Americans should not be entitled to Social Security

[desertadapted]

Attached is an interesting link about the financial impacts of different proposed "fixes" to social security.  It's a neat tool.  There is a link to their methodology, which provides: "The baseline metrics are based on the 2024 Social Security Trustees Report, and the effects of policy choices are (in most cases) estimated based on the 2023 Social Security Trustees Report."

One thing I'd note is that even limiting benefits for the top 20% of earners (much less the top 10% or top 1%) would have a very limited impact on long term solvency.  In other words, reducing payments made to the very wealthy or the FIRE community seems more like a stunt than a solution.  Note that to be in the top 20% of earners, you'd have a household income of about $130K.

Anyway, there have been a lot of proposals in this thread, and I thought it might be interesting for you to see how your preferred proposal pencils out. 

https://www.crfb.org/socialsecurityreformer/

[iris lily]

Yes, just like raising taxes significantly on the top 1+% will not solve our deficit spending problem. But it sounds good for some politicians.

[Psychstache]

But do the wealthy care about their monthly “taxed” SS checks? No…

Sez who?  Maybe a billionaire.  But I know a bunch of seniors who don't need it but who still happily take their SS check every month, and would be PISSED if someone took it away.

As always, the Simpsons is on top of this:

https://www.youtube.com/watch?v=nszh_JYpl_E

[simonsez]

But do the wealthy care about their monthly “taxed” SS checks? No…

Sez who?  Maybe a billionaire.  But I know a bunch of seniors who don't need it but who still happily take their SS check every month, and would be PISSED if someone took it away.

Yeah not sure of the size of the group that doesn't want it and complains about receiving it but billionaires or whoever doesn't want it are free to give a pecuniary gift to the US government.  Treasury has had an account set up since 1843 for this express purpose.  Seems like an odd thing for OP to complain about when the govt would happily receive it back AND there can be a tax deduction for the itemizers.  Win-win?

Also, not everyone is on SS.  Millions are legal citizens with W2 jobs and still are not on SS.  Since many of these people are educated with college degrees and can earn decent amounts over a lifetime, I wish the SS program would include them and benefit from the extra base from which to collect 6.2/12.4%.

Yeah, if I was the SS czar I'd add another bend point at ~5% and make the cap on W2 earnings MUCH higher if not unlimited.  I think non-age-related SS tweaks are easier for the public to swallow and collect revenue increases from (including socially/politically) than higher brackets or something that is more in your face.  E.g. If you knew that increasing the contributions/income that pays into SS in a given year by X was financially equivalent to increasing the FRA by one year for everyone born after Year Y, I think more bar conversations would contain complaints about the age being increased ("We were promised!") compared to "Can you believe they increased the contribution base from $160,200 in 2023 to $168,600 in 2024 and now they want to make it $X in 2025?!".

[roomtempmayo]

A big reason the social security program has such broad support is that it's for everyone who spent at least ten years working. Means-tested benefits have a lot of social stigma in our society.

Amartya Sen has this famous line (I imagine it's famous since even I know it) that, "Benefits meant exclusively for the poor often end up being poor benefits."

The argument is that not only does targeting erode political support, it distorts markets and creates all sorts of perverse incentives.  Here's the original article: https://socialprotection.gov.bd/wp-content/uploads/2017/07/Amartya-Sen-on-Targeting.pdf

[seattlecyclone]

I think the separate funding aspect of SS is a socio-political thing, in which there’s supposed to be a different kind of covenant between the government and the people. It was sold as if it were an insurance policy—with the government pulling the finance strings behind the curtain—for better or worse.

Yes, it was sold as an insurance program. Prior to the New Deal the federal government was much more limited in scope than it is today. Supreme Court precedent of the time placed much greater limits on what the federal government could do. The context of the time required such an expansive social program to be framed as insurance in order to get the political support to pass and to get the judicial support to survive.

Even though it was framed as insurance it was never actually run like an insurance company. Individual payroll taxes ("premiums") were never tied to any sort of individual actuarial analysis. Benefits were explicitly designed with "bend points" that would repay low-income workers at a higher rate than high-income workers. Any surplus generated from the "premiums" was not invested in financially productive assets as an insurance company would do, but were instead immediately spent on the government's other obligations.

But that aside, if you just fund everything through general taxes, you’re left with the exact same problems I described above—and your solution doesn’t solve the problems.

I think it's important to discuss what the problem is in the first place. I don't personally believe that a difference in the amount of payroll tax collected from current workers vs. the amount of benefits paid to disabled people/retirees/widow(er)s/orphans is inherently a problem. The notion that these numbers should be kept in balance is a historical relic of the political landscape of the time that the social security program was created 90 years ago. The country has changed a bit since then. I think it's entirely reasonable to consider that funding for social security payments could come from income taxes or estate taxes or other taxes just as easily as payroll taxes, especially because we've already been doing that every year since the "trust fund" went into drawdown mode.

So, you want to talk about overall government deficits? Fine. Let's do it from a more holistic perspective though. There's some difference of opinion in economic circles about what the optimal level of public debt and deficit would be. I certainly haven't studied the issue enough to claim an expert opinion on that. Now that interest rates have increased, deficit spending is more expensive than it once was, and so there's probably more incentive to move toward a balanced budget than we would have seen a decade ago. What we should do about taxes and spending to move in that direction is a good conversation to have. Potentially increasing payroll taxes should be a part of that conversation, and so could decreasing social security benefits. I just believe that these changes should be able to be weighed on an equal basis alongside other potential changes in other taxes and expenditures. Treating social security as its own little mini-government that must sink or swim based on the revenue from one particular tax isn't the best way to do it.

[swashbucklinstache]

I'd venture a guess that treating it like other programs is more likely to lower the required credits than raise them, right or wrong. I say that to emphasize that your proposed changes to SS may be good ideas whether there even is a problem or not or if they are a good way to solve it. This way lies a politically contentious UBI discussion though.

I will say we've gotten a fair few threads recently with potentially click-baity titles that might be engendering some snarkiness. I don't mind but, if it bothers you, an alternative title that's more neutral would help.

[Sibley]

You forget why Social Security was put into place originally: a LOT of senior citizens and disabled people were homeless or starving because they couldn't work and thus had no income. If you're ok with returning to that, I have a problem with you as a human being.

[Ron Scott]

Whatever I get in Social Security payments will simply end up as higher numbers in my spreadsheet. I don’t need it. I shouldn’t get it. Draw a reasonable cutoff someplace and declare ineligibility.

