Would you forego Social Security if you could invest in own account instead?

[starguru]

I'm surprised no-one has brought Australia's superannuation system and its results.  From what I recall, the average inheritance in Australia is over 500k at this point.  If that is true, it seems at least superficially that forced savings is beneficial for society as a whole, even if there can be problems with such a system.

I don't know if I support Cruz's exact proposal, but I do support the idea of forced savings.  It could be done in such a way so as to prevent savvy financial professionals from taking advantage of the less financially literate.  Hell, couldn't they let these forced savings accounts participate in the federal TSP funds, which are excellent?  If worse came to worse, the government could bail out people's retirement accounts just as they do businesses when it gets bad enough. 

I don't think forced savings can reasonably replace SS, but I do believe it could certainly augment the existing system. 

[FIRE me]

SS is really favorable for FIREers for two basic reasons:
1) FIRE folks don't hit the 30 years of working cap, so they use the program efficiently.  If you work a 31st year, your lowest earning year gets evicted and doesn't count toward your benefit computation.  Lots of folks subsidize the system this way, but FIRE folks won't.

Highest 35 years, not 30.

"We use the highest 35 years of indexed earnings in a benefit computation."
Source:
https://www.ssa.gov/oact/progdata/retirebenefit1.html

[Bucksandreds]

Funny how every time they rank countries by overall quality of life, countries with high taxes end up on top. The majority of Americans and the vast majority of the countries where people are healthiest and happiest disagree with you. Last I saw somewhere in the seventy something percent of Americans support higher taxes for the rich.  The vast majority of Americans want a system where everyone who's willing to participate share in our prosperity. Not just those who were born in to privlege or those who figured out how to game the system.  You realize you're on the losing side, right. Better get over it. Your ideas are past their time. It will inevitably be taken too far in the direction that I support and then your ideas will be back in vogue in 20-30 years time.  You're in for some unhappy years ahead, however.

If you like those places, go live there. Honestly, it's a doomed proposition to attempt to chase after what you think is 'better' based on loose statistics. People do share in prosperity, that's been the amazing strength of Capitalism turning the US from a backwoods colony into a world power in less than 100 years. JFK said "a rising tide lifts all boats", he's right. Prosperity, economic growth, is the only historically proven method to mitigate poverty. Inequality and growth are linked. Your plan is to reduce growth in favor of a more 'fair' system but bringing down the rich cannot and does not bring up the poor.

Ever wonder why we have the exact same percentage of the populace in poverty today than we had prior to 1965 and the start of LBJ's War on Poverty? After 50 years of effort and over $22 trillion spent we have the exact same amount of people in poverty today as we did 50 years ago when a fraction of the government's budget was spent combating poverty. Combating poverty through redistribution does not work. Maybe when people stop taking the easy road and avoid the political process to vote for more 'free' stuff at the expense of their fellow citizens they'll understand that. Our founding fathers designed the Constitution to intentionally avoid that. Madison was quoted as saying "No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity." They were concerned with the federal government corrupting the political process by 'trading votes for food'.

Anyone that has looked a little at our history, and the history of the 20th century, should be concerned with people like Sanders whoring out the government for votes.

Combatting poverty through money for nothing is not an entirely effective way to reduce poverty due to poor incentives. Combatting poverty through making it more worthwhile to work through increased wages and or increased EITC is.  Again, you're going to lead a very unhappy political existence these next 10-20 years. Maybe some actual ideas from the right (with realistic details) instead of straw man arguments and feet dragging and we could all work together to take America where it's going.

[ender]

Combatting poverty through money for nothing is not an entirely effective way to reduce poverty due to poor incentives. Combatting poverty through making it more worthwhile to work through increased wages and or increased EITC is.  Again, you're going to lead a very unhappy political existence these next 10-20 years. Maybe some actual ideas from the right (with realistic details) instead of straw man arguments and feet dragging and we could all work together to take America where it's going.

EITC results in a very high "effective" marginal tax rate for people who are making relatively low incomes, given its fairly steep phase out curve, so I am not sure EITC is really the best example of incentivizing work..

[Bucksandreds]

Combatting poverty through money for nothing is not an entirely effective way to reduce poverty due to poor incentives. Combatting poverty through making it more worthwhile to work through increased wages and or increased EITC is.  Again, you're going to lead a very unhappy political existence these next 10-20 years. Maybe some actual ideas from the right (with realistic details) instead of straw man arguments and feet dragging and we could all work together to take America where it's going.

EITC results in a very high "effective" marginal tax rate for people who are making relatively low incomes, given its fairly steep phase out curve, so I am not sure EITC is really the best example of incentivizing work..

All talk of raising the EITC also talks of raising incomes that would be eligible thus lowering the negative work incentives.  I would modestly raise the minimum wage (less than $15 per hour and slowly phased in over years to limit firings) while expanding the EITC. Problem with not doing both is the federal government is subsidizing minimum wage companies by giving benefits to the low wage workers. I'd eliminate the carried interest loophole and tax capital gains as regular income or if not institute the Buffet rule. Also inheritance tax should be expanded and social security retirement age raised 1-2 years over time to reflect much longer life expectancy.  Many of my suggestions will definitely happen over the next 10 or so years. Median income is stagnating or declining while the rich are getting richer. If you are a conservative please give me a real alternative because Americans have become aware of the situation and it will either be the left's solution or a real alternative from the right and the right isn't even trying to come up with one.

[Indexer]

Would I personally like to be able to invest that money going towards SS?  Yes.
Do I think the rest of the population should be able to do this? No.

I'll accept not being able to touch it in exchange for everyone else not being able to touch it either.

[Tabaxus]

Combatting poverty through money for nothing is not an entirely effective way to reduce poverty due to poor incentives. Combatting poverty through making it more worthwhile to work through increased wages and or increased EITC is.  Again, you're going to lead a very unhappy political existence these next 10-20 years. Maybe some actual ideas from the right (with realistic details) instead of straw man arguments and feet dragging and we could all work together to take America where it's going.

EITC results in a very high "effective" marginal tax rate for people who are making relatively low incomes, given its fairly steep phase out curve, so I am not sure EITC is really the best example of incentivizing work..

All talk of raising the EITC also talks of raising incomes that would be eligible thus lowering the negative work incentives.  I would modestly raise the minimum wage (less than $15 per hour and slowly phased in over years to limit firings) while expanding the EITC. Problem with not doing both is the federal government is subsidizing minimum wage companies by giving benefits to the low wage workers. I'd eliminate the carried interest loophole and tax capital gains as regular income or if not institute the Buffet rule. Also inheritance tax should be expanded and social security retirement age raised 1-2 years over time to reflect much longer life expectancy.  Many of my suggestions will definitely happen over the next 10 or so years. Median income is stagnating or declining while the rich are getting richer. If you are a conservative please give me a real alternative because Americans have become aware of the situation and it will either be the left's solution or a real alternative from the right and the right isn't even trying to come up with one.

Agree with raising the full social security retirement age, probably by more than one or two years.  Democrats tend to do more pushback there than Republicans do, to be fair.

Agree with clipping the carried interest issue, probably with some carveout for at-risk capital which should be treated as basis recovery like any other capital transaction.

Completely disagree with taxing capital gains as regular income.  Severe disincentive to investing, all across the income spectrum.  Would support some tweaks to make capital gains rates slightly more progressive, though. 

