Social Security reform

looks of
everything it does seem that both programmes may be
in trouble - but some common-sense reform might just
fix the problem.
Originally Posted by Salty Again

A change to the original collection formula would be a good place to start.

... Hmmmm... Agreed... Maybe you and some of the other mates
got some good ideas on how to address things.

#### Salty

They need to make a number of changes. They need to change the taxable rate to something higher than 6.2 percent. They need to raise or remove the maximum income tax cap. They need to raise the minimum age by two years.

That’s where I would start. Extending SS is very possible, we just need to meet somewhere in the middle.

The taxable rate has increased and the cap has been raised many times over the years. I have argued for both a minimum and a maximum wage limit. A window in effect. That would be an easier system to game unfortunately. Thanks for the heads up Tiny. I have read Contrarians posts for years. I don't think I materially disagreed with anything he has written.

The taxable rate has increased and the cap has been raised many times over the years. I have argued for both a minimum and a maximum wage limit. A window in effect. That would be an easier system to game unfortunately. Thanks for the heads up Tiny. I have read Contrarians posts for years. I don't think I materially disagreed with anything he has written. Originally Posted by westwardho

We can start means testing but I don’t think that anyone wants to see that. Our options include, increasing revenues, lowering benefits, means testing and raising the benefits age. Or some combination of all of these.

A good article from the center for budget and policy priorities.

Key Principles for Strengthening Social Security
https://www.cbpp.org/research/social...ocial-security

One of the major problems with Social Security can easily be seen by a visit to any large metropolitan area Social Security Office.

There will be as many as 300 people in the sitting area, waiting for their number to be called. Out of those 300, there might be 20 people who are actually of retirement age.

Odds are also that the majority of those in there never paid much of anything in.

A good article from the center for budget and policy priorities.

Key Principles for Strengthening Social Security
https://www.cbpp.org/research/social...ocial-security Originally Posted by txdot-guy

This is a fluff piece for Democratic Senator Sheldon Whitehouse's proposed social security bill. I hate that sanctimonious, lying son of a bitch more than you hate Trump.

Social security should function like a defined contribution pension plan IMHO. But that's never going to happen, because there's no appetite to transition away from the current system. So the alternative as you say is shoring up what we've got. The best way IMHO is to increase employer and employee contributions for everyone.

Whitehouse caters here to the Democratic Party's fantasy that we can build a social welfare state if the rich just pay their fair share. And Biden has promised not to increase taxes on anyone making over $400,000 a year. So he's proposing to increase taxes on any taxpayer making over $400,000 a year by 13.6 percentage points and allocate that to social security.

Now, in politician-speak, that probably really means taxes go up for any individual making over $200,000, and married couples making over $400,000.

I'm reading this will raise about $250 billion a year. That would indeed put a sizeable dent in the gap between social security's promised benefits and income -- Kathleen Romig in her CBPP fluff piece says the gap is 1.3% of GDP, or about $370 billion a year.

After the TCJA tax cuts sunset, the maximum marginal federal rate will be 43.4%. Add 13.6% onto that, and you're at a 57% federal rate. Add to the 13.3% marginal state income tax rate in California, and some taxpayers will be paying at 70% rates under the Whitehouse Plan.

Furthermore, Whitehouse's bill will apply to capital gains. Maximum rates on long term capital gains will go from the current range of 23.8% to 37.1%, depending on the particular state, to 37.4%, in states like Texas with no state income tax, and up to 50.7% in California.

The Congressional Budget Office in evaluating legislation has historically assumed the revenue maximizing capital gains rate is about 28%. So government revenues from capital gains taxes levied on taxpayers making more than $400,000 will actually go down with Whitehouse's bill. When capital gains taxes are too high, people aren't as inclined to sell appreciated property, so government revenues from the tax are less.

And that's going to happen to a lesser extent with other types of income as well. Taxpayers making over $400,000 a year will realize less income than they would otherwise, and thus probably make Whitehouse's estimates of revenue look optimistic.

So, in summary, using assumptions that may be optimistic, $250 billion would be raised from this tax, which would go a decent way towards closing a $370 billion income gap for social security.

But what about all the other spending? Our annual deficits are running $1.7 trillion a year. Based on headline numbers, the politicians came up with $5 trillion in new spending in 2021 and 2022 from legislation like the American Rescue Plan, Inflation Reduction Act, CHIPS bill, Infrastructure Bill, etc. And we're going to see more of that in the future.

The Democrats need to give up on their fantasy that upper income taxpayers can pay for everybody's retirement, medical care, education, etc., because they can't. They don't have enough money. If they're going to create a social welfare state in America, they have to raise taxes, and social security contributions, on everybody, or alternately take the country down the same path as some South American and African banana republics.

One of the major problems with Social Security can easily be seen by a visit to any large metropolitan area Social Security Office.

There will be as many as 300 people in the sitting area, waiting for their number to be called. Out of those 300, there might be 20 people who are actually of retirement age.

Odds are also that the majority of those in there never paid much of anything in. Originally Posted by Jackie S

That sounds like a cross section of the non-students camped out on college campuses right now protesting Israel. At lunch today we were speculating whether they're gainfully employed. There may be more receiving social security checks than paychecks.