Today’s article in the Times is sobering on a number of fronts, but one piece brought all this home. Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000.  Younger generations are making up that difference.

I don't get this math, and can't find the article. The average age in the US is about 78 years. So this couple would get $1.34 mill, split two ways, over 13 years? That's $50k each? I've had a fairly high salary, well above average, and the SS statement projects not even close to that number if I retire at 65. If I retire at 70 I believe my estimate is ~$40k/year. How does an average household income get you $100k/year per HH in SS?

What you're also no including is that half of people live shorter than the average life expectancy. And then the SS payments stop. Millions of people take SS, collect for 3-4 years then die. How much do they get vs paying in? And of course some live decades longer than average.

I don't quite understand you issue with early retirement either. You will already get less? On the SSA website you can change the "future expected salary", and your payout will go down. By default it assume what you made last year you will make till 67, but retire today, set it do zero and you get way less.

Thirdly; the reason everyone get it is why it has survived! If we know one thing it's that rich people are greedy, and even $50k in SS is something they want, so they don't want social security taken away. Means tested programs are always waaay easier to cut, because "they do nothing for me, and only go to those other, undeserving people".
As a sidenote; this is how the strong welfare systems in Scandinavia survive. Many/most of them are for "everyone". Maternity leave, free child care, unemployment benefits, health care; you will not be denied even if you made $40 mill last year! Of course a multi-millionaire don't need the $20k in subsidies for their kid's daycare, but they get it, and therefore don't fight to get rid of it. At least not as hard as they would have otherwise.

OK, so markpst posted a link to the article in this thread. You should be able to find it.

Regarding your comment about everybody having to be eligible for a social benefit or the Greedy Rich will try to undo it, I don’t know where you’re from but I, like many Americans, am ineligible for lots of social programs, and have to pay much more for others because of income cutoffs. Still, I am more than glad to pay taxes for them for those less lucky.

It’s not even about being altruistic or egalitarian: I own US equities and I stand to benefit when the average American has $$$ and spends it on corporate stuff. As nicely stated above “everyone does better when everyone does better”.

Maybe you guys are different? It’s OK.

[Scandium]

OK, so markpst posted a link to the article in this thread. You should be able to find it.

Regarding your comment about everybody having to be eligible for a social benefit or the Greedy Rich will try to undo it, I don’t know where you’re from but I, like many Americans, am ineligible for lots of social programs, and have to pay much more for others because of income cutoffs. Still, I am more than glad to pay taxes for them for those less lucky.

It’s not even about being altruistic or egalitarian: I own US equities and I stand to benefit when the average American has $$$ and spends it on corporate stuff. As nicely stated above “everyone does better when everyone does better”.

Maybe you guys are different? It’s OK.

Well good for you for being altruistic, or pragmatic, or whatever. In fact I'm in the US, and voluntarily continue living in a "high tax state", because I know the less fortunate here are helped by my tax dollars.

But in case you haven't noticed the US has a whole political party (or two; if you count libertarians), that half the people vote for, almost solely devoted to dismantling as many social programs as possible. Heck, even some programs that their voters rely on! Pretty much just to lower taxes for rich people and juice corporate profits for a few more quarters. They're still mad about the New Deal for god's sake! They want to remove public education, end/privatice social security (they tried under GWB), remove unemployment benefits. Trump floating ending the income tax? So pretty clear that a pretty significant part of the "rich class" aren't as altruistic as you (and I).

As an aside, I'm convinced many of these billionaires aren't stupid, and they know global warming is real for example, or benefits for single mothers is good for society, but reason that plunging the planet into a post-apocalyptic hellscape is worth it to get another year or two of higher profits and a few more trips on their (bigger) yacht.

[reeshau]

In it's current state, Social Security has a very poor rate of return even per the SSA themselves. 
The Tables at the bottom of this report will show you how poorly the SSA manages and gets a return on investment. 
See here:
https://www.ssa.gov/OACT/NOTES/ran5/an2004-5.html
I realize this analysis is dated, I couldn't find newer available.  It may be that this type of analysis isn't seen as useful inside SSA anymore. 

That's because it is only allowed to invest in Treasuries, which is both something no other long-term investor does (pension, insurer, 401k) and, essentially, spending money for a bunch of government IOU's.

This was part of the point with the push to "privatize" SS in Dubya's administration; to allow for stock investing, like a 401k.  With inherent risks, but also much more likely to do better over a working lifetime.

[Ron Scott]

In it's current state, Social Security has a very poor rate of return even per the SSA themselves. 
The Tables at the bottom of this report will show you how poorly the SSA manages and gets a return on investment. 
See here:
https://www.ssa.gov/OACT/NOTES/ran5/an2004-5.html
I realize this analysis is dated, I couldn't find newer available.  It may be that this type of analysis isn't seen as useful inside SSA anymore. 

No, the point in Dubya’s day was that the banks were bribing—I mean “donating to the campaigns” of—representatives who would vote to have the government be their largest investor LOL.

That's because it is only allowed to invest in Treasuries, which is both something no other long-term investor does (pension, insurer, 401k) and, essentially, spending money for a bunch of government IOU's.

This was part of the point with the push to "privatize" SS in Dubya's administration; to allow for stock investing, like a 401k.  With inherent risks, but also much more likely to do better over a working lifetime.

[reeshau]

In it's current state, Social Security has a very poor rate of return even per the SSA themselves. 
The Tables at the bottom of this report will show you how poorly the SSA manages and gets a return on investment. 
See here:
https://www.ssa.gov/OACT/NOTES/ran5/an2004-5.html
I realize this analysis is dated, I couldn't find newer available.  It may be that this type of analysis isn't seen as useful inside SSA anymore. 

No, the point in Dubya’s day was that the banks were bribing—I mean “donating to the campaigns” of—representatives who would vote to have the government be their largest investor LOL.

That's because it is only allowed to invest in Treasuries, which is both something no other long-term investor does (pension, insurer, 401k) and, essentially, spending money for a bunch of government IOU's.

This was part of the point with the push to "privatize" SS in Dubya's administration; to allow for stock investing, like a 401k.  With inherent risks, but also much more likely to do better over a working lifetime.

It was certainly both points.  But the sales pitch was to get a better return, as a way to close the (at the time) funding gap.