Agree wholeheartedly with expanding inheritance taxes.  I have a problem with over-taxing people on their own work and success (and seriously take issue with your claim earlier in this thread that everyone with money either inherited it or got it through "gaming the system,") but I have little issue with taxing the dead.  Surprised you didn't mention it, but it should go without saying that we should get rid of the straight-up giveaway that is asset basis step-up on death--that's completely unjustifiable under all circumstances.

To be clear, these positions here are a pretty far cry from your suggestions earlier in the thread.

[Yaeger]

All talk of raising the EITC also talks of raising incomes that would be eligible thus lowering the negative work incentives.  I would modestly raise the minimum wage (less than $15 per hour and slowly phased in over years to limit firings) while expanding the EITC. Problem with not doing both is the federal government is subsidizing minimum wage companies by giving benefits to the low wage workers. I'd eliminate the carried interest loophole and tax capital gains as regular income or if not institute the Buffet rule. Also inheritance tax should be expanded and social security retirement age raised 1-2 years over time to reflect much longer life expectancy.  Many of my suggestions will definitely happen over the next 10 or so years. Median income is stagnating or declining while the rich are getting richer. If you are a conservative please give me a real alternative because Americans have become aware of the situation and it will either be the left's solution or a real alternative from the right and the right isn't even trying to come up with one.

First I'd like to start by saying that I'm not a conservative, but I think the fundamental stance chosen by Republicans is inherently more difficult than that chosen by Democrats. People are more willing to vote in favor of more direct benefits than against it. I think that's the job of our representatives, though, to do what's best for the country even if it might not be popular as required by the Constitution. To make the hard choices and live or die by the outcomes. I also expect our government to always favor good results over good intentions.

EITC or a negative income tax are great ideas. Any system that incentives work has a natural advantage over other programs in regards to how it impacts the greater economy and society.

Minimum wage - get rid of it. If you want to see what effects a minimum wage has on a society, look at what happened to Puerto Rico in the 1970's when they became subject to our federal minimum wage laws.

Capital gains - I'd support taxing long-term capital gains as income if we eliminated the Corporate Tax and the ACA tax on capital gains. Capital gains is already double-taxed and any attempt to raise the tax without addressing that is just a cheap, and probably harmful, attempt to milk the rich.

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS. Decline the benefit linearly to max calculated benefit around $15k. Use the savings to boost the trust fund and gradually lower taxes to support a full phase out over a 30 year period. Expand welfare to support the elderly that really need it with a plan to address the future shortfalls with something like Australia's superannuation that pushes more risk to the people or expanded IRAs. That's just an idea off the top of my head.

Taxes - Flat tax. Probably Cruz's plan is the best. Democrats never talk about tax reform because a large, complicated tax plan that you need a advanced degree for only benefits the government. You can shout out how the rich don't pay a 'fair' share because no one understands how the tax code works. Hell, Americans don't even know how much tax they themselves pay. When people talk about wage growth stagnation, do they understand that since 1970 they're paying 8.4% MORE for Social Security and Medicare, half of that being deducted from their pay before they see it? Income tax was lowered in part to account for this. Below is a nice report on the tax plans of various candidates:

http://taxfoundation.org/blog/comparison-presidential-tax-plans-and-their-economic-effects

[EnjoyIt]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

[beltim]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

[ender]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

Is your implication people should only vote for policies that personally benefit them?

[EnjoyIt]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

Actually if you add social security t capital gains it definitely will since everyone pays that.

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

Is your implication people should only vote for policies that personally benefit them?

My implication is to not vote for policies that hurt so many.  Adding a 12.4% tax (which is what SS really is) to capital gains would have a very damning affect on our ability to live off our savings or allow growth in investments.

[beltim]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

Actually if you add social security t capital gains it definitely will since everyone pays that.

That would be true, but did anyone say that?  I saw someone say they wanted to treat capital gains as income, which would not subject it to Social Security taxes.  Social Security taxes are only levied on wages, not on all income.

[Tabaxus]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

Actually if you add social security t capital gains it definitely will since everyone pays that.

That would be true, but did anyone say that?  I saw someone say they wanted to treat capital gains as income, which would not subject it to Social Security taxes.  Social Security taxes are only levied on wages, not on all income.

Earlier in the thread, Bucks suggested subjecting capital gains to the employee portion of the SS tax.

Also, if you subject cap gains to income tax rates at ordinary marginal level, things like the roth pipeline are going to become less useful, so yes, it would have an impact on SWR, though not 1:1.

[beltim]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

Actually if you add social security t capital gains it definitely will since everyone pays that.

That would be true, but did anyone say that?  I saw someone say they wanted to treat capital gains as income, which would not subject it to Social Security taxes.  Social Security taxes are only levied on wages, not on all income.

Earlier in the thread, Bucks suggested subjecting capital gains to the employee portion of the SS tax.

Also, if you subject cap gains to income tax rates at ordinary marginal level, things like the roth pipeline are going to become less useful, so yes, it would have an impact on SWR, though not 1:1.

Ah sorry, I didn't search the first page and so I missed that comment when I looked.

[Bucksandreds]

I love how members on this board want to tax capital gains more.  Don't these fools people understand it will greatly affect their SWR?

For most of them it won't, for the same reason the Roth pipeline is a useful tool for people here.

Actually if you add social security t capital gains it definitely will since everyone pays that.

That would be true, but did anyone say that?  I saw someone say they wanted to treat capital gains as income, which would not subject it to Social Security taxes.  Social Security taxes are only levied on wages, not on all income.

Earlier in the thread, Bucks suggested subjecting capital gains to the employee portion of the SS tax.

Also, if you subject cap gains to income tax rates at ordinary marginal level, things like the roth pipeline are going to become less useful, so yes, it would have an impact on SWR, though not 1:1.

My suggestion was at a maximum 6.2% but it would make sense to use a system where first $118,000 total regardless of whether it's earned income or capital gains gets taxed for FICA and then there is a break to between $250,000 to $1 million so that the added tax only effects the rich. The 12.4% by the person above was a typical conservative straw man argument. Our family income is around $200,000. I believe in a more progressive tax system because I believe that we are headed in a poor direction and I think that taxing the rich (who without argument are doing far better than ever) so that the working class (who are inarguably not doing better than ever) will make the society that my children and grandchildren inherit a better place. I am willing to pay more in FICA, receive SS benefits a couple of years later, and pay more in capital gains if that's what it takes. Only thinking of your own immediate situation without regard for anyone or anything else is a sign of sociopathy.

[Bucksandreds]

All talk of raising the EITC also talks of raising incomes that would be eligible thus lowering the negative work incentives.  I would modestly raise the minimum wage (less than $15 per hour and slowly phased in over years to limit firings) while expanding the EITC. Problem with not doing both is the federal government is subsidizing minimum wage companies by giving benefits to the low wage workers. I'd eliminate the carried interest loophole and tax capital gains as regular income or if not institute the Buffet rule. Also inheritance tax should be expanded and social security retirement age raised 1-2 years over time to reflect much longer life expectancy.  Many of my suggestions will definitely happen over the next 10 or so years. Median income is stagnating or declining while the rich are getting richer. If you are a conservative please give me a real alternative because Americans have become aware of the situation and it will either be the left's solution or a real alternative from the right and the right isn't even trying to come up with one.

First I'd like to start by saying that I'm not a conservative, but I think the fundamental stance chosen by Republicans is inherently more difficult than that chosen by Democrats. People are more willing to vote in favor of more direct benefits than against it. I think that's the job of our representatives, though, to do what's best for the country even if it might not be popular as required by the Constitution. To make the hard choices and live or die by the outcomes. I also expect our government to always favor good results over good intentions.

