The Most Unpopular Tax Policy Ever

[SHOCKvalue]

I personally don't like to say too much in the political arena, because I'm not well enough read to be anywhere as knowledgeable as most of you about it, so I prefer to just sit back and consume some of the information you guys put forth. I do have a question regarding social security though. I understand and agree that something needs to be corrected, but my question is why should people that have paid into social security their whole lives end up not getting back their portion when they retire? I would disagree with that conclusion if that is indeed where we are heading. Otherwise, it becomes just another tax for the government to waste on whatever they want rather than putting it back into the pockets it's been taken out of for 40+ years for some. Maybe I just misunderstand what it was originally intended for, but imo, if you've paid into it, you should get your share back. If you haven't paid in, you also get your share back. Your share just happens to be zero.

When you come to terms with the fact that even-handedness and mathematical ability are not skill sets of the Federal Government, then the answer to your question gains clarity.

[Play Angry]

Folks who retired pre-2010 IIRC crushed it in terms of taking out more than they put in to social security based on average life expectancy. People retiring now who contributed substantially more than the average worker over their careers are generally expected to receive less benefits than they contributed (all on an inflation-adjusted basis). In the worst case scenarios, I believe the difference of contributions v. expected distributions is somewhere in the 25-33% range.

No need to break out the tiny violins, however, since those same people are presently receiving 300%+ of their inflation-adjusted contributions in Medicare benefits.

[Jamar Howard 4 President]

I believe Social Security should be returned back to merely “Social Security”. Make it a safety net for poor retirees. Stop paying out $20k a year to retirees who are already drawing $75k a year off their nest egg.

As someone who fully plans to be in the category that would miss out on “my share” of social security after having paid into the system for decades, I’d be more than happy to give it up in exchange for allowing me to keep more of my paycheck every 2 weeks starting today. With significantly fewer recipients of SS checks, SS taxes could be lowered significantly.

SS is a perfect example of a good general concept mistakenly taken too far by those who believe more is always better. Truth is, sometimes, more is worse.

[ShockTalk]

I believe Social Security should be returned back to merely “Social Security”. Make it a safety net for poor retirees. Stop paying out $20k a year to retirees who are already drawing $75k a year off their nest egg.

As someone who fully plans to be in the category that would miss out on “my share” of social security after having paid into the system for decades, I’d be more than happy to give it up in exchange for allowing me to keep more of my paycheck every 2 weeks starting today. With significantly fewer recipients of SS checks, SS taxes could be lowered significantly.

SS is a perfect example of a good general concept mistakenly taken too far by those who believe more is always better. Truth is, sometimes, more is worse.

This. Social Security was designed to be a WELFARE PROGRAM, not a retirement program. Unfortunately, certain politicians discovered they could get elected over and over again by promoting SS as something it wasn't.

Now, the real problem exists. Once you have given some people (maybe most people) something, repeatedly, that they did not earn, it becomes extremely difficult to ever take it back or reduce. Why?? Because there is always a jackass running for office that uses it as "buying votes" and the more "entitled" people you have, the more votes you get.

[WuDrWu]

I personally don't like to say too much in the political arena, because I'm not well enough read to be anywhere as knowledgeable as most of you about it, so I prefer to just sit back and consume some of the information you guys put forth. I do have a question regarding social security though. I understand and agree that something needs to be corrected, but my question is why should people that have paid into social security their whole lives end up not getting back their portion when they retire? I would disagree with that conclusion if that is indeed where we are heading. Otherwise, it becomes just another tax for the government to waste on whatever they want rather than putting it back into the pockets it's been taken out of for 40+ years for some. Maybe I just misunderstand what it was originally intended for, but imo, if you've paid into it, you should get your share back. If you haven't paid in, you also get your share back. Your share just happens to be zero.

Of course your premise is correct but if that was the only intent we'd already have it in the form of an IRA or some other retirement account.

Here's today's problem in a microcosm.

The economic downturn in 2008 and early 2009 is thought to be the major reason for the jump in disability payments to people who were formerly working.


Think about that for a minute.

We have so many helping hands out there.

Also, we've been sold a bill of goods in regards to higher education. A LARGE number of people have no idea what to do with a college education. Yet they are now saddled with a debt they can't hope to pay off.

And the Federal Government's hands are filthy in that mess. And you should know that the student loan mess that IS coming is going to be worse than the mortgage crisis.

Why? Because at least you have an asset with a home, even if it sucks. There is NOTHING tangible with your "education" which is about 40% likely to be borderline fraudulent.

Here a net, there a net, everywhere a net net.

But we can just make Charles Koch pay for it......the bastard.

[CBB_Fan]

I'm probably in a very small minority on this forum and in the nation overall in that I have no problems with spending. What I have a problem with is spending inefficiently. Every time you add to the tax code, you lower efficiency. More middle-men, more administrators. Every time you create a new special exception for 26 year old half-black half-Asian veterans you create more inefficiency. Every tax credit. Every department.