[Ron Scott]

OK, so markpst posted a link to the article in this thread. You should be able to find it.

Regarding your comment about everybody having to be eligible for a social benefit or the Greedy Rich will try to undo it, I don’t know where you’re from but I, like many Americans, am ineligible for lots of social programs, and have to pay much more for others because of income cutoffs. Still, I am more than glad to pay taxes for them for those less lucky.

It’s not even about being altruistic or egalitarian: I own US equities and I stand to benefit when the average American has $$$ and spends it on corporate stuff. As nicely stated above “everyone does better when everyone does better”.

Maybe you guys are different? It’s OK.

Well good for you for being altruistic, or pragmatic, or whatever. In fact I'm in the US, and voluntarily continue living in a "high tax state", because I know the less fortunate here are helped by my tax dollars.

Not sure you read my post but the point was helping others DOES NOT require altruism. (Even the greediest gain when the economy works for all.) Whatever.

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

[Laura33]

OK, so markpst posted a link to the article in this thread. You should be able to find it.

Regarding your comment about everybody having to be eligible for a social benefit or the Greedy Rich will try to undo it, I don’t know where you’re from but I, like many Americans, am ineligible for lots of social programs, and have to pay much more for others because of income cutoffs. Still, I am more than glad to pay taxes for them for those less lucky.

It’s not even about being altruistic or egalitarian: I own US equities and I stand to benefit when the average American has $$$ and spends it on corporate stuff. As nicely stated above “everyone does better when everyone does better”.

Maybe you guys are different? It’s OK.

Well good for you for being altruistic, or pragmatic, or whatever. In fact I'm in the US, and voluntarily continue living in a "high tax state", because I know the less fortunate here are helped by my tax dollars.

Not sure you read my post but the point was helping others DOES NOT require altruism. (Even the greediest gain when the economy works for all.) Whatever.

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

It's not about being "altruistic."  The point is that your view -- that everyone gains when everyone can participate in the economy -- is not the mainstream view.  As Scandium noted in the next paragraph of the post that you dropped:

But in case you haven't noticed the US has a whole political party (or two; if you count libertarians), that half the people vote for, almost solely devoted to dismantling as many social programs as possible. Heck, even some programs that their voters rely on! Pretty much just to lower taxes for rich people and juice corporate profits for a few more quarters. They're still mad about the New Deal for god's sake! They want to remove public education, end/privatice social security (they tried under GWB), remove unemployment benefits. Trump floating ending the income tax? So pretty clear that a pretty significant part of the "rich class" aren't as altruistic as you (and I).

If you want a program to be politically successful and last for longer than a single Administration, you need to target it to the mainstream view, so that you get sufficient voters of both parties.  Broad entitlements tend to do that; programs that benefit only the poor do not.

[Ron Scott]

If you want a program to be politically successful and last for longer than a single Administration, you need to target it to the mainstream view, so that you get sufficient voters of both parties.  Broad entitlements tend to do that; programs that benefit only the poor do not.

Not sure I agree with your positions on program success and broad entitlements. Medicaid and SNAP have been around since the mid-‘60s and seem to be holding up pretty well. Even Obamacare—covering less than 15% of Americans?—has outlasted a pretty concerted effort to reverse it, it’s now in its 3rd administration, and republicans are mostly quiet on it as a plan for 2024/25.

I think it’s kind of foolish for the public to pay for programs-for-all that many have no need for. I don’t need SS, and I don’t want some wack new and unnecessary taxing scheme to come along so people like me can continue getting checks.

The concept, if-everybody-gets-a-taste-everybody-will-support-it seems pretty bad to me.

[swashbucklinstache]

If you want a program to be politically successful and last for longer than a single Administration, you need to target it to the mainstream view, so that you get sufficient voters of both parties.  Broad entitlements tend to do that; programs that benefit only the poor do not.

Not sure I agree with your positions on program success and broad entitlements. Medicaid and SNAP have been around since the mid-‘60s and seem to be holding up pretty well. Even Obamacare—covering less than 15% of Americans?—has outlasted a pretty concerted effort to reverse it, it’s now in its 3rd administration, and republicans are mostly quiet on it as a plan for 2024/25.

I think it’s kind of foolish for the public to pay for programs-for-all that many have no need for. I don’t need SS, and I don’t want some wack new and unnecessary taxing scheme to come along so people like me can continue getting checks.

The concept, if-everybody-gets-a-taste-everybody-will-support-it seems pretty bad to me.

ACA is like the poster child for being for everybody not just poor people.

The first rule of politics is you don't have to like it for it to be true. Not saying this one is true though I think it is.

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

[Ron Scott]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

[MrGreen]

Don't forget that besides a fairly small AGI exception, Social Security income is taxed. Now that RMDs are pushed to 75 people can avoid it a little longer but there's nothing stopping an individual from delaying to 70 before taking payments and then taking withdrawals from IRAs to increase taxation on their social security payment. So a wealthy person is going to lose a chunk of their payment anyway.

[swashbucklinstache]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

[MrGreen]

Don't forget that besides a fairly small AGI exception, Social Security income is taxed. Now that RMDs are pushed to 75 people can avoid it a little longer but there's nothing stopping an individual from delaying to 70 before taking payments and then taking withdrawals from IRAs to increase taxation on their social security payment. So a wealthy person is going to lose a chunk of their payment anyway.

My post triggered a thought last night. I wonder how much effect it would have if taxes on social security income were immediately returned to the trust fund? I don't think that currently happens. I don't think I've ever seen that given as an option to bolster Social Security either.

[Ron Scott]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

[Tempname23]

 Paraphrasing:  A 65-year-old couple with average life expectancy and average household income (about $90,000 in 2023) who retires in 2025 would receive $1.34 million in benefits, even though they had paid only $720,000. 

The system is broken.

 My employer and myself only paid $131,000 into the SS. To pay $720,000 in SS you would have had to earn $5.8M over your lifetime, I'm pretty sure that is way to high to fit most Americans. My wife and I only earned $1,75M. However, If every dollar of my (just me) $131,000 of SS tax I paid had been invested in the S&P500, I would have $2,597,040, using the 4% rule, that's $103,881* per year, vs the $37,000 I'll receive at 70. Plus my kids could inherit what the $2,597,040 would grow to, with SS they get $255.
Yes, the system is broken.

  * there is a problem with my numbers. SS is more than a retirement program, it is a disability policy and a policy that covers your family if you should die early. I don't have the data to take out the cost of such policies.