EITC or a negative income tax are great ideas. Any system that incentives work has a natural advantage over other programs in regards to how it impacts the greater economy and society.

Minimum wage - get rid of it. If you want to see what effects a minimum wage has on a society, look at what happened to Puerto Rico in the 1970's when they became subject to our federal minimum wage laws.

Capital gains - I'd support taxing long-term capital gains as income if we eliminated the Corporate Tax and the ACA tax on capital gains. Capital gains is already double-taxed and any attempt to raise the tax without addressing that is just a cheap, and probably harmful, attempt to milk the rich.

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS. Decline the benefit linearly to max calculated benefit around $15k. Use the savings to boost the trust fund and gradually lower taxes to support a full phase out over a 30 year period. Expand welfare to support the elderly that really need it with a plan to address the future shortfalls with something like Australia's superannuation that pushes more risk to the people or expanded IRAs. That's just an idea off the top of my head.

Taxes - Flat tax. Probably Cruz's plan is the best. Democrats never talk about tax reform because a large, complicated tax plan that you need a advanced degree for only benefits the government. You can shout out how the rich don't pay a 'fair' share because no one understands how the tax code works. Hell, Americans don't even know how much tax they themselves pay. When people talk about wage growth stagnation, do they understand that since 1970 they're paying 8.4% MORE for Social Security and Medicare, half of that being deducted from their pay before they see it? Income tax was lowered in part to account for this. Below is a nice report on the tax plans of various candidates:

http://taxfoundation.org/blog/comparison-presidential-tax-plans-and-their-economic-effects

Flat tax? I pay a higher REAL tax rate than the top 1%. Don't straw man me with marginal rates.  Your ideas stand no chance at happening because in practice they turn out to be regressive. Sales tax, gas tax, Property taxes are already regressive. Next comes income tax? The rich have the resources to push the envelope.
http://www.ctj.org/pdf/taxday2012.pdf

Also SS is not going away.  It has lifted so many elderly out of poverty. Old people get dimentia and Alzheimer's and lose the ability to manage their finances.  I as well as the VAST majority of Americans consider attempts to eliminate SS heinous.

[BTDretire]

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS.

 Means testing will kill the incentive to save. My wife and I have earned a low to middle income for all of our marriage. But we lived frugally, invested in real estate, and the stock market. We also started a small business and pay the full 12.4% SS tax. By means testing my SS, you're telling me I was stupid for being open 363 days a year, 10 hours a day for the last 15 years. I could have been non Mustachian and ate a restaurants, bought a bigger house, trucks,  boats,  jet skis,  and had vacations. Means testing by your numbers would take about $36,000  away from my wife and my retirement. I would have been better off spending it while I was young. My daughter would have liked a car when she was in college.
  At 61, I hope I'm old enough that means testing won't happen to me.
I just now, became one of those old people that votes to save my SS. (-:
 If you want to fix SS;
Raise the retirement age, since the forties, life expectancy has increase over 4 years for those living to 65.
Raise the cap on SS taxes.
Raise the FICA tax rate.
Lower the COLA .
Seems like I had a fifth change, but I'm not remembering it now.

[Bucksandreds]

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS.

 Means testing will kill the incentive to save. My wife and I have earned a low to middle income for all of our marriage. But we lived frugally, invested in real estate, and the stock market. We also started a small business and pay the full 12.4% SS tax. By means testing my SS, you're telling me I was stupid for being open 363 days a year, 10 hours a day for the last 15 years. I could have been non Mustachian and ate a restaurants, bought a bigger house, trucks,  boats,  jet skis,  and had vacations. Means testing by your numbers would take about $36,000  away from my wife and my retirement. I would have been better off spending it while I was young. My daughter would have liked a car when she was in college.
  At 61, I hope I'm old enough that means testing won't happen to me.
I just now, became one of those old people that votes to save my SS. (-:
 If you want to fix SS;
Raise the retirement age, since the forties, life expectancy has increase over 4 years for those living to 65.
Raise the cap on SS taxes.
Raise the FICA tax rate.
Lower the COLA .
Seems like I had a fifth change, but I'm not remembering it now.

Social security isn't going anywhere. Anyways potential means testing (which itself is unlikely) wouldn't phase in until pension/retirement incomes were very high (six figures plus) and would phase in like 25 cents or less for every extra dollar earned. Otherwise everyone would just cash out their 401k and buy a luxury home, boat, RV etc. His $30,000 income thing is an extreme example of the things he tries to rail against (incentive argument) when he's looking for ways to benefit the rich.  Apparently, to him people only decide things based off of incentive when they're rich.  He has some unfortunate opinions which stand no chance of occurring in today's situation.  His ideas are unfavorable to 3/4 or greater of Americans. It's the same reason that I am as likely to be the next president as Ted Cruz is. He only wins caucuses (extreme conservatives only.) He polls in the teens to single digits with moderate republicans and independents.

[Yaeger]

Flat tax? I pay a higher REAL tax rate than the top 1%. Don't straw man me with marginal rates.  Your ideas stand no chance at happening because in practice they turn out to be regressive. Sales tax, gas tax, Property taxes are already regressive. Next comes income tax? The rich have the resources to push the envelope.
http://www.ctj.org/pdf/taxday2012.pdf

Also SS is not going away.  It has lifted so many elderly out of poverty. Old people get dimentia and Alzheimer's and lose the ability to manage their finances.  I as well as the VAST majority of Americans consider attempts to eliminate SS heinous.

I thought we were talking about a system beneficial to society as a whole, not using taxation as a way to somehow bring up the poor. Your whole argument seems to suggest that our tax system is designed to support the poor and distribute benefits to those that have less. That's nonsense. You DO NOT bring up the poor by taking from the rich. The government doesn't grow the economy, doesn't innovate, doesn't create jobs, it doesn't improve quality of life for citizens, it doesn't provide for defense. The private market provides all of that. The more you take from the private market, the more the economy shrinks. Obviously the goal of a flat tax is to equalize everyone at a federal level to eliminate the selfish interest in the receipt of direct benefits. Or you could argue the fair and just Constitutional route, but you don't seem to like the Constitution.

It feels like your entire argument around Social Security, and taxes, revolve around an appeal to emotion. You cannot successfully argue for something like Social Security without going into the negative effects to society and a provide a (rough) assessment of the overall impact. Are we damaging society more than we're helping the elderly? Measuring the net effect on society is the only real measurement of success, anything else is just liberal lip-service.

[Bucksandreds]

Flat tax? I pay a higher REAL tax rate than the top 1%. Don't straw man me with marginal rates.  Your ideas stand no chance at happening because in practice they turn out to be regressive. Sales tax, gas tax, Property taxes are already regressive. Next comes income tax? The rich have the resources to push the envelope.
http://www.ctj.org/pdf/taxday2012.pdf

Also SS is not going away.  It has lifted so many elderly out of poverty. Old people get dimentia and Alzheimer's and lose the ability to manage their finances.  I as well as the VAST majority of Americans consider attempts to eliminate SS heinous.

