Pay taxes so others can have cable, cigarettes, smart phones, vacations -

[Bob W]

I work in the social services end of the world.

Most all my clients have cable, big screen TVs,   smart phones,  either take vacations or fun outings, and many of them smoke cigarettes.

The rub is that they also have food stamps,  Medicaid,  subsidized housing etc..

So while tax payers may not be directly paying for the their goodies we do subsidize their total budget which allows them the money to buy luxury stuff.  They also don't need to save for retirement.  In fact in our state it is forbidden due to means testing.  So basically we assume they will be receiving benefits the rest of their lives and never need to worry about saving.   

I also realize that many Mustacians either are or plan on gaming the system for big bucks through the ACA and hope to pay little if any taxes through smart money management through their lifetime  (See rootofgood.com how to pay $150 taxes on 150K earnings)

Discuss ---- 

[norabird]

People's choices are their choices. It does not mean they do not deserve to have benefits. There has been a lot of work on why poor people still gravitate towards impulse buys, and there is a lot of behavioral science at play.

More to the point, most of our tax money goes elsewhere--defense, infrastructure, education, health spending...

To point out the very small welfare-like spending is to give it outsize importance in the US budget.

I suggest you find a different line of work if none of this is obvious to you.

[BarkyardBQ]

The same tools that allow those people to live a standard of life subsidized by the population are the same tools that allow us to defer 60% of our pretax income, reducing our taxes to 3k annually.

Ignorance makes you part of the better good system:
- There is a monetary tax for not handling your finances efficiently.
- There is a lifestyle tax for not being privileged enough to control your circumstances.

[RFAAOATB]

I work in the social services end of the world.

Most all my clients have cable, big screen TVs,   smart phones,  either take vacations or fun outings, and many of them smoke cigarettes.

The rub is that they also have food stamps,  Medicaid,  subsidized housing etc..

So while tax payers may not be directly paying for the their goodies we do subsidize their total budget which allows them the money to buy luxury stuff.  They also don't need to save for retirement.  In fact in our state it is forbidden due to means testing.  So basically we assume they will be receiving benefits the rest of their lives and never need to worry about saving.   

I also realize that many Mustacians either are or plan on gaming the system for big bucks through the ACA and hope to pay little if any taxes through smart money management through their lifetime  (See rootofgood.com how to pay $150 taxes on 150K earnings)

Discuss ----

I would have no problem giving the poors these gifts as a bribe to stay out of trouble as long as they agreed to be put on birth control so they don't go making more poors and making things worse. 

[Christof]

I haven't found many people who actually want to live in the past... Life has gotten better despite us being more human beings on this planet...

[AlwaysLearningToSave]

It's an unsolvable quandary in my opinion.  I believe there should be some sort of government-provided basic social safety net.  I wager most Americans would agree with that statement even if they disagree on the details of the program (amount of benefits, when you qualify for benefits, etc...). 

But here is the trade-off:  the better the social safety net is at providing for those who truly need it, the easier it is for others to take advantage of it.  The harder it is to take advantage of the social safety net, the more likely it is that it won't catch people who truly need it and are deserving of it.  And the more strings you attach and qualifications you impose, the more difficult and more expensive it is to administer the program.

The system will always have waste.  The struggle is trying to legislate a program that meets enough of the real need, is reasonably administratively efficient, and doesn't result in too much waste or provide no incentive for people to get out of the social safety net when possible.  There is no "right" answer, just attempts achieve the "best" balance, whatever that is. 

[nereo]

::shrug::  When I think about it (which I try not to) I get more upset knowing that people who extremely well off are still given social security.  Why do we do this?  The common argument is that they "paid into the system" are "deserve to get their money back"  - but the affluent are most likely to live long enough to get more back from SS than they paid in. 

I hate seeing anyone smoke - rich or poor, on food stamps or actively donating to charity.  But their choices are their choices.

[Pigeon]

I couldn't care less.  Most of the people who I have encountered who live in poverty don't do or have the things you claim, but in any event, I wouldn't trade my life for theirs.  I'm much more concerned about paying taxes for corporate welfare and wars.

[seattlecyclone]

Bob, I'm curious what changes you would make to the system. People respond to incentives. Make programs where eligibility is solely determined by income, and you get people like us who say "sure, I don't need to spend more than 2x the poverty level each year anyway; I'll quit my job and accept highly subsidized health care, thanks." Add wealth-based means testing and people make the quite rational decision that a few thousand dollars of money in the bank isn't better than a few hundred a month in food stamps, so they spend their money as soon as it comes in on things like cable TV and vacations. You could try lowering the benefit amounts based on the premise that people who can afford cable TV don't need help buying food, but then you'll hurt the people who are currently receiving benefits and can't find a way to pay for cable TV. Maybe the people with cable TV are just really good at managing their money compared to the average benefits recipient!

I think at some point we'll probably need to transition to a universal basic income system, as more and more jobs are done by robots. That day is not quite here yet though.

[Bob W]

Well there is always the guaranteed minimum income idea?

[okits]

Bob W, do you often see the system work as hoped?  Helps people get back on their feet, pulls some children out of the cycle of poverty, etc.?  As AlwaysLearningToSave points out, there is no perfect system without waste.  The question is, is the current level of waste and abuse acceptable for the good accomplished?

[Cressida]

I couldn't care less.  Most of the people who I have encountered who live in poverty don't do or have the things you claim, but in any event, I wouldn't trade my life for theirs.  I'm much more concerned about paying taxes for corporate welfare and wars.

EXACTLY. Honestly, Bob, give it a rest.

[Bardo]

Well maybe you should just tell them that they are living too high on the hog, and that they must live in more obvious poverty and rely strictly on landlines from now on. 