[swashbucklinstache]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

Sure. Or replace the number with whatever number would make the trust fund project to be solvent for 250 years.

[Ron Scott]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

Sure. Or replace the number with whatever number would make the trust fund project to be solvent for 250 years.

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

I really can’t give you more than that. If you don’t get the gist of what I’m trying to say we can chalk it up to my poor communications abilities.

[nereo]

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

I really can’t give you more than that. If you don’t get the gist of what I’m trying to say we can chalk it up to my poor communications abilities.

Consider what is being said here in aggregate, including in your own posts.

1) as a “rich person” you are most  likely to get much less out of SS than you put in due to the “bend points” for SS withholding. Simply put, most of a high wage earners withholding are designed to replace just 15% of their indexed earnings, while the lowest wage earners will have 90%. That is by design.

2) as a “rich person” you’ve opined that you “don’t need it” and that you and other affluent people “shouldn’t get it”.


To your argument, the former already goes a long way toward addressing the latter. You seem to be arguing for an even more dramatic shift where high earners pay even more and/or receive less (or in your case: nothing at all). Conceptually that’s easy enough to do - just raise the income cap so very high earners continue to contribute even more into the system during their highest grossing years, and/or place a cap on the absolute maximum SS one can receive. It’s currently over $4800/mo and that only goes to people that made the maximum taxable amount for at least 35 years and waited until age 70 to take distributions. For the most part those distributions will then be taxed as income, but we could lower that amount and justify it as “you had 35+ years of extraordinary wages”.


You have one other point which you have brought up repeatedly;
3. People who voluntarily leave the system should not get any benefits
Others have explained why this would be logistically challenging to enforce, as people choose not to work for a variety of reasons (caregiver, supporting-spouse, to volunteer, tertiary education, FIRE, disability). Realize here that the system already penalizes a person heavily for not working at least 35 years. Those that choose to FiRE at 40 will almost certainly get substantially less at age 67 due to a whole bunch of zeros in their formula.

In a way, we and most people here are in agreement with you that the insolvency could be resolved by placing a higher burden on very high income earners. The existing system already does this to some degree, and modest adjustments could ensure solvency. Trying to enforce a “means based” SS distribution would require a level of government oversight which doesn’t currently exist and would be extremely difficult to enforce (just think of all the ways a high-net worth individual can shield their assets)

[swashbucklinstache]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

Sure. Or replace the number with whatever number would make the trust fund project to be solvent for 250 years.

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

I really can’t give you more than that. If you don’t get the gist of what I’m trying to say we can chalk it up to my poor communications abilities.

Thanks for humoring me. I can agree with the sentiment, even if I think in the end that the problem isn't real and that there are both more effective and politically palatable, I.e. possible, solutions.

The way you feel about this is how I felt about the recently discussed 401k reforms. Those, as I understood it, made the tax savings greater the less someone made rather than the more someone makes like it does now. Similarly though, I'm not sure there was a problem there nor if this change would actually do anything about it if there were. So it might not be good policy. But it felt more fair and logical.

[mistymoney]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

Sure. Or replace the number with whatever number would make the trust fund project to be solvent for 250 years.

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

if you don't need it what do you care if you get 50k a year in ss and then pay 50k a year more in taxes?

[mistymoney]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

no need to pick. the cutoff is 10 years.

[Ron Scott]

In practice SS is a spectrum. As a rich person you've functionally lost money on SS as you would have invested it otherwise. Does that make it ok in your eyes, that you're getting back "less" than you put in? Further, is this really about SS solvency or just not taking money? Others have pointed out that solvency isn't actually a problem nor are these solutions you're proposing the ones that the people who think about this professionally think are good ideas. This isn't attacking you or your ideas, just getting out there if your point is firmly that you don't need the money so let's find a way to get it to people who do or if it's these specific ideas about SS are deeply held beliefs on their own.

All I can do is tell you how I honestly feel about SS. If our politicians are going to hash out in the coming years how to either reduce expenditures or increase funding, I would prefer they set some cutoff—maybe Biden’s now famous $400,000 annual income, whatever—and just stop sending checks to those people.

I also feel that people who voluntarily stop making contributions—again pick a cutoff, like 20 years—become ineligible.

I really don’t know how to say this in a simpler way…

I can help via a thought exercise question based on your response. In your response you included the word "if." Would you still want these policies enacted if the "if" did not and would not ever need to happen? Imagine if tomorrow somebody at SSA discovered they had accidentally left a zero off the current fund total.

Again, because Internet, not attacking you or the idea just seeking clarity.

Just seeking clarity, and please check my math: You want us to assume the SSA “found” an amount close to the entire GDP of the US?

Sure. Or replace the number with whatever number would make the trust fund project to be solvent for 250 years.

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

I really can’t give you more than that. If you don’t get the gist of what I’m trying to say we can chalk it up to my poor communications abilities.

Thanks for humoring me. I can agree with the sentiment, even if I think in the end that the problem isn't real and that there are both more effective and politically palatable, I.e. possible, solutions.

The way you feel about this is how I felt about the recently discussed 401k reforms. Those, as I understood it, made the tax savings greater the less someone made rather than the more someone makes like it does now. Similarly though, I'm not sure there was a problem there nor if this change would actually do anything about it if there were. So it might not be good policy. But it felt more fair and logical.

I will say that more than 10% of my ideas actually become a political reality so.

[mistymoney]

If there were no impact on the country or its citizens to give me money, I will take it. If the money could be used better elsewhere, I don’t need it. Just don’t add more and more taxes on people when the proposal I originally offered would help.

I really can’t give you more than that. If you don’t get the gist of what I’m trying to say we can chalk it up to my poor communications abilities.

Consider what is being said here in aggregate, including in your own posts.

1) as a “rich person” you are most  likely to get much less out of SS than you put in due to the “bend points” for SS withholding. Simply put, most of a high wage earners withholding are designed to replace just 15% of their indexed earnings, while the lowest wage earners will have 90%. That is by design.

2) as a “rich person” you’ve opined that you “don’t need it” and that you and other affluent people “shouldn’t get it”.