We could literally save trillions through simplifying our tax code and entitlement plans. We'll never get there by cutting away randomly though, we'd need to start from scratch. If you try to cut spending one program at a time you will never be successful; in fact you will just balloon the deficit like most Republicans by doing the easy thing first (cutting taxes; free money!) and failing to do the hard thing. I think anyone, from any political persuasion can agree that a simpler, more efficient government is better than the status quo. You should be able to summarize our tax code and entitlement plans in a paragraph. Example:

Federal Tax Code: Flat income tax (same tax applied to capital gains). Additional VAT or sales tax. No other federal taxes.
Federal Entitlements: Basic income, replacing all current entitlements. Additional single-payer healthcare + infrastructure/research programs and defense spending.
Other programs funded and taxed at the state level (IE colleges).

[WuDrWu]

I believe Social Security should be returned back to merely “Social Security”. Make it a safety net for poor retirees. Stop paying out $20k a year to retirees who are already drawing $75k a year off their nest egg.

As someone who fully plans to be in the category that would miss out on “my share” of social security after having paid into the system for decades, I’d be more than happy to give it up in exchange for allowing me to keep more of my paycheck every 2 weeks starting today. With significantly fewer recipients of SS checks, SS taxes could be lowered significantly.

SS is a perfect example of a good general concept mistakenly taken too far by those who believe more is always better. Truth is, sometimes, more is worse.

A one quote moratorium because your quote was in @ShockTalk: post.


I too have advocated for the "take me out of SS now" plan and I'll go it alone from here on out. Remember, it's not 6.75 but 13.50% with employer contribution.

And you're right, it IS a perfect example of how more is not always better. And look, I'm all for paying into a fund that takes care of spouses and children of those that pay the ultimate price in defense of our country. In fact, we should more, a lot more, than we do. But this is something completely different.

[ShockdaWorld]

I too have advocated for the "take me out of SS now" plan and I'll go it alone from here on out. Remember, it's not 6.75 but 13.50% with employer contribution.

I agree 100% with this. Take me out and let me go it alone. Until then, quit pissing on my shoe and trying to convince me that it's raining.

[SHOCKvalue]

I too have advocated for the "take me out of SS now" plan and I'll go it alone from here on out. Remember, it's not 6.75 but 13.50% with employer contribution.

The self-employed pay the full 13.5%. And that is 13.5% from the first dollar earned.

I'm sure you know both of the above, but it makes me feel better to say it.

[RoyalShock]

I too have advocated for the "take me out of SS now" plan and I'll go it alone from here on out. Remember, it's not 6.75 but 13.50% with employer contribution.

Not for everyone. Some employers don't do any matching. Mine only matches 25% up to 6%.

And trust me on this. If you ever go through a divorce and you make twice what your former spouse made, your 401(k) is likely to get substantially raided. And at 45, that's not a lot of time to make up for that kind of loss, especially when it came after recovering from the 2008 debacle.

I hate to admit that I will need to depend somewhat on Social Security, but I will.

[SHOCKvalue]

Not for everyone. Some employers don't do any matching. Mine only matches 25% up to 6%.

The "employer contribution" he's referring to is the SS tax rate, nothing to do with 401K's, just FYI.

[Play Angry]

Pretty sure he is referencing mandatory employer contributions toward FICA taxes and not a 401k match.

edit: @SHOCKvalue: beat me to it.

[WuDrWu]

My mistake, but to be clear (because I know I hate it when people fudge numbers to argue their point) I should have said:

Social Security is 6.20 and Medicare is 1.45 for a 7.65 total or 15.30 self employed total.

Now, again to be fair the 6.20 (or 12.40%) is capped at 118,500 per year for now.

I believe, and someone please correct me if I'm wrong, but the Medicare tax has no ceiling, and in fact at above 200k increases to 2.35 for the employee but remains 1.45 for the employer.

Of course all this is before the other taxes, fed, state, local etc etc kick in.

In my fixes above, I'd like to add the elimination of ALL unions for governments only. That's ridiculous. It's like the 2 David Puttys commercial. "Let's talk about a raise...how about 10%...how about 20? How about done!"

And no double dipping retirement. You want to contribute to an IRA or 401k fine...but not ANOTHER state sponsored retirement plan that makes promises it can't possibly fulfill. Hello KPERS.

[RoyalShock]

The "employer contribution" he's referring to is the SS tax rate, nothing to do with 401K's, just FYI.

Well, crap. Got me.

[wufan]

A lot of people were born and raised here.

If you want to keep the town functioning well and jobs filled, you need to have a way workers can, and want to live here. I really don't hear complaints much. Just people having to leave because they can't make it.

The way to do that is by paying them what they are worth in the free-market. If they aren't making enough (and it sounds like they are not) then they will leave. Pay them more and they will reappear. The cost of living increases in the desirable beach front area and folks that work service jobs are able to live in the lower cost of living area and commute to work. They enjoy the same commute to all of the beaches as well.

If I'm an employer in the region, I provide dorm style housing and paid expenses to my service workers as well as a job. They come and work and earn money which they can take home to their more affordable region of the country as savings. While at work, on their off hours, they enjoy the beach and the ocean.

Disney does something like this and people love it!