Seriously, OP, surely you understand that fretting about the amount of physical possessions that others have, and whether in your eyes they "deserve" them or not, only serves to destroy your own happiness.  If things like this are outside of one's circle of control the best strategy is to consciously focus on letting go of judgment.  Look, all of my neighbors have nicer cars than I do, but I can't let that become an excuse for me becoming cranky and embittered toward them.  Just wish them the best and move on.

[iris lily]

Bob, I was today just ruminating on the fact that 3 people from another chat board consider themselves too poor to pay for health insurance, yet they are jetting off to Europe. If this is poor, then I want to be that.

 I haven't been to Europe for 6 years and I am overdue to go.

[iris lily]

Well there is always the guaranteed minimum income idea?

Sure that's a fine idea, I'm all for it. I just have to ask: what happens when good old dad takes the paycheck to the boats and it's gone by the 3rd of the month?

Are you willing to turn your back on hungry children? A minimum income system means  (to me anyway) that it replaces a labyrinth of social services, including food stamps. The government would save lots of money by removing bureaucrats who, for instance, administer food stamps. But it all means that the poors have to administer their income wisely. Chances are they can't do that which is why food has to be doled out in a special way as in the food stamp program.

[Jakejake]

This whole post reminds me of having to dress down in shitty clothing when I used WIC coupons, rather than wear the nice clothing I owned - bought for next to nothing from the thrift shop - because people will say the most judgmental rude and hateful things to a person in line using those coupons if we don't properly fit their notion of what poor people are supposed to look like. Never mind that they don't have a clue about the circumstances in which we acquired nice looking clothes.

And buying cigarettes for my nondriving neighbor who smoked (but I never have!) in return for her free babysitting while I had army reserve duty?! OMG, people in line's attitude when they saw me using those WIC coupons while buying cigarettes!!!

Anytime someone gets on their high horse about having to bear the burden of the poor (by paying taxes, not by actually being poor), I have to wonder how they feel about military service falling disproportionately on poor and minority citizens. I'm guessing that burden doesn't leave them with the same sense of outrage. I wish it did. I wish someone having to put themselves in a combat zone for a war they might not even believe in, and being injured, killed, or living out their days with PTSD because they felt they had no other options, left the rest of us more outraged than the fact that I bought a pack of cigarettes for my neighbor while buying food for my daughter.

[MissStache]

Don't care at all.  The amount of my money that goes to supposedly subsidizing luxuries for the poor is so tiny in comparison to the amount of money that goes into filling the coffers of corporations, the pockets of politicians, and funding the neverending war machine that it doesn't even register a brow-furrow.  So there are a few people gaming the system?  Meh.

[Scandium]

I'm libertarian-ish, but my response these reports (or claims) of people living large on welfare is a solid "meh, whatever". Even if true, if some of my taxes goes to poor drug abusers and that keep them out of extreme poverty, hunger and desperation, and thus crime, then that's worth it. Call it a cost of a cleaner society. Anyone who think US welfare is too generous haven't been to Europe..

And it's such a drop in the bucket. The amount of taxpayer money spent on other nonsense such as the giant welfare program that pay thousands of young men to pointlessly stand around; the military, is way greater anyway.

[CletusMcGee]

If you are going to gripe about govt spending, start with the defense budget, social security, and medicare.  Anything else is just akin to complaining about your ship sinking because the crew have been pissing in the bilge while ignoring the massive breach in the hull.

Although if it furthers your sense of moral superiority, by all means continue to focus on "the poors".

[rhv70]

::shrug::  When I think about it (which I try not to) I get more upset knowing that people who extremely well off are still given social security.  Why do we do this?  The common argument is that they "paid into the system" are "deserve to get their money back"  - but the affluent are most likely to live long enough to get more back from SS than they paid in. 

I hate seeing anyone smoke - rich or poor, on food stamps or actively donating to charity.  But their choices are their choices.

You consider it being "given" to them when it was taken from them in the first place?  SS has always been a system designed to force wage-earners to save for retirement (and to a lesser extent the possibility of disability or early death).

[nereo]

::shrug::  When I think about it (which I try not to) I get more upset knowing that people who extremely well off are still given social security.  Why do we do this?  The common argument is that they "paid into the system" are "deserve to get their money back"  - but the affluent are most likely to live long enough to get more back from SS than they paid in. 

I hate seeing anyone smoke - rich or poor, on food stamps or actively donating to charity.  But their choices are their choices.

You consider it being "given" to them when it was taken from them in the first place?  SS has always been a system designed to force wage-earners to save for retirement (and to a lesser extent the possibility of disability or early death).

Yes.  High wage earners have the majority of their income exempt form SS taxes, and statistically they are the group most likely to live the longest, allowing them to recieve the largest share of benefits.  SS is a tax, plain and simple, and paying any particular tax doesn't guarantee you should benefit directly from it.  We call it a "withholding" and put it into a special "trust fund", but money is fungible and that collective money is supposed to be a safety net in the first place.For  example, I pay a school tax but don't have any children. I've paid taxes for building bridges I rarely/never use.  Getting back to Bob W's question about welfare - I pay into that too but I don't collect food stamps.  The list goes on.
It's part of living in an organized society. 
My point is simply that we (attempt) to give out food stamps and welfare on a more need-based system, yet SS works the exact opposite way. I'd much rather have a sliding system that said "ok, once your net assets are above this threshold, you are going to get progressively less from SS".  That would make much more sense to me than paying SS checks to individuals who are among the top quintile.  But it's unlikely to happen, with SS being the 'third-rail' of politics and all.