I thought we were talking about a system beneficial to society as a whole, not using taxation as a way to somehow bring up the poor. Your whole argument seems to suggest that our tax system is designed to support the poor and distribute benefits to those that have less. That's nonsense. You DO NOT bring up the poor by taking from the rich. The government doesn't grow the economy, doesn't innovate, doesn't create jobs, it doesn't improve quality of life for citizens, it doesn't provide for defense. The private market provides all of that. The more you take from the private market, the more the economy shrinks. Obviously the goal of a flat tax is to equalize everyone at a federal level to eliminate the selfish interest in the receipt of direct benefits. Or you could argue the fair and just Constitutional route, but you don't seem to like the Constitution.

It feels like your entire argument around Social Security, and taxes, revolve around an appeal to emotion. You cannot successfully argue for something like Social Security without going into the negative effects to society and a provide a (rough) assessment of the overall impact. Are we damaging society more than we're helping the elderly? Measuring the net effect on society is the only real measurement of success, anything else is just liberal lip-service.

Facts just don't matter to you because you have your mind made up.  44.4% of senior citizens would be in poverty without social security. That number drops to 9.1% with social security.  There is just no realistic replacement to it.  44.4% of senior's would be on welfare and the other 53.6% would have much less disposable income.  I give you credit for persistence but your arguments don't pass the smell test.  I just see the society you envision with the robber barons running everything and the masses in squalor. 
http://www.cbpp.org/research/social-security-keeps-22-million-americans-out-of-poverty-a-state-by-state-analysis

[Yaeger]

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS.

 Means testing will kill the incentive to save. My wife and I have earned a low to middle income for all of our marriage. But we lived frugally, invested in real estate, and the stock market. We also started a small business and pay the full 12.4% SS tax. By means testing my SS, you're telling me I was stupid for being open 363 days a year, 10 hours a day for the last 15 years. I could have been non Mustachian and ate a restaurants, bought a bigger house, trucks,  boats,  jet skis,  and had vacations. Means testing by your numbers would take about $36,000  away from my wife and my retirement. I would have been better off spending it while I was young. My daughter would have liked a car when she was in college.
  At 61, I hope I'm old enough that means testing won't happen to me.
I just now, became one of those old people that votes to save my SS. (-:
 If you want to fix SS;
Raise the retirement age, since the forties, life expectancy has increase over 4 years for those living to 65.
Raise the cap on SS taxes.
Raise the FICA tax rate.
Lower the COLA .
Seems like I had a fifth change, but I'm not remembering it now.

Yes, you're stupid now as the SS benefit algorithms return less of your SS earnings back to you the higher your income was. Starting in 1994, your SS earnings over a certain amount will be 50% or 85% subject to tax. You're getting screwed already, you'll get screwed more in the future, and by allowing this program to go on you'll be screwing your daughter even more.

Everyone pays the 12.4%, don't be fooled. That 6.2% paid by the employer impacts every worker's wages. Employers don't care if the employer or employee pay, it all adds to the total cost per worker. If you raise the FICA tax rate, you'll shorten wage growth and increase unemployment/underemployment. Phasing out the program won't provide a disincentive to saving if you have a plan to phase it out. It's a huge disincentive to saving now. Putting more of the financial risk on the worker will actually increase savings, plus workers will get a significantly higher average rate of return on their investment.

Why should be raise the cap? What incentives are there for the rich to pay into a program they won't benefit from? Why would we force someone to pay for insurance they can never use?

It seems like, not to pick on you, but people want Social Security around for selfish reasons. They've 'invested' money into it and want a return on that investment. They don't care if it hurts the economy or the young. It's not a successful program, it never has been. It's a proven failure as time and time again we cut benefits and raise taxes to keep it afloat. It's literally a Ponzi scheme.

[MilesTeg]

Taxes - Flat tax. Probably Cruz's plan is the best. Democrats never talk about tax reform because a large, complicated tax plan that you need a advanced degree for only benefits the government. You can shout out how the rich don't pay a 'fair' share because no one understands how the tax code works. Hell, Americans don't even know how much tax they themselves pay. When people talk about wage growth stagnation, do they understand that since 1970 they're paying 8.4% MORE for Social Security and Medicare, half of that being deducted from their pay before they see it? Income tax was lowered in part to account for this. Below is a nice report on the tax plans of various candidates:

http://taxfoundation.org/blog/comparison-presidential-tax-plans-and-their-economic-effects

A grossly simplified, yet progressive income tax policy is a good idea. A flat income tax is an abominable idea. In reality, it would create a punishingly regressive overall tax policy.

[Yaeger]

Facts just don't matter to you because you have your mind made up.  44.4% of senior citizens would be in poverty without social security. That number drops to 9.1% with social security.  There is just no realistic replacement to it.  44.4% of senior's would be on welfare and the other 53.6% would have much less disposable income.  I give you credit for persistence but your arguments don't pass the smell test.  I just see the society you envision with the robber barons running everything and the masses in squalor. 
http://www.cbpp.org/research/social-security-keeps-22-million-americans-out-of-poverty-a-state-by-state-analysis

Facts don't matter to me (supposedly) so you don't want to talk about it? I acknowledge the good it does, you need to acknowledge the harm it does. How about answering a simple question then: how does Social Security harm our society and what impact does that, and the program's trends, have on our future?

[Bucksandreds]

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS.

 Means testing will kill the incentive to save. My wife and I have earned a low to middle income for all of our marriage. But we lived frugally, invested in real estate, and the stock market. We also started a small business and pay the full 12.4% SS tax. By means testing my SS, you're telling me I was stupid for being open 363 days a year, 10 hours a day for the last 15 years. I could have been non Mustachian and ate a restaurants, bought a bigger house, trucks,  boats,  jet skis,  and had vacations. Means testing by your numbers would take about $36,000  away from my wife and my retirement. I would have been better off spending it while I was young. My daughter would have liked a car when she was in college.
  At 61, I hope I'm old enough that means testing won't happen to me.
I just now, became one of those old people that votes to save my SS. (-:
 If you want to fix SS;
Raise the retirement age, since the forties, life expectancy has increase over 4 years for those living to 65.
Raise the cap on SS taxes.
Raise the FICA tax rate.
Lower the COLA .
Seems like I had a fifth change, but I'm not remembering it now.

Yes, you're stupid now as the SS benefit algorithms return less of your SS earnings back to you the higher your income was. Starting in 1994, your SS earnings over a certain amount will be 50% or 85% subject to tax. You're getting screwed already, you'll get screwed more in the future, and by allowing this program to go on you'll be screwing your daughter even more.

Everyone pays the 12.4%, don't be fooled. That 6.2% paid by the employer impacts every worker's wages. Employers don't care if the employer or employee pay, it all adds to the total cost per worker. If you raise the FICA tax rate, you'll shorten wage growth and increase unemployment/underemployment. Phasing out the program won't provide a disincentive to saving if you have a plan to phase it out. It's a huge disincentive to saving now. Putting more of the financial risk on the worker will actually increase savings, plus workers will get a significantly higher average rate of return on their investment.

Why should be raise the cap? What incentives are there for the rich to pay into a program they won't benefit from? Why would we force someone to pay for insurance they can never use?

It seems like, not to pick on you, but people want Social Security around for selfish reasons. They've 'invested' money into it and want a return on that investment. They don't care if it hurts the economy or the young. It's not a successful program, it never has been. It's a proven failure as time and time again we cut benefits and raise taxes to keep it afloat. It's literally a Ponzi scheme.

The incentive is called avoiding prison by paying the level of taxes which society decides on as a whole.  You're not that good at this incentive thing even though you rail non stop about it when it is used the other way to benefit the rich. Where is the proof of failure that you speak of? I am not calling you any names but this is just a question. Have you been diagnosed with any severe mental illness/personality disorder?