To your argument, the former already goes a long way toward addressing the latter. You seem to be arguing for an even more dramatic shift where high earners pay even more and/or receive less (or in your case: nothing at all). Conceptually that’s easy enough to do - just raise the income cap so very high earners continue to contribute even more into the system during their highest grossing years, and/or place a cap on the absolute maximum SS one can receive. It’s currently over $4800/mo and that only goes to people that made the maximum taxable amount for at least 35 years and waited until age 70 to take distributions. For the most part those distributions will then be taxed as income, but we could lower that amount and justify it as “you had 35+ years of extraordinary wages”.


You have one other point which you have brought up repeatedly;
3. People who voluntarily leave the system should not get any benefits
Others have explained why this would be logistically challenging to enforce, as people choose not to work for a variety of reasons (caregiver, supporting-spouse, to volunteer, tertiary education, FIRE, disability). Realize here that the system already penalizes a person heavily for not working at least 35 years. Those that choose to FiRE at 40 will almost certainly get substantially less at age 67 due to a whole bunch of zeros in their formula.

In a way, we and most people here are in agreement with you that the insolvency could be resolved by placing a higher burden on very high income earners. The existing system already does this to some degree, and modest adjustments could ensure solvency. Trying to enforce a “means based” SS distribution would require a level of government oversight which doesn’t currently exist and would be extremely difficult to enforce (just think of all the ways a high-net worth individual can shield their assets)

very comprehensive and well reasoned!

one thing I would add is that raising the 10 years to qualify for benefits would be catastrophic for the most vulnerable in our population. Young children who lose the primary breadwinner parent. Particularly disabled children. And when the breadwinner was already low income.

I would be in favor or lowering the years to qualify for dependent benefits of a deceased recipient.

[RetireOrDieTrying]

I am likely to offend all sides with this. Although I don't relish doing so, I'm at peace with my posture on this.

Social Security is, and always has been, a pyramidal wealth transfer mechanism sold as a retirement or disability "investment."

I despise those who use the word "investment" to be synonymous with "government spending." It tells me immediately that I'm dealing with an idiot, liar, or both.

The contingent referred to by the OP I'll wager is very small overall (people who are comfortable without S.S.). It's non-zero, but I'll bet it's not a drop in the bucket even if we do what he's advocating, because...

...With the exception of a non-majority of recipients in the disabled/orphaned/etc. categories, S.S. is nothing more than a way to use the power of government arms to involuntarily take money from those who worked for it and have their shit together to give to those who didn't and/or don't, respectively. Despite charlatans (Mr. Gore, I'm looking squarely at you) using dishonest terms such as "lock box" there hasn't been anything but a stack of un-backed IOUs since the 1960s, and both major U.S. political parties are complicit in this, because WE VOTE FOR IT.

It's just one of a legacy of "steal from future generations" initiatives by the so-called "Greatest Generation" and their useless, hopeless, (but charming) kick-the-can-down-the-road champion FDR. It is, in my opinion, taxation without representation, as all the promises made effectively imposed a tax upon people not even born yet*, who had no ability to vote or participate in the indebtedness. Now here we are getting closer and closer to holding the bag, getting absolutely violated in taxes to support people who couldn't be bothered to take command of their own financial destiny and needs.

So now we have a political choice to either understand we have been lied to, eat our losses, and stop it, or we can calculate whether our lifespan will fall within the life cycle of this Ponzi-scheme-by-any-other-name and vote to join previous generations to keep it going juuuuuuust long enough that it's the next generation's collapse.

Guess which one the American voter chooses, consistently?

*Special dishonorable mentions to Presidents Reagan, Trump, and Biden for the galactic national debt increases during their terms which also constitutes taxation without representation upon future generations.

[nereo]

It's just one of a legacy of "steal from future generations" initiatives by the so-called "Greatest Generation" and their useless, hopeless, (but charming) kick-the-can-down-the-road champion FDR. It is, in my opinion, taxation without representation, as all the promises made effectively imposed a tax upon people not even born yet*, who had no ability to vote or participate in the indebtedness. Now here we are getting closer and closer to holding the bag, getting absolutely raped in taxes to support people who couldn't be bothered to take command of their own financial destiny and needs.

In general, it is not appropriate here to use rape as a metaphor for a government program you disagree with. (See “rule 6” - forum rules. )

Yes, it’s fair to say I disagree with your position, starting with disagreeing that it was marketed as an “investment”, and that supporting government spending means you are a liar, idiot or both.

I also question your assertion that most beneficiaries of the system “didn’t have their shit together” and “couldn’t be bothered to take command of their own financial destiny or needs”. Based on the formula alone it favors those who have steady, middle tier income for 3.5 decades and does not penalize against those who have taken command of their finances.

Critically, any Congress could vote to alter SS payments, effective either immediately or phased in.  This has happened a number of times already, all of which calls into question your assertion that it’s taxation without representation.

Tl;dr:  look, a libertarian!

[clarkfan1979]

I am likely to offend all sides with this. Although I don't relish doing so, I'm at peace with my posture on this.

Social Security is, and always has been, a pyramidal wealth transfer mechanism sold as a retirement or disability "investment."

I despise those who use the word "investment" to be synonymous with "government spending." It tells me immediately that I'm dealing with an idiot, liar, or both.

The contingent referred to by the OP I'll wager is very small overall (people who are comfortable without S.S.). It's non-zero, but I'll bet it's not a drop in the bucket even if we do what he's advocating, because...

...With the exception of a non-majority of recipients in the disabled/orphaned/etc. categories, S.S. is nothing more than a way to use the power of government arms to involuntarily take money from those who worked for it and have their shit together to give to those who didn't and/or don't, respectively. Despite charlatans (Mr. Gore, I'm looking squarely at you) using dishonest terms such as "lock box" there hasn't been anything but a stack of un-backed IOUs since the 1960s, and both major U.S. political parties are complicit in this, because WE VOTE FOR IT.

It's just one of a legacy of "steal from future generations" initiatives by the so-called "Greatest Generation" and their useless, hopeless, (but charming) kick-the-can-down-the-road champion FDR. It is, in my opinion, taxation without representation, as all the promises made effectively imposed a tax upon people not even born yet*, who had no ability to vote or participate in the indebtedness. Now here we are getting closer and closer to holding the bag, getting absolutely raped in taxes to support people who couldn't be bothered to take command of their own financial destiny and needs.

So now we have a political choice to either understand we have been lied to, eat our losses, and stop it, or we can calculate whether our lifespan will fall within the life cycle of this Ponzi-scheme-by-any-other-name and vote to join previous generations to keep it going juuuuuuust long enough that it's the next generation's collapse.