[JustGettingStarted1980]

Don't care at all.  The amount of my money that goes to supposedly subsidizing luxuries for the poor is so tiny in comparison to the amount of money that goes into filling the coffers of corporations, the pockets of politicians, and funding the neverending war machine that it doesn't even register a brow-furrow.  So there are a few people gaming the system?  Meh.

Ditto.

Oh, and I think a "Minimum Allowance" for everyone would be a great idea. The Devil is in the Details.

[rhv70]

::shrug::  When I think about it (which I try not to) I get more upset knowing that people who extremely well off are still given social security.  Why do we do this?  The common argument is that they "paid into the system" are "deserve to get their money back"  - but the affluent are most likely to live long enough to get more back from SS than they paid in. 

I hate seeing anyone smoke - rich or poor, on food stamps or actively donating to charity.  But their choices are their choices.

You consider it being "given" to them when it was taken from them in the first place?  SS has always been a system designed to force wage-earners to save for retirement (and to a lesser extent the possibility of disability or early death).

Yes.  High wage earners have the majority of their income exempt form SS taxes, and statistically they are the group most likely to live the longest, allowing them to recieve the largest share of benefits.  SS is a tax, plain and simple, and paying any particular tax doesn't guarantee you should benefit directly from it.  We call it a "withholding" and put it into a special "trust fund", but money is fungible and that collective money is supposed to be a safety net in the first place.For  example, I pay a school tax but don't have any children. I've paid taxes for building bridges I rarely/never use.  Getting back to Bob W's question about welfare - I pay into that too but I don't collect food stamps.  The list goes on.
It's part of living in an organized society. 
My point is simply that we (attempt) to give out food stamps and welfare on a more need-based system, yet SS works the exact opposite way. I'd much rather have a sliding system that said "ok, once your net assets are above this threshold, you are going to get progressively less from SS".  That would make much more sense to me than paying SS checks to individuals who are among the top quintile.  But it's unlikely to happen, with SS being the 'third-rail' of politics and all.

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

[nereo]

::shrug::  When I think about it (which I try not to) I get more upset knowing that people who extremely well off are still given social security.  Why do we do this?  The common argument is that they "paid into the system" are "deserve to get their money back"  - but the affluent are most likely to live long enough to get more back from SS than they paid in. 

I hate seeing anyone smoke - rich or poor, on food stamps or actively donating to charity.  But their choices are their choices.

You consider it being "given" to them when it was taken from them in the first place?  SS has always been a system designed to force wage-earners to save for retirement (and to a lesser extent the possibility of disability or early death).

Yes.  High wage earners have the majority of their income exempt form SS taxes, and statistically they are the group most likely to live the longest, allowing them to recieve the largest share of benefits.  SS is a tax, plain and simple, and paying any particular tax doesn't guarantee you should benefit directly from it.  We call it a "withholding" and put it into a special "trust fund", but money is fungible and that collective money is supposed to be a safety net in the first place.For  example, I pay a school tax but don't have any children. I've paid taxes for building bridges I rarely/never use.  Getting back to Bob W's question about welfare - I pay into that too but I don't collect food stamps.  The list goes on.
It's part of living in an organized society. 
My point is simply that we (attempt) to give out food stamps and welfare on a more need-based system, yet SS works the exact opposite way. I'd much rather have a sliding system that said "ok, once your net assets are above this threshold, you are going to get progressively less from SS".  That would make much more sense to me than paying SS checks to individuals who are among the top quintile.  But it's unlikely to happen, with SS being the 'third-rail' of politics and all.

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

Well I'm glad we are at least understanding each other.  I'd say that SS has already morphed from what it was envisioned and intended to be - a social security program to ensure that all workers who spend decades working would have at least a baseline level of support until they died, an income stream that they would never outlive.  SS was supposed to take some uncertainty out of income in old age. It's frequently called a "backstop," "safety net" and "one leg of a three-legged stool." To be fair, it still does exactly this for millions every year.  My issue is that the people who need it the least tend to get the most and have the greatest chance of getting more than they put in.  To me that isn't social insurance or social security anymore.  That's just how I see things - I realize that's a wildly unpopular idea for others.

[BDWW]

As far as the original topic, I'm a fan of restrictions like this.

http://www.nytimes.com/2015/04/12/us/politics/states-tighten-conditions-for-receiving-food-stamps-as-the-economy-improves.html

Able bodied adults with no dependents have to work 20 hours a week, attend classes, or alternatively volunteer 6 hours a week.

Of course the article points out the downfall, as some simply drop out, and take advantage of food pantries instead.

I agree that there are certainly more pressing concerns on government spending than welfare and food stamp programs; but I don't buy that as a reason to ignore it either. We should be working to optimize every aspect we can.

[LadyStache in Baja]

As a previous poster mentioned, it's about helping everyone have a certain "standard of living".  It's not about bare subsistence.  So, yeah, if they want to watch tv and smoke, that's their prerogative.  Not everyone needs the same things to be happy.  I don't need coffee, but I want it and I drink it and I spend money each week on it.  These people have the same right.

On a side note, I just found out that my niece here in Mexico gets money from the government every month for being a mom.  When they're little, you get only $25 dollars/month, but once they're school age you get about $80/month.  Plus $80 for the mom. 

So that means I could get about $320 dollars/month just because.  According to her, I don't have to prove low-income to be eligible. 

I'm thinking about doing it.  We are not rich, but we're definitely not poor by Mexico standards.  We're super-poor by US standards, though.  All that money could go into savings to build our next rental, which sounds awesome.   

[Scandium]

As a previous poster mentioned, it's about helping everyone have a certain "standard of living".  It's not about bare subsistence.  So, yeah, if they want to watch tv and smoke, that's their prerogative.  Not everyone needs the same things to be happy.  I don't need coffee, but I want it and I drink it and I spend money each week on it.  These people have the same right.