[beltim]

It's literally a Ponzi scheme.

No it's not, and spouting this sort of easily verifiable gibberish casts a pall on the rest of your claims.  For those interested in exactly how Social Security is not like a ponzi scheme, we've talked about it before: http://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-under-attack/

[Bucksandreds]

Facts just don't matter to you because you have your mind made up.  44.4% of senior citizens would be in poverty without social security. That number drops to 9.1% with social security.  There is just no realistic replacement to it.  44.4% of senior's would be on welfare and the other 53.6% would have much less disposable income.  I give you credit for persistence but your arguments don't pass the smell test.  I just see the society you envision with the robber barons running everything and the masses in squalor. 
http://www.cbpp.org/research/social-security-keeps-22-million-americans-out-of-poverty-a-state-by-state-analysis

Facts don't matter to me (supposedly) so you don't want to talk about it? I acknowledge the good it does, you need to acknowledge the harm it does. How about answering a simple question then: how does Social Security harm our society and what impact does that, and the program's trends, have on our future?

Benefits of SS
Keeps a third of seniors out of poverty
Raises the living standards of the rest
Acts as a type of longevity insurance
Protects some of our most vulnerable citizens from dumping their entire assets/future assets in to scams/bad investments (what would happen if SS disappeared and seniors controlled all of their pension)

Costs of SS
12.4% tax  (6.2% from you and 6.2% from your employer)

People now spend about 20% of their lives in their senior years. 12.4% (6.2% direct) tax during the 40-50% of your life that you work for all the benefit of poverty allevement and, if anything, SS should be expanded.  The numbers just don't struggle when they're compared to your fear mongering that's not backed up by anything other than your opinion.

[starguru]

SS will have a problem in the future, not now.  We could keep the current level of SS taxation and require people to save money on top of that, which might be enough to avoid future disaster.  As I pointed out earlier, we have an example of this:  Australia's superannuation system.  Even with all its flaws, it seems to have succeeded in benefitting society as a whole and drastically raised the average inheritance in the country (implying that people's retirement years are well funded). 

[Yaeger]

Taxes - Flat tax. Probably Cruz's plan is the best. Democrats never talk about tax reform because a large, complicated tax plan that you need a advanced degree for only benefits the government. You can shout out how the rich don't pay a 'fair' share because no one understands how the tax code works. Hell, Americans don't even know how much tax they themselves pay. When people talk about wage growth stagnation, do they understand that since 1970 they're paying 8.4% MORE for Social Security and Medicare, half of that being deducted from their pay before they see it? Income tax was lowered in part to account for this. Below is a nice report on the tax plans of various candidates:

http://taxfoundation.org/blog/comparison-presidential-tax-plans-and-their-economic-effects

A grossly simplified, yet progressive income tax policy is a good idea. A flat income tax is an abominable idea. In reality, it would create a punishingly regressive overall tax policy.

I wouldn't mind throwing in a negative income tax or EITC (or entertaining the idea), but I disagree that equal proportional taxation could be punishing. These are taxes for services that the people voted for. If they're not willing to sacrifice for them, maybe we should be thinking twice about the public services being provided.

I'd also hope people are thinking about how our current system of progressive taxation impacts the wages paid, benefits, and economic growth that would impact the poor. Raising taxes on the rich does not limit the negative economic effects to the rich. In the 1990's we imposed a luxury tax on yachts, thinking that only the rich bought yachts. However, the tax impacted the poor and middle class more than the rich as the rich stopped buying yachts, the industry tanked, people lost jobs, and the rich shifted to available substitutes.

Costs of SS
12.4% (6.2% from you and 6.2% from your employer)

People now spend about 20% of their lives in their senior years. 12.4% (6.2% direct) tax during the 40-50% of your life that you work for all the benefit of poverty allevement and, if anything, SS should be expanded.  The numbers just don't struggle when they're compared to your fear mongering that's not backed up by anything other than your opinion.

Wow, I wonder what you think the negative effects of Defense spending are if that's your methodology. Is it "It takes taxes?" Here's a little more on the negative effects of Social Security to balance that misty-eyed optimism with a much needed touch of realism. Look for a macroeconomic analysis on the harmful effects to society.

http://www.cato.org/publications/commentary/social-securitys-coming-crash-certain-end-entitlement

For more info on the trends and the dangers associated with those trends:
https://www.cbo.gov/publication/51129
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51011-SSOptions_OneCol.pdf Starting from page 8.

[Yaeger]

The incentive is called avoiding prison by paying the level of taxes which society decides on as a whole.  You're not that good at this incentive thing even though you rail non stop about it when it is used the other way to benefit the rich. Where is the proof of failure that you speak of? I am not calling you any names but this is just a question. Have you been diagnosed with any severe mental illness/personality disorder?

So if society 'as a whole' decided to tax people named Bucksandreds 95% of his income, no one else, you'd be okay with that? You don't think there's a document that upholds the ideal of fairness and proportionality in regards to the burdens of society? Maybe the right of the individual vs the tyranny of the majority? Oh wait.. we have something like that..

Let me spell it out for you before you turn us into another France. People respond to incentives. If you raise taxes, people will change their behavior, businesses will leave, bad things will happen. People will stop hiring workers, stop investing, stop innovating. Supply side economists call this the Laffer Curve, people have choices and people spend (or earn) their money with that choice. That's why raising taxes does not always raise revenues. Forcing people to join a program they can't use or avoid jail is pretty similar to a totalitarian state. This is why no one takes you seriously, that and the casual insults. Can we keep this civil please?

[Bucksandreds]

Taxes - Flat tax. Probably Cruz's plan is the best. Democrats never talk about tax reform because a large, complicated tax plan that you need a advanced degree for only benefits the government. You can shout out how the rich don't pay a 'fair' share because no one understands how the tax code works. Hell, Americans don't even know how much tax they themselves pay. When people talk about wage growth stagnation, do they understand that since 1970 they're paying 8.4% MORE for Social Security and Medicare, half of that being deducted from their pay before they see it? Income tax was lowered in part to account for this. Below is a nice report on the tax plans of various candidates:

http://taxfoundation.org/blog/comparison-presidential-tax-plans-and-their-economic-effects

A grossly simplified, yet progressive income tax policy is a good idea. A flat income tax is an abominable idea. In reality, it would create a punishingly regressive overall tax policy.

I wouldn't mind throwing in a negative income tax or EITC (or entertaining the idea), but I disagree that equal proportional taxation could be punishing. These are taxes for services that the people voted for. If they're not willing to sacrifice for them, maybe we should be thinking twice about the public services being provided.

I'd also hope people are thinking about how our current system of progressive taxation impacts the wages paid, benefits, and economic growth that would impact the poor. Raising taxes on the rich does not limit the negative economic effects to the rich. In the 1990's we imposed a luxury tax on yachts, thinking that only the rich bought yachts. However, the tax impacted the poor and middle class more than the rich as the rich stopped buying yachts, the industry tanked, people lost jobs, and the rich shifted to available substitutes.

Costs of SS
12.4% (6.2% from you and 6.2% from your employer)

People now spend about 20% of their lives in their senior years. 12.4% (6.2% direct) tax during the 40-50% of your life that you work for all the benefit of poverty allevement and, if anything, SS should be expanded.  The numbers just don't struggle when they're compared to your fear mongering that's not backed up by anything other than your opinion.