Guess which one the American voter chooses, consistently?

*Special dishonorable mentions to Presidents Reagan, Trump, and Biden for the galactic national debt increases during their terms which also constitutes taxation without representation upon future generations.

@RetireOrDieTrying I actually agree with you that SS is a wealth transfer tax. I listened to a podcast two years ago on the math behind SS. It's very interesting. When you are a low income earner (25K/year), you essentially get all your contributions back. IF you are a high income earner (125K), you get like 60% of your money back. I'm ball parking with the 60% number. There are probably some calculators out that they can get to an exact number.

However, you need to do your homework on the national debt. If you replace the word "Biden" with "Obama" your statement would be correct. Biden is a poor choice to blame for "galactic national debt increases". When you look at national debt to GDP, it was 124 when Biden took office. Now it's 121. Total debt is a meaningless statistic. It only has meaning when compared to GDP, which is basically an income to debt ratio.

I currently have 1.05 million dollars worth of debt at age 45. My net worth is 1.6 million and my total compensation at work is 90K (with benefits) and another 35K/year in rental income. When I was 25 years old, my debt was only 20K. My net worth was -15K and I made 12K/year as a grad student with no assets. 

https://fred.stlouisfed.org/series/GFDEGDQ188S

[RetireOrDieTrying]

It's just one of a legacy of "steal from future generations" initiatives by the so-called "Greatest Generation" and their useless, hopeless, (but charming) kick-the-can-down-the-road champion FDR. It is, in my opinion, taxation without representation, as all the promises made effectively imposed a tax upon people not even born yet*, who had no ability to vote or participate in the indebtedness. Now here we are getting closer and closer to holding the bag, getting absolutely (edit: violated) in taxes to support people who couldn't be bothered to take command of their own financial destiny and needs.

In general, it is not appropriate here to use (edit: SA) as a metaphor for a government program you disagree with. (See “rule 6” - forum rules. )

Yes, it’s fair to say I disagree with your position, starting with disagreeing that it was marketed as an “investment”, and that supporting government spending means you are a liar, idiot or both.

I also question your assertion that most beneficiaries of the system “didn’t have their shit together” and “couldn’t be bothered to take command of their own financial destiny or needs”. Based on the formula alone it favors those who have steady, middle tier income for 3.5 decades and does not penalize against those who have taken command of their finances.

Critically, any Congress could vote to alter SS payments, effective either immediately or phased in.  This has happened a number of times already, all of which calls into question your assertion that it’s taxation without representation.

Tl;dr:  look, a libertarian!

In order:

Word edited (including in the quote) - thanks for the heads-up.

Ahem. What is the word at the top of SSA's own site: https://www.ssa.gov/oact/progdata/investheld.html

I didn't say that supporting government spending made you a liar, idiot, or both - I said that people who call government spending "investments" are thus. I'm not an anarchist.

If someone's strategy is "I'm going to rely upon forced taxation from some future generation for my retirement" then that is certainly my view of them.

I can see how that opinion could be logically defended.

Nope. I think their posture on national defense and foreign policy is downright perilous. I don't really have a political home these days. I used to be GOP until they lost their ever-livin' minds and I see that most parties want to control different parts of my life instead of leaving grown-assed adults alone to live their life as they see fit.

[RetireOrDieTrying]

*Special dishonorable mentions to Presidents Reagan, Trump, and Biden for the galactic national debt increases during their terms which also constitutes taxation without representation upon future generations.

@RetireOrDieTrying However, you need to do your homework on the national debt. If you replace the word "Biden" with "Obama" your statement would be correct. Biden is a poor choice to blame for "galactic national debt increases". When you look at national debt to GDP, it was 124 when Biden took office. Now it's 121. Total debt is a meaningless statistic. It only has meaning when compared to GDP, which is basically an income to debt ratio.

Thanks for the pointer to the numbers. It seemed unfair to me to skewer the WWI/WWII/Vietnam eras as wartime spending is a different animal altogether.

Pres. Biden is still one of the higher offenders, but based upon your advocated ratio I'm willing to add Pres. Obama to the List of Shame(TM), along with 41 & 43. It really reinforces my belief that both parties are fiscally hopeless. In my entire lifetime, Pres. Clinton is the only one who can lay claim to a balanced budget, and that plaudit could arguably be shared with the same Congress who wasted so much time and political capital on a soiled dress. (sigh)

[Ron Scott]

I must admit I am getting a retro, 20th Century vibe about the most recent posts above involving the national debt and economic burdens on the young and unborn. And the “no taxation without representation” charge—like MAGA’s “Don’t tread on me” —takes us WAY back to the beginning, to the American Revolution. Nice!

But tax-and-spend arguments are never any fun and make me wonder if technology will finally deliver on its promise of meaningful productivity gains for the economy. If the productivity gains are significant enough and properly managed, the government could literally “print money“ and distribute it through the Social Security system without raising taxes on individuals or causing inflation. It would be tricky to pull this off, given competing political interests, but gains in productivity do have that magic-wand feel to them (like “taxing” robots and giving us the money).

Of course a legitimate debate about whether to share those gains with us via the stock market (wearing our investor hats) or through government-forced redistribution will be interesting too. Let’s just call it a nice problem to have.
 
You may say I’m a dreamer…

[Scandium]

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

Yes exactly; I like living here, because the less fortunate are taken care of, schools are funded, trash is picked up etc etc. So I don't have people is destitute poverty all around (to "take care of themselves" as someone advocate above). And that is because taxes are "high" (by US standards, i.e. low by almost every other western country standards).

[nereo]

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

Yes exactly; I like living here, because the less fortunate are taken care of, schools are funded, trash is picked up etc etc. So I don't have people is destitute poverty all around (to "take care of themselves" as someone advocate above). And that is because taxes are "high" (by US standards, i.e. low by almost every other western country standards).

I don't even see why this is noteworthy. 
It's also why our family has voted several times in recent years to raise our own taxes, including for an issue (universal Pre-K) that was being voted on the year after our daughter had aged out. Because we are acutely aware that it will benefit other families that really, really need it, which in turn will benefit our community.

I've lived in a variety of communities, from very low tax areas with minimal services, to high-tax provinces with programs far, far above the US norm.  When looking at places to move to we *choose* higher tax areas *because* they have a better community-level QOL.