On a side note, I just found out that my niece here in Mexico gets money from the government every month for being a mom.  When they're little, you get only $25 dollars/month, but once they're school age you get about $80/month.  Plus $80 for the mom. 

So that means I could get about $320 dollars/month just because.  According to her, I don't have to prove low-income to be eligible. 

I'm thinking about doing it.  We are not rich, but we're definitely not poor by Mexico standards.  We're super-poor by US standards, though.  All that money could go into savings to build our next rental, which sounds awesome.   

The "old country" in scandinavia has something similar. They pay parent's just because, no means testing or anything. People making a million get the same as the unemployed. I checked and currently it's ~$120/month per child. Until they're 18 I think. If you ask me it's stupid and unfair to those without children. Frankly I'd be offended that the state take money from others and give it to me just because I have a child, which was my own damn choice. I can take care of myself thank you very much, and take some pride in not needing this kind of welfare.

I believe that if you take away people's need to be responsible and care for themselves then they will start to live up to these expectations..

[LadyStache in Baja]

Yes Scandium I agree that it does help people to live up to those poor expectations!  Here they give it to any woman (I think) and then give extra per kid.  But yes I agree it could be unfair to non-parents. 

In my own particular case, if I decide to do it, it wouldnt be out of need, but simply a way to get free money and reach my goals faster (while still being super-frugal). 

If someone wants to give me money, I'll take it, I'm not proud in that way.  ;)  And if they think there will be strings attached, I just ignore them.

[norabird]

The thing is, giving money to poor families with small children is proven to help those kids later. It's an investment in the country's future to make sure kids grow up healthy, able to attend school, and then go on to become productive members of society.

http://www.theatlantic.com/business/archive/2015/09/income-inequality-poverty-children/407512/

[smilla]

Well there is always the guaranteed minimum income idea?

Sure that's a fine idea, I'm all for it. I just have to ask: what happens when good old dad takes the paycheck to the boats and it's gone by the 3rd of the month?

Are you willing to turn your back on hungry children? A minimum income system means  (to me anyway) that it replaces a labyrinth of social services, including food stamps. The government would save lots of money by removing bureaucrats who, for instance, administer food stamps. But it all means that the poors have to administer their income wisely. Chances are they can't do that which is why food has to be doled out in a special way as in the food stamp program.

The more I consider a guaranteed minimum income the more I like the idea. It could replace so many things. Welfare, SS, CPP, GIS and OAS in Canada, maybe even some/most kinds of employment insurance like parental leave. Students could take out fewer loans. So much bureaucracy could be cut, so much time and money saved on administration.

It would probably have to be paid onto some kind of government bank card every 2 weeks or so to minimize some of the possible abuses but if there was a will, they could find a way to make this work.

[Pigeon]

The thing is, giving money to poor families with small children is proven to help those kids later. It's an investment in the country's future to make sure kids grow up healthy, able to attend school, and then go on to become productive members of society.

http://www.theatlantic.com/business/archive/2015/09/income-inequality-poverty-children/407512/

It is also done to incentivize having children by countries that have low birth rates.  We essentially do something similar with the tax code giving deductions for dependents.

[beltim]

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

Well I'm glad we are at least understanding each other.  I'd say that SS has already morphed from what it was envisioned and intended to be - a social security program to ensure that all workers who spend decades working would have at least a baseline level of support until they died, an income stream that they would never outlive.  SS was supposed to take some uncertainty out of income in old age. It's frequently called a "backstop," "safety net" and "one leg of a three-legged stool." To be fair, it still does exactly this for millions every year. 

Who does it not do this for?  What percentage of people are you talking about?

My issue is that the people who need it the least tend to get the most and have the greatest chance of getting more than they put in.  To me that isn't social insurance or social security anymore.  That's just how I see things - I realize that's a wildly unpopular idea for others.

In absolute dollars that's correct - that's because those participants also put in the most dollars.  In terms of who has the greatest return on their "investment" that's wrong - the poorest people have the greatest return.  The progressivity of benefits is so high, in fact, that Social Security overall is a highly progressive system even though the taxes that fund the program are regressive.

Social Security hasn't significantly changed since its inception - its purpose was always to provide a benefit to retirees based on the income they received while working (or, in some cases, what the household provider received while working).  Why do you think the system has changed from its original purpose?

[2Birds1Stone]

Two weeks ago I was getting gasoline at one of those gas stations that has a pretty nice market inside.

So a woman in front of me throws a bunch of chips, soft drinks, and other junk on the counter and pays with EBT.

Then she proceeds to pull out a wad of cash, purchase ~$100 in lotto tickets, 2 dutchmasters blunts, and visine.

I pay for my gas and follow her out to her 2010+ Nissan Maxima..........wtf.

[nereo]

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

Well I'm glad we are at least understanding each other.  I'd say that SS has already morphed from what it was envisioned and intended to be - a social security program to ensure that all workers who spend decades working would have at least a baseline level of support until they died, an income stream that they would never outlive.  SS was supposed to take some uncertainty out of income in old age. It's frequently called a "backstop," "safety net" and "one leg of a three-legged stool." To be fair, it still does exactly this for millions every year. 

Who does it not do this for?  What percentage of people are you talking about?

My issue is that the people who need it the least tend to get the most and have the greatest chance of getting more than they put in.  To me that isn't social insurance or social security anymore.  That's just how I see things - I realize that's a wildly unpopular idea for others.

In absolute dollars that's correct - that's because those participants also put in the most dollars.  In terms of who has the greatest return on their "investment" that's wrong - the poorest people have the greatest return.  The progressivity of benefits is so high, in fact, that Social Security overall is a highly progressive system even though the taxes that fund the program are regressive.