Wow, I wonder what you think the negative effects of Defense spending are if that's your methodology. Is it "It takes taxes?" Here's a little more on the negative effects of Social Security to balance that misty-eyed optimism with a much needed touch of realism. Look for a macroeconomic analysis on the harmful effects to society.

http://www.cato.org/publications/commentary/social-securitys-coming-crash-certain-end-entitlement[/url]

For more info on the trends and the dangers associated with those trends:
https://www.cbo.gov/publication/51129
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51011-SSOptions_OneCol.pdf Starting from page 8.

Advocates of Social Security claim that it benefits lowincome recipients, but Social Security actually discriminates against women, minorities, and anyone else with a shorter life expectancy

That's directly from your link. Was this proofread by anyone or did the author write it on a napkin while his manic libertarian euforia took control of him? Women live longer than men and if that's not what he meant then he really needs to learn to write more eloquently. That is a whole bunch of circular logic libertarian propaganda who's biggest claim is that it's bad because is costing more because people are living longer and needing more medical care. Isn't that just evidence for it being more important, going forward? 

[Bucksandreds]

The incentive is called avoiding prison by paying the level of taxes which society decides on as a whole.  You're not that good at this incentive thing even though you rail non stop about it when it is used the other way to benefit the rich. Where is the proof of failure that you speak of? I am not calling you any names but this is just a question. Have you been diagnosed with any severe mental illness/personality disorder?

So if society 'as a whole' decided to tax people named Bucksandreds 95% of his income, no one else, you'd be okay with that? You don't think there's a document that upholds the ideal of fairness and proportionality in regards to the burdens of society? Maybe the right of the individual vs the tyranny of the majority? Oh wait.. we have something like that..

Let me spell it out for you before you turn us into another France. People respond to incentives. If you raise taxes, people will change their behavior, businesses will leave, bad things will happen. People will stop hiring workers, stop investing, stop innovating. Supply side economists call this the Laffer Curve, people have choices and people spend (or earn) their money with that choice. That's why raising taxes does not always raise revenues. Forcing people to join a program they can't use or avoid jail is pretty similar to a totalitarian state. This is why no one takes you seriously, that and the casual insults. Can we keep this civil please?

It's called the 16th Amendment. It was added to your precious constitution to do exactly what you claim the constitution can't do. It's there to allow the federal government to levy income taxes how congress and the president see fit. If you don't like it then the amendment needs repealed. It makes your constitutionality argument laughably weak.

[Bucksandreds]

The incentive is called avoiding prison by paying the level of taxes which society decides on as a whole.  You're not that good at this incentive thing even though you rail non stop about it when it is used the other way to benefit the rich. Where is the proof of failure that you speak of? I am not calling you any names but this is just a question. Have you been diagnosed with any severe mental illness/personality disorder?

So if society 'as a whole' decided to tax people named Bucksandreds 95% of his income, no one else, you'd be okay with that? You don't think there's a document that upholds the ideal of fairness and proportionality in regards to the burdens of society? Maybe the right of the individual vs the tyranny of the majority? Oh wait.. we have something like that..

Let me spell it out for you before you turn us into another France. People respond to incentives. If you raise taxes, people will change their behavior, businesses will leave, bad things will happen. People will stop hiring workers, stop investing, stop innovating. Supply side economists call this the Laffer Curve, people have choices and people spend (or earn) their money with that choice. That's why raising taxes does not always raise revenues. Forcing people to join a program they can't use or avoid jail is pretty similar to a totalitarian state. This is why no one takes you seriously, that and the casual insults. Can we keep this civil please?

Im the one that no one is taking seriously here?  For every France out there I can name 5 nations who have higher taxes than the U.S. that have a healthier happier population than us. Maintaining SS, treating passive income the same or closer to earned income and expanding the inheritance tax and income for the working poor are hardly far left ideas. About 30-50 countries would consider these ideas things that their right supports.

[MilesTeg]

I wouldn't mind throwing in a negative income tax or EITC (or entertaining the idea), but I disagree that equal proportional taxation could be punishing. These are taxes for services that the people voted for. If they're not willing to sacrifice for them, maybe we should be thinking twice about the public services being provided.

The issue is that "equal proportional" taxation is simply not equitable. When you tax the middle and lower classes, you directly impact their ability to survive and improve their lot. When you tax the upper and 1%s, you don't. All taxes disproportionately effect the lower classes more than the upper classes. Every single penny matters to a single mom raising kid(s) on a low wage job (and others similar folks). The same is not true for the upper classes/1%s, or even people just more well off than others, such as myself.

It's as simple as that.

You seem to be afflicted with at least a moderate case of Affluent Male Libertarian disease and clearly don't understand the implications about what you are proposing.

[Yaeger]

I wouldn't mind throwing in a negative income tax or EITC (or entertaining the idea), but I disagree that equal proportional taxation could be punishing. These are taxes for services that the people voted for. If they're not willing to sacrifice for them, maybe we should be thinking twice about the public services being provided.

The issue is that "equal proportional" taxation is simply not equitable. When you tax the middle and lower classes, you directly impact their ability to survive and improve their lot. When you tax the upper and 1%s, you don't. All taxes disproportionately effect the lower classes more than the upper classes. Every single penny matters to a single mom raising kid(s) on a low wage job (and others similar folks). The same is not true for the upper classes/1%s, or even people just more well off than others, such as myself.

It's as simple as that.

You seem to be afflicted with at least a moderate case of Affluent Male Libertarian disease and clearly don't understand the implications about what you are proposing.

If you tax my business to provide more benefits for low income workers, I'm going to pay my workers less. If you mandate I provide health insurance, I'm going to adjust my worker's pay, benefits, hours to keep costs as close to the original total as I can. If you tax my income more, I'm going to buy less products, I'm going to invest less, I'm going to lower the demand for low income workers. This will drive down wages and benefits for those at the bottom. You're taxing away their future by limiting economic growth, the only real method of combating poverty. If you're fine with keeping the poor where they're at, by all means keep taxing the producers.

You're taxing them for things that they're using either way, you think because you're avoiding direct taxation the poor are not being affected? The rich aren't really paying for it, that's not how economics works. You're introducing inefficiencies in the market by taxing the rich to provide for the poor, instead of creating an environment where employers voluntarily strive to hire more, raise wages, etc. Look at total compensation drop vs productivity and compare that to the ECI (employee cost index). Regulations, wage controls, and taxes all drive wages down and increase unemployment.

Taxes do not, have not, and will not solve poverty. The problem isn't that the rich aren't paying enough, it's that the total amount paid is a drag on society and a flat tax would distribute that burden equitably onto the actual voters championing these programs. People should have some skin in the game to avoid the tyranny of the majority.

It's called the 16th Amendment. It was added to your precious constitution to do exactly what you claim the constitution can't do. It's there to allow the federal government to levy income taxes how congress and the president see fit. If you don't like it then the amendment needs repealed. It makes your constitutionality argument laughably weak.

I missed you, we always have the best conversations. Congress and the President can tax you however they want, but as far as I'm aware it doesn't allow them to spend it however they want or establish programs that grant them powers not granted to the federal government by the Constitution. It's not mentioned as a role of the federal government in Art 1 Sec 8, and it seems like it'd fall under the 9th and 10th Amendments.