The younger ones in the SS office queue might be there for disability claim purposes and may have well paid into the system. If you've ever been challenged with a mentally fucked up relative (due to drugs, brain trauma, bad genes, or a combo), you'd have a better understanding. Disability benefits are a whole nother issue probably outside the topic of this thread.

This is a fluff piece for Democratic Senator Sheldon Whitehouse's proposed social security bill. I hate that sanctimonious, lying son of a bitch more than you hate Trump.

Social security should function like a defined contribution pension plan IMHO. But that's never going to happen, because there's no appetite to transition away from the current system. So the alternative as you say is shoring up what we've got. The best way IMHO is to increase employer and employee contributions for everyone. Originally Posted by Tiny

No please tell us how you really feel.

You are right, taxes are going to have to go up for everyone. It’s an absurdity that we give tax breaks to the poorest as well as the richest amongst us. But to get back to the point. Raising the SS tax rate from 6.2 percent to 7.2 percent for employees and employers would make the program solvent for the next 75 years. I also think we could raise revenues by raising the max tax cap for employee income. I’m not sure how it’s calculated but they really need to double it.

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.1 At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits. Thus, the Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future. The Social Security Board of Trustees project that changes equivalent to an immediate reduction in benefits of about 13 percent, or an immediate increase in the combined payroll tax rate from 12.4 percent to 14.4 percent, or some combination of these changes, would be sufficient to allow full payment of the scheduled benefits for the next 75 years.

No please tell us how you really feel.

You are right, taxes are going to have to go up for everyone. It’s an absurdity that we give tax breaks to the poorest as well as the richest amongst us. But to get back to the point. Raising the SS tax rate from 6.2 percent to 7.2 percent for employees and employers would make the program solvent for the next 75 years. I also think we could raise revenues by raising the max tax cap for employee income. I’m not sure how it’s calculated but they really need to double it.

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.1 At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits. Thus, the Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future. The Social Security Board of Trustees project that changes equivalent to an immediate reduction in benefits of about 13 percent, or an immediate increase in the combined payroll tax rate from 12.4 percent to 14.4 percent, or some combination of these changes, would be sufficient to allow full payment of the scheduled benefits for the next 75 years. Originally Posted by txdot-guy

I like you Txdot, I really do. And you're right, I need to stop sugar coating things. Sheldon Whitehouse is a piece of shit, cum sucking, mother fucking, ass licking, self-righteous, lying worthless bastard.

Your post is sensible. I can't find anything substantive to disagree with in it. As you know, what you're proposing is along the lines of what Tip O'Neill and Ronald Reagan did to save social security back in the 1980's.

No please tell us how you really feel.

You are right, taxes are going to have to go up for everyone. It’s an absurdity that we give tax breaks to the poorest as well as the richest amongst us. But to get back to the point. Raising the SS tax rate from 6.2 percent to 7.2 percent for employees and employers would make the program solvent for the next 75 years. I also think we could raise revenues by raising the max tax cap for employee income. I’m not sure how it’s calculated but they really need to double it.

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.1 At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits. Thus, the Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future. The Social Security Board of Trustees project that changes equivalent to an immediate reduction in benefits of about 13 percent, or an immediate increase in the combined payroll tax rate from 12.4 percent to 14.4 percent, or some combination of these changes, would be sufficient to allow full payment of the scheduled benefits for the next 75 years. Originally Posted by txdot-guy

2037?
Odds are I will be dead.

Well, Social Security certainly hopes so, as that will mean less benefits to be paid out the sooner you are gone.


The whole system is based on actuarial science. Although I have never met an actuary, I am guessing they are quiet and methodical people.

I like you Txdot, I really do. And you're right, I need to stop sugar coating things. Sheldon Whitehouse is a piece of shit, cum sucking, mother fucking, ass licking, self-righteous, lying worthless bastard.

Your post is sensible. I can't find anything substantive to disagree with in it. As you know, what you're proposing is along the lines of what Tip O'Neill and Ronald Reagan did to save social security back in the 1980's. Originally Posted by Tiny

What has become clear is that changes to support the solvency of the Social Security system should have been implemented Twenty years ago. The longer the system has to incorporate the changes the more gradual they are. As it sits now more people will feel the effects of these reforms in a more impactful way than they needed to.

And that’s if we don’t kick the can down the road until 2032 when the trust fund is depleted and we are running on payroll tax revenues only. If that happens everyone will feel the effects on their payroll taxes like a kick to the testicles.

What has become clear is that changes to support the solvency of the Social Security system should have been implemented Twenty years ago. The longer the system has to incorporate the changes the more gradual they are. As it sits now more people will feel the effects of these reforms in a more impactful way than they needed to.

And that’s if we don’t kick the can down the road until 2032 when the trust fund is depleted and we are running on payroll tax revenues only. If that happens everyone will feel the effects on their payroll taxes like a kick to the testicles. Originally Posted by txdot-guy

How about raising the cap, say to say $1 million, and start collecting SS on unearned income.