Social Security hasn't significantly changed since its inception - its purpose was always to provide a benefit to retirees based on the income they received while working (or, in some cases, what the household provider received while working).  Why do you think the system has changed from its original purpose?

I wrote a response but it looks like the forum "ate" it.  ::shrug::  The percentage of people I was referring to were those with the highest net worth.  For the sake of discussion, let's consider the top 20%.
What I was getting at in my earlier response was that the life expectancy of the most wealthy individuals (those in the upper 20%) is about 4.1 years longer than the median, and 8 years longer than the bottom 20% (median life expectancy at age 65 is currently 19.1 years).  So - it isn't even terms of absolute dollars - the wealthy are the most likely to receive more money from SS than they 'put in'. 
This is an unexpected (or at least unplanned) artifact of demographics.  The program certainly intended for the middle and working classes to benefit the most from this program.  To tie this back into the OP's original question, I have a harder time begrudging poor people buying cigarettes than I do seeing someone with over $1.2MM in investments (the approximate position of someone age 67 in the upper 20%) receiving the same benefits as someone with a $200k net worth, assuming both worked for most of their lives.  Both food stamps and SS are paid for by taxes on income.

[rhv70]

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

Well I'm glad we are at least understanding each other.  I'd say that SS has already morphed from what it was envisioned and intended to be - a social security program to ensure that all workers who spend decades working would have at least a baseline level of support until they died, an income stream that they would never outlive.  SS was supposed to take some uncertainty out of income in old age. It's frequently called a "backstop," "safety net" and "one leg of a three-legged stool." To be fair, it still does exactly this for millions every year. 

Who does it not do this for?  What percentage of people are you talking about?

My issue is that the people who need it the least tend to get the most and have the greatest chance of getting more than they put in.  To me that isn't social insurance or social security anymore.  That's just how I see things - I realize that's a wildly unpopular idea for others.

In absolute dollars that's correct - that's because those participants also put in the most dollars.  In terms of who has the greatest return on their "investment" that's wrong - the poorest people have the greatest return.  The progressivity of benefits is so high, in fact, that Social Security overall is a highly progressive system even though the taxes that fund the program are regressive.

Social Security hasn't significantly changed since its inception - its purpose was always to provide a benefit to retirees based on the income they received while working (or, in some cases, what the household provider received while working).  Why do you think the system has changed from its original purpose?

I wrote a response but it looks like the forum "ate" it.  ::shrug::  The percentage of people I was referring to were those with the highest net worth.  For the sake of discussion, let's consider the top 20%.
What I was getting at in my earlier response was that the life expectancy of the most wealthy individuals (those in the upper 20%) is about 4.1 years longer than the median, and 8 years longer than the bottom 20% (median life expectancy at age 65 is currently 19.1 years).  So - it isn't even terms of absolute dollars - the wealthy are the most likely to receive more money from SS than they 'put in'. 
This is an unexpected (or at least unplanned) artifact of demographics.  The program certainly intended for the middle and working classes to benefit the most from this program.  To tie this back into the OP's original question, I have a harder time begrudging poor people buying cigarettes than I do seeing someone with over $1.2MM in investments (the approximate position of someone age 67 in the upper 20%) receiving the same benefits as someone with a $200k net worth, assuming both worked for most of their lives.  Both food stamps and SS are paid for by taxes on income.

There is a practical cap on how much you can draw from social security due to the cap on how much gets taken out of paychecks.  In other words, the amount of SS that a surgeon earning $400K draws at age 67 will be pretty much the same that an engineer making $115K will draw.  If you draw a curve of SS withdrawals vs income level, it's going to go up and plateau at a very middle class income.

[Jakejake]

Two weeks ago I was getting gasoline at one of those gas stations that has a pretty nice market inside.

So a woman in front of me throws a bunch of chips, soft drinks, and other junk on the counter and pays with EBT.

Then she proceeds to pull out a wad of cash, purchase ~$100 in lotto tickets, 2 dutchmasters blunts, and visine.

I pay for my gas and follow her out to her 2010+ Nissan Maxima..........wtf.

This is a perfect example of the sort of judgments I was up against when I was on WIC coupons. You can't tell from this if she's buying the lotto tickets or blunts for herself or her office or a boyfriend, etc. You don't know if the car belongs to her, a parent, a boyfriend, etc. You don't even know if the chips and soft drinks were her normal diet, a one time splurge for a party, or anything else about her circumstances.

I've driven a newish VW Golf to the store when I was on WIC, and I'm sure people followed me out and then proceeded to gossip about me being a welfare queen with a fancy foreign car. They didn't know it was my neighbor's car, and that I had been asked to drive it once a week or so to keep it running smooth, while my neighbor was out of the country for a while. And like I mentioned above, I bought smokes for a neighbor in return for free child care. It's really easy to make assumptions and repeat them as facts without having a clue about circumstances.

When you live in poverty, you get a much better sense of how resources are pooled together at times, and how we run errands for each other, borrow transportation when needed, and so on.

We invest too much time, effort and emotion in reinforcing negative stereotypes about poor people. But the damage and tax dollars spent on by people on SNAP by buying a pop and some chips is negligible compared to - for example - an oil spill. And oddly, many of the people upset about welfare usage seem to be the most opposed to government regulations to control that larger sort of damage and expense.

[brooklynguy]

Bob, your post only narrowly avoided endorsing the ugly stereotypes drawn by some of the overtly classist responses it attracted.  If you view your clients' station in life as being enviable, then why don't you go join their ranks?  Free yourself of those white collar shackles and get in on some of that sweet government-subsidy action. 

[LadyStache in Baja]

+1 jakejake!