[EnjoyIt]

What I find so interesting is that over the decades our government spending has been skyrocketing.  But the poor are no better off.  I really don't think the government has an income problem.  It has a spending problem.  The government is anti-mustachian.  If the government can only learn to live on less, balance a budget, and pay off some debt will this country have real prosperity.  I wouldn't even mind paying a lump sum $100K to pay my share of the debt if the government would cut my taxes forever.

[ender]

Im the one that no one is taking seriously here?  For every France out there I can name 5 nations who have higher taxes than the U.S. that have a healthier happier population than us. Maintaining SS, treating passive income the same or closer to earned income and expanding the inheritance tax and income for the working poor are hardly far left ideas. About 30-50 countries would consider these ideas things that their right supports.

It's hard to take either of you seriously to be honest and since you guys are saying such standoffish things in such a... less than constructive way, you've basically both hijacked what could have been an interesting thread.

[jrhampt]

I think SS benefits us all - rich and poor.  My parents, for example, have no retirement savings and live almost entirely off SS (with a small amount of income from part time jobs).  I am so thankful that they have their basic needs taken care of.  SS has protected them (and me!).  I expect to have to help them out more as their health deteriorates, but I am thankful for SS.  For myself, as part of a household with much higher net worth and income than my parents, I am thankful that SS is in place as a defined income system which will serve as a backup to the variable income that my retirement investments will provide.  I think anyone who cannot see how SS benefits EVERYONE in society is not old enough to have seen the direct impact on their own lives, or the impact on close friends and family members.

[acroy]

To OP question:
Yes I would. They are taking 12.4% iirc of my income to prop up a system which is heading toward bankruptcy. Yes it is a Ponzi scheme, set up for political gain (read the history) and founded on the assumption of favorable demographics.

[Bucksandreds]

To OP question:
Yes I would. They are taking 12.4% iirc of my income to prop up a system which is heading toward bankruptcy. Yes it is a Ponzi scheme, set up for political gain (read the history) and founded on the assumption of favorable demographics.

Here are 3 fixes that prevent Social security bankruptcy while shifting the burden of fixing it to all (higher income level taxed, slightly lower benefits and later retirement age)

http://www.cnbc.com/2015/08/13/3-ways-to-fix-social-securitys-funding-shortfall.html

1. Raise the annual wage ceiling on which payroll taxes are paid. The program used to capture 90 percent of all wage income with payroll taxes. But years of rising income inequality have pushed more and more wages above the ceiling. Today's $118,500 tax cap would need to roughly double to result in Social Security again capturing 90 percent of wages. This step alone will close as much as a third or more of the system's projected 75-year shortfall.

2. Raise the full retirement age to 69 or 70. It's a sensible reflection of not only longevity gains but people's ability and desire to continue working into their late 60s and beyond. This change, phased in over many years, could close nearly half of the shortfall. However, many people can't keep working until age 70. So I also would boost early retirement benefits, reducing the net improvement to the program.

3. Reduce the program's cost-of-living adjustment by about 0.3 of a percentage point a year. Program supporters howl about such a change, but compromises must be made here. I think we can live with this shift, and a reduction in the adjustment would close nearly 20 percent of the long-term funding shortfall all by itself.

The facts of how to erase any funding shortfall are so not draconian that it's laughable to suggest the program is bankrupt with no realistic way out.

[Yaeger]

1. Raise the annual wage ceiling on which payroll taxes are paid. The program used to capture 90 percent of all wage income with payroll taxes. But years of rising income inequality have pushed more and more wages above the ceiling. Today's $118,500 tax cap would need to roughly double to result in Social Security again capturing 90 percent of wages. This step alone will close as much as a third or more of the system's projected 75-year shortfall.

Although the nominal value of the tax max has grown from $3,000 in 1937 to $106,800 today, in inflation-adjusted dollars the tax max declined from 1937 until the late 1960s, and then grew once it was indexed to wage growth in 1975. In wage-adjusted dollars, the tax max has remained roughly constant since the mid-1980s. (For an easy reference, a $3,000 cap in 1937 is equal to $49,000 today.)

Historically, an average of roughly 83 percent of covered earnings have been subject to the payroll tax. In 1983, this figure reached 90 percent, but it has declined since then. As of 2010, about 86 percent of covered earnings fall under the tax max.

Don't make assumptions without looking at the trends and historical information. Today's cap is FAR higher than historical averages. It's even higher than other country's comparable social programs.

https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

[Bucksandreds]

1. Raise the annual wage ceiling on which payroll taxes are paid. The program used to capture 90 percent of all wage income with payroll taxes. But years of rising income inequality have pushed more and more wages above the ceiling. Today's $118,500 tax cap would need to roughly double to result in Social Security again capturing 90 percent of wages. This step alone will close as much as a third or more of the system's projected 75-year shortfall.

Although the nominal value of the tax max has grown from $3,000 in 1937 to $106,800 today, in inflation-adjusted dollars the tax max declined from 1937 until the late 1960s, and then grew once it was indexed to wage growth in 1975. In wage-adjusted dollars, the tax max has remained roughly constant since the mid-1980s. (For an easy reference, a $3,000 cap in 1937 is equal to $49,000 today.)

Historically, an average of roughly 83 percent of covered earnings have been subject to the payroll tax. In 1983, this figure reached 90 percent, but it has declined since then. As of 2010, about 86 percent of covered earnings fall under the tax max.

Don't make assumptions without looking at the trends and historical information. Today's cap is FAR higher than historical averages. It's even higher than other country's comparable social programs.

https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

A raise of .6% of the employer portion and .6% of the employee portion would be a very good step that could be phased in over 5 years or so.  I'm serious.  It wouldn't cover 100% of the shortfall but would definitely shrink it. These are the kinds of solutions that the right has to come up with.  If the left wants the rich to pay the bills and the right doesn't, then the right needs to come up with viable alternatives. Thank you for providing a viable alternative in comparison to the typical fear mongering and feet dragging of the right.

Also that same link you provided shows that at inception, SS tax covered 100% earnings except for those in the top 3% of income.  That figure now (according to your link) covers 100% of earnings except for those in the top 6-7%.  Not maintaining the taxation system, as originally designed, would be a significant reason that it is underfunded today. Your link doesn't entirely support your argument.

[nereo]

...
Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

I am confused why you've concluded that "it's never been a solvent program." To the best of my knowledge, SS has yet to be unable to pay out its benefits.  That, to me, suggests that it has worked as designed for a very long time, and that it's potential problems are in the future.

[Telecaster]

I am confused why you've concluded that "it's never been a solvent program." To the best of my knowledge, SS has yet to be unable to pay out its benefits.  That, to me, suggests that it has worked as designed for a very long time, and that it's potential problems are in the future.

I'm starting to wonder if some of the posters in this thread are living in an alternate universe.   SS has generated an enormous surplus of revenue over its lifespan.   How does that meet any reasonable definition of insolvent? 

[Yaeger]

...
Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

I am confused why you've concluded that "it's never been a solvent program." To the best of my knowledge, SS has yet to be unable to pay out its benefits.  That, to me, suggests that it has worked as designed for a very long time, and that it's potential problems are in the future.

Solvency the ability for an organization to meet it's long term financial commitments. Social Security has always had a short term goal, raising taxes every few years until 1990 for a total tax increase since inception of 620% to maintain roughly the same level of benefits. If it were solvent, we wouldn't need to increase taxes on a portion of the populace that won't benefit from this public good. Social Security is not solvent, it has never been solvent as it has never been able to meet its long term commitments. So if you pay 5% FICA taxes through your working career, that same 5% tax level cannot support your expected retirement benefit costs.

