800 earned by a worker. The tax is matched by employers. The package negotiated by Obama would reduce the tax paid by workers to 4.2 percent for 2011. Employer rates would stay unchanged.

Obama administration officials say that a payroll tax cut is an efficient way to stimulate the economy by immediately increasing take home pay for about 155 million workers. The nonpartisan Congressional Budget Office agrees, and many business groups and Republicans support it.

"What came out of the compromise was the idea of the payroll tax holiday, which frankly a huge number of economists and other experts had been talking about over the last two years with a lot of support in both political parties," said Larry Summers, Obama's chief economic adviser.

The United Auto Workers endorsed the deal, saying, "Working families will likely spend this money in their local communities, creating jobs and stimulating overall growth."

The payroll tax cut is part of a larger package negotiated by Obama and GOP lawmakers to extend an array of Bush era tax cuts.

If these advocates want to worry about Social Security maybe they should be more concerned that the so called "trust fund" where workers were forced to put their payments was raided long ago and the money was replaced with what are effectively I.O.U.s from the government.

[Papa_Complex]

Originally Posted by Dave

I'm depressingly aware of this, trust me. Even more reason I shouldn't have to pay into the shit. Hell I can really depress myself if I think about what all the money they've (let's be honest) stolen from each check could have done in a good IRA. Prolly have close to a million put away by now

If you want it to be there when you need it have more kids, or push for more immigration.