[rhv70]

No, I get what you're saying and I don't even want to argue other than I dislike when something morphs over time from it's original purpose.  If you want SS to behave like taxes going into the general fun to be used to support the lower income families, I would argue a new program to do that should be used.  SS was not intended for that purpose.  When you sell something to the public as one thing, it should be that one thing for its lifetime.  If it needs to change, remove it and replace it with the new thing.

Well I'm glad we are at least understanding each other.  I'd say that SS has already morphed from what it was envisioned and intended to be - a social security program to ensure that all workers who spend decades working would have at least a baseline level of support until they died, an income stream that they would never outlive.  SS was supposed to take some uncertainty out of income in old age. It's frequently called a "backstop," "safety net" and "one leg of a three-legged stool." To be fair, it still does exactly this for millions every year. 

Who does it not do this for?  What percentage of people are you talking about?

My issue is that the people who need it the least tend to get the most and have the greatest chance of getting more than they put in.  To me that isn't social insurance or social security anymore.  That's just how I see things - I realize that's a wildly unpopular idea for others.

In absolute dollars that's correct - that's because those participants also put in the most dollars.  In terms of who has the greatest return on their "investment" that's wrong - the poorest people have the greatest return.  The progressivity of benefits is so high, in fact, that Social Security overall is a highly progressive system even though the taxes that fund the program are regressive.

Social Security hasn't significantly changed since its inception - its purpose was always to provide a benefit to retirees based on the income they received while working (or, in some cases, what the household provider received while working).  Why do you think the system has changed from its original purpose?

You are right. I should have said it has morphed in the *perception* of what it is for, evidenced by nereos reaction to people drawing social security that he doesn't feel should.

[beltim]

I wrote a response but it looks like the forum "ate" it.  ::shrug::  The percentage of people I was referring to were those with the highest net worth.  For the sake of discussion, let's consider the top 20%.
What I was getting at in my earlier response was that the life expectancy of the most wealthy individuals (those in the upper 20%) is about 4.1 years longer than the median, and 8 years longer than the bottom 20% (median life expectancy at age 65 is currently 19.1 years).  So - it isn't even terms of absolute dollars - the wealthy are the most likely to receive more money from SS than they 'put in'. 
This is an unexpected (or at least unplanned) artifact of demographics.  The program certainly intended for the middle and working classes to benefit the most from this program.  To tie this back into the OP's original question, I have a harder time begrudging poor people buying cigarettes than I do seeing someone with over $1.2MM in investments (the approximate position of someone age 67 in the upper 20%) receiving the same benefits as someone with a $200k net worth, assuming both worked for most of their lives.  Both food stamps and SS are paid for by taxes on income.

Alright, so a couple with a $1.2 million net worth can expect to get about $48,000 per year from their investments.  That's roughly comparable to their Social Security benefits if they each had an average salary of $45k or so.  So you think that is sufficient to completely eliminate their Social Security benefit?

I don't think it's fair to apply a 50% reduction in retirement benefits for people who have that income level.

[calimom]

Government benefit recipient here: *hangs head in shame*

Actually it's my kids who receive monies monthly from the Social Security Survivors Benefits program.  They were eligible when my 37 year old husband was killed by a drunk driver.  The federal government entrusts me to those funds and I'm required to fill out a Representative Payee Report annually, which I assiduously do, listing their portion of housing costs, groceries, entertainment, school supplies and clothing.  No idea whether some bureaucrat type in Virginia actually looks at this, but I do it anyhow.  With 3 kids receiving benefits initially, we received the Family Maximum, so I never applied for myself as caregiver, which I could have done, especially when my eldest aged out of the system at 18.  I've become self employed and am a  pretty scrappy bootstrapper type of gal and have no problem with hard work and supporting myself.

At some point, it's quite likely we have likely exceeded my late husband's contributions to SSA.  As it stands, we'll be eligible for benefits for close to 10 more years; my youngest was just an infant when her father died.  So, we have veered over to the category of accepting the good grace of our fellow citizens of the US.  Thank you, and thank you FDR for the New Deal.

In addition, if the above was not enough to make heads spin, my monthly health care insurance costs have been greatly reduced by the ACA.  Thank you, Obama!  I went from paying close to $1000 per month, to a much more manageable $448 for a family of four.  And we hardly use medical services:  a broken arm for my then 7 year old son, some well-baby checks, yearly Pap smears for mom and we're good to go.  But nice to have and it's appreciated.  I'm able to keep DSD on this now that she is graduated from college (from which she earned a four year scholarship from) and is launching into her new life.

My sister's husband, who has always been overly curious about my financial status, has always made rude comments about both my perceived (in his mind) life insurance riches, and what he surmises to be my reliance on the federal government.  When I pulled into their driveway last year with the new-to-me 8 year old Volvo wagon, he immediately made a comment about how "good Uncle Sam has been".  Fucker.

And if we as a society really want to be outraged by welfare, how about these guys:


http://www.fool.com/investing/general/2014/03/01/10-companies-receiving-the-biggest-handouts-from-t.aspx

And by the way, what about Walmart?  They pay their workers such ridiculously low wages that most employees there qualify for Medicare, SNAP, etc.

[MissStache]

Government benefit recipient here: *hangs head in shame*

Actually it's my kids who receive monies monthly from the Social Security Survivors Benefits program.  They were eligible when my 37 year old husband was killed by a drunk driver.  The federal government entrusts me to those funds and I'm required to fill out a Representative Payee Report annually, which I assiduously do, listing their portion of housing costs, groceries, entertainment, school supplies and clothing.  No idea whether some bureaucrat type in Virginia actually looks at this, but I do it anyhow.  With 3 kids receiving benefits initially, we received the Family Maximum, so I never applied for myself as caregiver, which I could have done, especially when my eldest aged out of the system at 18.  I've become self employed and am a  pretty scrappy bootstrapper type of gal and have no problem with hard work and supporting myself.