[Scandium]

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

Yes exactly; I like living here, because the less fortunate are taken care of, schools are funded, trash is picked up etc etc. So I don't have people is destitute poverty all around (to "take care of themselves" as someone advocate above). And that is because taxes are "high" (by US standards, i.e. low by almost every other western country standards).

I don't even see why this is noteworthy. 
It's also why our family has voted several times in recent years to raise our own taxes, including for an issue (universal Pre-K) that was being voted on the year after our daughter had aged out. Because we are acutely aware that it will benefit other families that really, really need it, which in turn will benefit our community.

I've lived in a variety of communities, from very low tax areas with minimal services, to high-tax provinces with programs far, far above the US norm.  When looking at places to move to we *choose* higher tax areas *because* they have a better community-level QOL.

Because Ron Scott said they're happy to pay for social programs they don't use, and implied this was common. They may be, and I am, but americans in general love nothing more than complaining about (relatively low) taxes, and how it only goes to "underserving people". That's the attitude for pretty much all republicans, and also a significant part of democrats. And why IMO social security survive because it applies to "everyone", not equally, but the broad application definitely helps it remain popular, and resistant to cut (of course since it benefits old people the most, who vote more, doesn't hurt either)

[nereo]

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

Yes exactly; I like living here, because the less fortunate are taken care of, schools are funded, trash is picked up etc etc. So I don't have people is destitute poverty all around (to "take care of themselves" as someone advocate above). And that is because taxes are "high" (by US standards, i.e. low by almost every other western country standards).

I don't even see why this is noteworthy. 
It's also why our family has voted several times in recent years to raise our own taxes, including for an issue (universal Pre-K) that was being voted on the year after our daughter had aged out. Because we are acutely aware that it will benefit other families that really, really need it, which in turn will benefit our community.

I've lived in a variety of communities, from very low tax areas with minimal services, to high-tax provinces with programs far, far above the US norm.  When looking at places to move to we *choose* higher tax areas *because* they have a better community-level QOL.

Because Ron Scott said they're happy to pay for social programs they don't use, and implied this was common. They may be, and I am, but americans in general love nothing more than complaining about (relatively low) taxes, and how it only goes to "underserving people". That's the attitude for pretty much all republicans, and also a significant part of democrats. And why IMO social security survive because it applies to "everyone", not equally, but the broad application definitely helps it remain popular, and resistant to cut (of course since it benefits old people the most, who vote more, doesn't hurt either)

...sorry, could have been more clear.  My question of "I don't even get why this is noteworthy" was directed at Ron, not you, as he was openly incredulous that people actually choose higher-tax areas.  It should be self evident that this happens, otherwise there would never be high tax areas in a democracy.

[mathlete]

I have complicated feelings on Social Security, but fundamentally, getting enough benefits to pay for healthcare and keep you out of poverty at age 65, provided that you had 35 years of full time employment, sounds good to me.

Now, maybe it should look different from how it does now. Maybe HNW individuals shouldn't get benefits. Maybe all earnings should be taxed. Maybe those with pensions from other sources should have their benefits reduced. Maybe the trust should be invested in stocks and secured debt instead of just treasury debt. Some combination of all that sounds fine.

On balance, I think the move to defined contribution retirement has been a disaster. It's worked out very well for me because I'm a freak who is obsessed with personal finance, but there is no way that it hasn't been a net drag on the economy.

Any middle-income person paying more than 50 basis points for a retirement plan is tragic. But it happens. A lot. We've created an industry around shuffling AUM, creating churn, and any number of other net negative value financial activity. You can argue that individuals should be more hands on, and I agree. But sometimes, you're just locked into the investment choices your company gives you. You can write an email to HR asking about expanding the options. You can hit the job market and make sure to ask questions about investment options in the interview. You can back off on your 401k contributions after getting the company match and then start prioritizing a self directed IRA instead, where you can pick lower cost funds. I encourage everyone to do any or all of those things. But any effort spent doing that is effort *not* spent being more productive at your job. Furthering your education in other non-financial areas. Looking after your kids and community.

As an office drone, I sort of relate it to the outsourcing and ticketing based approach to IT. It sounds like it should be good on paper. It'll reduce costs. It creates a system to track the completion of IT issues and effectiveness. In reality though, what ticketing systems do, is incentive closing out tickets, by any means possible. Fill out a form, and it will go to IT. IT will do "something", and you'll get an automated email back, saying that your issue has been resolved. If it hasn't been resolved, it's on you to create another ticket or follow the next steps laid out. But either way, the goal from the ticket system perspective, is to put the ball back in your court as quickly as possible.

For me, at least, this results in me just getting beat down by the system. I learn to live with 50% of my tech issues, solve 25% of them myself, and maybe push IT on the final 25%. This is a bad outcome. Frankly, I'm too good at my core job, and I'm paid way too much, to spend any amount of time fucking around with drivers in Windows. I *can* do that, but it's not a good use of my time.

The same is true for most people spending time managing their retirement. A pension system like SS should provide a minimum standard for retirees and we should encourage people to pursue DC for anything above and beyond that.

[mistymoney]

I have complicated feelings on Social Security, but fundamentally, getting enough benefits to pay for healthcare and keep you out of poverty at age 65, provided that you had 35 years of full time employment, sounds good to me.

Now, maybe it should look different from how it does now. Maybe HNW individuals shouldn't get benefits. Maybe all earnings should be taxed. Maybe those with pensions from other sources should have their benefits reduced. Maybe the trust should be invested in stocks and secured debt instead of just treasury debt. Some combination of all that sounds fine.

On balance, I think the move to defined contribution retirement has been a disaster. It's worked out very well for me because I'm a freak who is obsessed with personal finance, but there is no way that it hasn't been a net drag on the economy.

Any middle-income person paying more than 50 basis points for a retirement plan is tragic. But it happens. A lot. We've created an industry around shuffling AUM, creating churn, and any number of other net negative value financial activity. You can argue that individuals should be more hands on, and I agree. But sometimes, you're just locked into the investment choices your company gives you. You can write an email to HR asking about expanding the options. You can hit the job market and make sure to ask questions about investment options in the interview. You can back off on your 401k contributions after getting the company match and then start prioritizing a self directed IRA instead, where you can pick lower cost funds. I encourage everyone to do any or all of those things. But any effort spent doing that is effort *not* spent being more productive at your job. Furthering your education in other non-financial areas. Looking after your kids and community.

Lots of interesting points here.