The fault is in the design of the system, it relies on the worker-to-retiree ratio. As the number of workers to retirees shrink, and continues to shrink, it'll necessitate a increase in taxes, a cut in benefits, or a combination of the two. The number of workers to retirees is expected to continue to decline and economic growth which has been slowing over time is expected to further limit revenue available to Social Security funds. A solvent program wouldn't be consistently addressed as an increasing concern in the yearly CBO's Budget Outlooks as programmatic spending growth outstrips revenue and economic growth.

[2lazy2retire]

Heaven forbid higher taxes on those who have the most. Heaven forbid doing something (higher taxes to pay for social expenditure) which is actually shown to grow an economy. https://www.ucl.ac.uk/economics/undergraduate/module-list/furukawa.pdf
Your opinion, which you've decided is fact, seems much more credible than science.

PS raising the income limit would raise my taxes as well. Doesn't make it the wrong thing.

Using fancy looking data that doesn't support your point doesn't really prove that the rich need to pay more or that higher taxes grow an economy.

"To my knowledge no study has examined an impact of income tax on economic growth when income inequality is considered." The entire paper is a weak argument at best and only looks at incentives for the 'lower ability' people and not the reverse incentives for the high income earners.

http://www.brookings.edu/~/media/research/files/papers/2014/09/09-effects-income-tax-changes-economic-growth-gale-samwick/09_effects_income_tax_changes_economic_growth_gale_samwick.pdf
http://taxfoundation.org/article/what-evidence-taxes-and-growth

Most economists, I use that term loosely, tend to support the idea that lower taxes helps growth. But when you look at taxes you need to look at effective taxation. The rates for the top 10% are lower today than the marginal rates were 40 years ago, but the effective tax rate is about the same. Things like the ACA (2013), medicare tax increases (1994), Social Security becoming taxable (1993) are just examples of additional taxes added under the radar, but do add to the effective tax rate. Combine that with the historic increases in state and local taxes and the rich are paying the same in taxes as they were under Carter. Whether you believe in the Laffer Curve or not, there is historical evidence that points to the fact that people respond to tax increases (look at the reason France lowered its top tax rate). People have choices and raising taxes does not always raise revenue.

Nothing is stopping you from donating your money to the government if you feel like you're not doing enough for social expenditures. Don't push your belief onto others though.

Just to be clear - your answer to SS is charity?

[Yaeger]

Also that same link you provided shows that at inception, SS tax covered 100% earnings except for those in the top 3% of income.  That figure now (according to your link) covers 100% of earnings except for those in the top 6-7%.  Not maintaining the taxation system, as originally designed, would be a significant reason that it is underfunded today. Your link doesn't entirely support your argument.

I'd be amendable to reduce FICA taxes to the tax level as it was originally designed at 2% vice 12.4% in return for increasing the amount subject to Social Security tax to the bottom 97% of all income.

[2lazy2retire]

Social Security - the fun stuff. Phase it out. Start means-testing today. Anyone that earns over $30k in regular retirement income gets $0 in SS.

 Means testing will kill the incentive to save. My wife and I have earned a low to middle income for all of our marriage. But we lived frugally, invested in real estate, and the stock market. We also started a small business and pay the full 12.4% SS tax. By means testing my SS, you're telling me I was stupid for being open 363 days a year, 10 hours a day for the last 15 years. I could have been non Mustachian and ate a restaurants, bought a bigger house, trucks,  boats,  jet skis,  and had vacations. Means testing by your numbers would take about $36,000  away from my wife and my retirement. I would have been better off spending it while I was young. My daughter would have liked a car when she was in college.
  At 61, I hope I'm old enough that means testing won't happen to me.
I just now, became one of those old people that votes to save my SS. (-:
 If you want to fix SS;
Raise the retirement age, since the forties, life expectancy has increase over 4 years for those living to 65.
Raise the cap on SS taxes.
Raise the FICA tax rate.
Lower the COLA .
Seems like I had a fifth change, but I'm not remembering it now.

Clearly Yaeger is only concerned with himself, not only does he complain about the possibility of higher taxes for the wealthy to help shore up SS he suggests the lower middle classes should be made to shoulder the cost of his cunning plan. Of course if all else fails you can rely on charity - Jaysus I hope I'm never dependant on the likes of you for that charity

[nereo]

...
Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

I am confused why you've concluded that "it's never been a solvent program." To the best of my knowledge, SS has yet to be unable to pay out its benefits.  That, to me, suggests that it has worked as designed for a very long time, and that it's potential problems are in the future.

Solvency the ability for an organization to meet it's long term financial commitments. Social Security has always had a short term goal, raising taxes every few years until 1990 for a total tax increase since inception of 620% to maintain roughly the same level of benefits. If it were solvent, we wouldn't need to increase taxes on a portion of the populace that won't benefit from this public good. Social Security is not solvent, it has never been solvent as it has never been able to meet its long term commitments. So if you pay 5% FICA taxes through your working career, that same 5% tax level cannot support your expected retirement benefit costs.

This is a strange way of looking at it.  SS has met all of it's obligations to date.  The fact that it gets its revenue from taxes doesn't change that.  To use an analogy, Coca-cola has repeatedly raised the cost of it's marque soda every few years of it's ~130 year history. By the logic above, Coca-Cola has never been a solvent company.

[Bucksandreds]

...
Social Security's problems today have been happening for almost 80 years. It's never been a solvent program and it's not able to control its growth.  The fact that it's 'popular' just contributes to the growth. Tell you what, I propose raising the SS tax on everyone by 10% while keeping the cap in place. It helps the elderly, people will benefit, there's nothing wrong with paying more in taxes for programs they will benefit from, right? Funding problem solved for the next 70 years.

I am confused why you've concluded that "it's never been a solvent program." To the best of my knowledge, SS has yet to be unable to pay out its benefits.  That, to me, suggests that it has worked as designed for a very long time, and that it's potential problems are in the future.

Solvency the ability for an organization to meet it's long term financial commitments. Social Security has always had a short term goal, raising taxes every few years until 1990 for a total tax increase since inception of 620% to maintain roughly the same level of benefits. If it were solvent, we wouldn't need to increase taxes on a portion of the populace that won't benefit from this public good. Social Security is not solvent, it has never been solvent as it has never been able to meet its long term commitments. So if you pay 5% FICA taxes through your working career, that same 5% tax level cannot support your expected retirement benefit costs.

The fault is in the design of the system, it relies on the worker-to-retiree ratio. As the number of workers to retirees shrink, and continues to shrink, it'll necessitate a increase in taxes, a cut in benefits, or a combination of the two. The number of workers to retirees is expected to continue to decline and economic growth which has been slowing over time is expected to further limit revenue available to Social Security funds. A solvent program wouldn't be consistently addressed as an increasing concern in the yearly CBO's Budget Outlooks as programmatic spending growth outstrips revenue and economic growth.

Yaeger.  What is your gross income per year?  I'm not asking this in a way to see who makes more. I am asking this to try to understand your motivation.  My hypothesis is that you earn in the top 5% or so of earners and have decided that you pay too much already.  Another question is how come people on the right say "you can move out of the country if you don't like how we are doing things here'" when it's very simple and just as logical to say the exact same thing back to them when the person on the  right's opinion disagrees with 75% or more of Americans.  Isn't that what democracy is?  We elect Congress and President who then tries to enact our goals for us that they campaign on?