At some point, it's quite likely we have likely exceeded my late husband's contributions to SSA.  As it stands, we'll be eligible for benefits for close to 10 more years; my youngest was just an infant when her father died.  So, we have veered over to the category of accepting the good grace of our fellow citizens of the US.  Thank you, and thank you FDR for the New Deal.

In addition, if the above was not enough to make heads spin, my monthly health care insurance costs have been greatly reduced by the ACA.  Thank you, Obama!  I went from paying close to $1000 per month, to a much more manageable $448 for a family of four.  And we hardly use medical services:  a broken arm for my then 7 year old son, some well-baby checks, yearly Pap smears for mom and we're good to go.  But nice to have and it's appreciated.  I'm able to keep DSD on this now that she is graduated from college (from which she earned a four year scholarship from) and is launching into her new life.

My sister's husband, who has always been overly curious about my financial status, has always made rude comments about both my perceived (in his mind) life insurance riches, and what he surmises to be my reliance on the federal government.  When I pulled into their driveway last year with the new-to-me 8 year old Volvo wagon, he immediately made a comment about how "good Uncle Sam has been".  Fucker.

And if we as a society really want to be outraged by welfare, how about these guys:


http://www.fool.com/investing/general/2014/03/01/10-companies-receiving-the-biggest-handouts-from-t.aspx

And by the way, what about Walmart?  They pay their workers such ridiculously low wages that most employees there qualify for Medicare, SNAP, etc.

Calimom, may I just say that I am THRILLED to know that my tax dollars have gone to support you and your family in what must have been an impossible time.  You are exactly the reason why I will happily pay into government support programs and will vote for people who will keep and expand these programs.  Best wishes to you and your family!

[AlwaysLearningToSave]

Government benefit recipient here: *hangs head in shame*

Head up, Calimom, and don't you dare let it hang again. 

This is exactly the reason we have these programs.  Pay no attention to your dickhead brother-in-law and people like him.  Most people understand that life gave you a hard row to hoe and that you would trade all the life insurance and SS survivor benefits to have your husband and father of your children back if you could.  Your story gives me comfort that if I kick the bucket early, my wife and daughter would have some extra support to ease the burden in my absence.

[beltim]

Government benefit recipient here: *hangs head in shame*

…

I agree with AlwaysLearning here: keep that head up.

I'd go further and say that the Social Security benefits you received are not welfare in any way, shape, or form.  They are, essentially, a government-administered insurance program.  The funding is entirely self-contained, and paid for by people's contributions to Social Security.  No one's income tax dollars are supporting this program.

No one would have a problem if you received these benefits because you bought insurance from a private company - it is, quite frankly, stupid to have a problem with you receiving these benefits because the insurance program just happens to be run by the government.

[Bearded Man]

I couldn't care less.  Most of the people who I have encountered who live in poverty don't do or have the things you claim, but in any event, I wouldn't trade my life for theirs.  I'm much more concerned about paying taxes for corporate welfare and wars.

And I've had the opposite experience. In fact, there is a 300K, 4 bed 2 bath house acrossed the street from one of my rentals occupied by section 8 renters. Cops, Code Enforcement, have been called by the neighbors and I many times, loud parties on the front lawn with alcohol, etc. When I lived there I had surveillance cameras at my front door and I could see them during the day, having BBQ's in the middle of the day, drinking, while I was at work paying 40-50K a year in taxes. Each of the girls who lived there had a different boyfriend every few months, with new cars, etc. They had bought AC units for the windows and had not one but TWO big screen TV's visible from the street in two separate rooms. Every time the ice cream truck came around, they had money and lined up to get some.

I've seen first hand how the system is rigged to punish those who work hard and reward those who vote Democrat. While corporations don't punish people who work hard, instead giving them raises for hard work and capability, the tax laws, as well as social services are set up to punish those who made it and reward those who play Xbox all day.

[Jakejake]

... I was at work paying 40-50K a year in taxes.
I've seen first hand how the system is rigged to punish those who work hard and reward those who vote Democrat.

I would suggest that if your income is high enough that you are paying 40-50k in taxes annually, the system is working extremely well for you, not punishing you. You are likely taking much more out of the system (accumulating wealth) than you are putting in.

[Mr Dorothy Dollar]

This is all just propaganda to vilify the poor instead of actually effectuating changes to reduce poverty. No one likes paying taxes, however assuming that a substantial portion of your tax dollars goes to those downtrodden is buying the propaganda. Anger over taxes should be placed at larger budget programs that have a lower impact on the well-being of Americans (e.g., defense should be restructured).

If those on public assistance have it so great then why not join the ranks? Because in reality you do know that taxes is still better than their position.

My mom always told me to not compare myself to others, but to compare myself to my best. Once you do this maybe you all can find happiness without being envious.

[nereo]

Alright, so a couple with a $1.2 million net worth can expect to get about $48,000 per year from their investments.  That's roughly comparable to their Social Security benefits if they each had an average salary of $45k or so.  So you think that is sufficient to completely eliminate their Social Security benefit?

I don't think it's fair to apply a 50% reduction in retirement benefits for people who have that income level.