With social security, I remember being much younger, making so so little money, and bemoaning those FICA taxes cuz they really did make a difference in my life. Would generally higher wages change the angst? Wonder why fica seems 'worse' than the income taxes for the moaning? Maybe just because it is touted as something that is going to go away so seems more optional?

Would better benefits make people more favorable towards soc sec in general? Like if we raise fica by 1% each for employer and employee and have medicare for all. And make medicare better.

 With 401k, changing jobs is the thing. Get your money out into a rollover IRA. Seems a bit criminal that you get stuck in these subpar plans for no real reason than someone is engineering things to fleece the investors. I worked for a very small employer had those 5% input fees. Talk about a drag! And then not sure if there was a fee to get it out too, but I think there was. Terrible! Such a bad deal, I used to wonder what the owners were getting out of it. When the company was sold and we all cashed out the accounts or transferred to new plan as part of the sale - the 5% company match mysteriously did not transfer. I was the only one who noticed!!! I felt sure the owners were planning on keeping it, saying we hadn't vested or something, just too suspicous. I made a big stink and we all got a second check or transfer.

I think people should be albe to transfer all vested assets out of the employer plan and into a rollover ira to manage how they see fit if they want to. That'd make some of these companies improve their offerings!!

[Ron Scott]

You chose to live in a high tax state “because” your taxes would help the needy? Really?  I haven’t heard that one yet… We live in NY because we love it here.

Yes exactly; I like living here, because the less fortunate are taken care of, schools are funded, trash is picked up etc etc. So I don't have people is destitute poverty all around (to "take care of themselves" as someone advocate above). And that is because taxes are "high" (by US standards, i.e. low by almost every other western country standards).

I don't even see why this is noteworthy. 
It's also why our family has voted several times in recent years to raise our own taxes, including for an issue (universal Pre-K) that was being voted on the year after our daughter had aged out. Because we are acutely aware that it will benefit other families that really, really need it, which in turn will benefit our community.

I've lived in a variety of communities, from very low tax areas with minimal services, to high-tax provinces with programs far, far above the US norm.  When looking at places to move to we *choose* higher tax areas *because* they have a better community-level QOL.

Because Ron Scott said they're happy to pay for social programs they don't use, and implied this was common. They may be, and I am, but americans in general love nothing more than complaining about (relatively low) taxes, and how it only goes to "underserving people". That's the attitude for pretty much all republicans, and also a significant part of democrats. And why IMO social security survive because it applies to "everyone", not equally, but the broad application definitely helps it remain popular, and resistant to cut (of course since it benefits old people the most, who vote more, doesn't hurt either)

...sorry, could have been more clear.  My question of "I don't even get why this is noteworthy" was directed at Ron, not you, as he was openly incredulous that people actually choose higher-tax areas.  It should be self evident that this happens, otherwise there would never be high tax areas in a democracy.

OK, I’m not really sure what the question is here but I’ll try to respond to the sentiments.

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I know quite a few people who claim to prefer lower tax states, and even some who have places in both NY and FL and spend more than 181 days a year OUTSIDE NY to avoid high NY income and estate taxes.

You point “It should be self evident that this happens (choosing to live in a state BECAUSE the taxes are high), otherwise there would never be high tax areas in a democracy.” I would say access to exciting urban areas, culture and arts, geography, beaches and parks, and proximity to friends and family have ALWAYS be more important to me.

[Ron Scott]

There is a tangential issue here worth considering too, i.e., management of the liberal form of capitalism.

Liberal capitalism (what The West does) has real advantages, the most important being democracy and the rule of law, which encourage faster economic development by giving people a sense of comfort in making significant investments. “The wisdom of the market” has typically been a bit smarter than having the government choose where to invest capital. But it also encourages the emergence of a somewhat entrenched upper class coupled with growing inequality. If this gets out of control populists from the right or the left will gain support for big time change and god knows what their leaders will argue for.

In any event, I’m a fan of The West’s approach (the only viable for large societies competitor today is China’s form of capitalism). I just think we need to have real democracy instead of allowing $$ to buy elections and laws, and laws should strike a better balance between breaking people’s chops and letting them do whatever.

The problems I have with solving inequality by taking $$ away from the wealthy and using it somehow to fund social programs for the rest is that a) there’s not enough $$ to do what everybody wants and b) it somehow assumes we’re incapable of creating a society in which a strong and vibrant middle class can thrive. I generally think most people want to work for good wages and be recognized for their competence and contributions. (Some pundits continue to argue that in the mid-20th century America had high marginal tax rates and a strong middle class therefore taxes CAUSED the middle class. That’s a head scratcher to me as I see it simply as a temporary correlation.

[Scandium]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw. It thought that would be so obvious to someone not purposefully dense that I didn't think I needed to specify it

[Villanelle]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw. It thought that would be so obvious to someone not purposefully dense that I didn't think I needed to specify it

Anyone but a troll, bot, provocateur, or Russian plant absolutely understood that from your post. 

[ROF Expat]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw. It thought that would be so obvious to someone not purposefully dense that I didn't think I needed to specify it

You're in good company. 

I listened to a podcast some time back in which Yvon Chouinard (the founder of Patagonia) talked about correcting people who assume that he bought a house in Wyoming because it doesn't have income tax.  He said he keeps his houses in California and continued to pay California tax because he  is happy to pay tax to support societal good.  Of course, he gave away his multi-billion dollar company, so he's not exactly a "normal" billionaire.  In fact, I gather he and his family are no longer billionaires at all, having given away the company. 

[Ron Scott]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

[Villanelle]

I have never consciously chosen a state to live in BECAUSE it has high taxes (income, property, estate, fees, etc.). I honestly never met someone who said they chose a state to live because it has high taxes until reading this thread.

I chose to live in a state with high taxes, even though I could easily move, because it has good social services/quality of life/infrastructure, etc. Rather than low taxes and crumbling infrastructure and destitute poverty everywhere, which often (no not always) is the case. Well duh, I don't live here only because high taxes, as if that in itself is benefit! It's what "high taxes" leads to that's the draw.

That “sounds” logical to some extent but when I was working I knew people who lived in Florida, Tennessee, and Texas—none of which have an income tax—and they loved it. All strong economies, good infrastructure, beautiful nature and a reasonable amount of culture.

I on the other hand am more like Fran Lebowitz, who famously said “People tell me ‘Why don’t you leave NY?’ Well sure, I’d love to leave, but where can you go…?”

  Unless it gets cold