No, I am not suggesting that we completely eliminate their SS benefit.  It's certainly easy to see why SS is considered a "third rail" of political discussions.  As I see it, there is an unintended flaw with how SS payments are made and it's largely the result of our demographics.  In short, those that need the program the least are the ones who are most likely to receive the most over the course of their lifetime.  If we were only speaking in absolute dollars (as beltim suggestion) that would be one thing - after all high wage earners pay more into the system.  But largely due to vastly different life expectancies at age 65/67, the wealthiest stand to receive more than they put in, while the less financially successful (and those that rely on SS the most for retirement income) will tend to die sooner and collect fewer benefits.
As for the hypothetical couple with $1.2MM in assets - yes I believe they should get benefits.  But (and I realize this might be a hugely unpopular opinion here) I believe benefits should gradually be scaled down as income/assets go up. Where that point is I'm not certain, but I'd say certainly anyone with $100MM doesn't need nor should they receive SS payouts.  Perhaps we start with 'full benefits' as high as $1.2MM and for each $100k over the payout is reduced by 2-3%. Under such a scenario even an individual with $3MM in assets would get ≥50% of their benefits.  If they experience an economic catastrohpie than SS will again provide full benefits.  How best to implement it I don't know - right now this is largely a thought-exercise.  For certain we might want to exclude the person's primary residence from the equation.  The underlying goal is to balance needs and longevity.  I doubt it will ever happen though.

[choppingwood]

It's an unsolvable quandary in my opinion.  I believe there should be some sort of government-provided basic social safety net.  I wager most Americans would agree with that statement even if they disagree on the details of the program (amount of benefits, when you qualify for benefits, etc...). 

But here is the trade-off:  the better the social safety net is at providing for those who truly need it, the easier it is for others to take advantage of it.  The harder it is to take advantage of the social safety net, the more likely it is that it won't catch people who truly need it and are deserving of it.  And the more strings you attach and qualifications you impose, the more difficult and more expensive it is to administer the program.

The system will always have waste.  The struggle is trying to legislate a program that meets enough of the real need, is reasonably administratively efficient, and doesn't result in too much waste or provide no incentive for people to get out of the social safety net when possible.  There is no "right" answer, just attempts achieve the "best" balance, whatever that is.

I agree with this. Making sure people have money for rent and food and utilities is worth the trade-off risk. Giving them the dignity of making their own choices is important too.

The luxuries you are talking about are highly visible, and probably symbolic of being OK in this society -- but it is not like taxpayers are supplying a total luxury lifestyle. I used to live in a core neighbourhood, with all kinds of people with all kinds if income. I had a couple of garage sales, where some people (especially single men on income assistance, who live on a few hundred dollars a month) were thrilled to get really good deals on things like carpet sweepers and small chests of drawers. None of the kids had bikes. Halloween "costumes" wore make-up on the faces. Free days at the pool were packed with families.It was a busy food bank that could only give 2-4 days worth of food. (Where I live now can give two weeks worth of food, and the well-to-do community I lived in during my last contract could give 4 to 6 weeks worth of food. We don't have a SNAP equivalent, though all families get monthly cheques.) The local thrift shop sold $33,000 worth of second-hand clothes each year at 50 cents and $1 apiece.

Some provincial governments in Canada have combined income assistance with encouraging employment for those who are able, and have made some progress in helping people become more independent.

I am irritated by mustachians who have elaborate plans to pay no taxes. However, I live in a country that taxes more highly and in return provides very wide safety nets and health care benefits, so that is my cultural bias.
 

[beltim]

Alright, so a couple with a $1.2 million net worth can expect to get about $48,000 per year from their investments.  That's roughly comparable to their Social Security benefits if they each had an average salary of $45k or so.  So you think that is sufficient to completely eliminate their Social Security benefit?

I don't think it's fair to apply a 50% reduction in retirement benefits for people who have that income level.

No, I am not suggesting that we completely eliminate their SS benefit.  It's certainly easy to see why SS is considered a "third rail" of political discussions.  As I see it, there is an unintended flaw with how SS payments are made and it's largely the result of our demographics.  In short, those that need the program the least are the ones who are most likely to receive the most over the course of their lifetime.  If we were only speaking in absolute dollars (as beltim suggestion) that would be one thing - after all high wage earners pay more into the system.  But largely due to vastly different life expectancies at age 65/67, the wealthiest stand to receive more than they put in, while the less financially successful (and those that rely on SS the most for retirement income) will tend to die sooner and collect fewer benefits.

I think you need some data to support this - it looks incorrect to me.  Here's a study from the SSA that shows the difference in life expectancy between the top quartile and bottome quartile of male income earners is 3 years, not the 8 that you said earlier.  And this difference in life expectancy might be included in the SSA's other studies showing the huge progressivity of benefits (it might not, but the SSA is pretty good about these types of calculations).

As for the hypothetical couple with $1.2MM in assets - yes I believe they should get benefits.  But (and I realize this might be a hugely unpopular opinion here) I believe benefits should gradually be scaled down as income/assets go up. Where that point is I'm not certain, but I'd say certainly anyone with $100MM doesn't need nor should they receive SS payouts.  Perhaps we start with 'full benefits' as high as $1.2MM and for each $100k over the payout is reduced by 2-3%. Under such a scenario even an individual with $3MM in assets would get ≥50% of their benefits.  If they experience an economic catastrohpie than SS will again provide full benefits.  How best to implement it I don't know - right now this is largely a thought-exercise.  For certain we might want to exclude the person's primary residence from the equation.  The underlying goal is to balance needs and longevity.  I doubt it will ever happen though.

This is certainly a more reasonable suggestion, but I would again say that it completely changes the original purpose of (this part of) Social Security - to provide a retirement benefit to everyone based on the wages they earned in their career.  The fact is, programs have more support when they're universal, even when benefits are not evenly distributed.  This is true around the world for a variety of programs.  As soon as you take away the universality of Social Security, you basically make it a "welfare" program in some people's eyes, support for the program drops, and the future of the program becomes threatened.  No country ever takes away universal healthcare - but countries reduce non-universal social benefits all the time.