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General Discussion => Welcome and General Discussion => Topic started by: Slee_stack on August 01, 2018, 12:11:37 PM

Title: Social Insecurity and New Parents
Post by: Slee_stack on August 01, 2018, 12:11:37 PM
An opinion piece on USAToday of the Economic Security for New Parents Act:  https://www.usatoday.com/story/opinion/2018/08/01/family-parental-leave-working-parents-social-security-marco-rubio-column/871099002/ (https://www.usatoday.com/story/opinion/2018/08/01/family-parental-leave-working-parents-social-security-marco-rubio-column/871099002/)

Does anybody have strong opinions one way or another?

On the surface, I tend to be for this.  I always prefer flexibility if given an option.   

At the same time, I wonder if people could get into trouble by not realizing the long term effect that taking benefits early might have.

As an aside...I'm not a parent.
Title: Re: Social Insecurity and New Parents
Post by: lbmustache on August 01, 2018, 12:32:06 PM
Color me skeptical. I'm curious to hear others thoughts on this. So instead of making corporate paid family leave a thing (where would those poor corporations find find the money after that huge tax cut!), I'm just paying for my child with... essentially my own money.

On the other hand, maybe it's better to pull some of that money out now, rather than later, with the way things are going...
Title: Re: Social Insecurity and New Parents
Post by: Kay-Ell on August 01, 2018, 12:38:33 PM
It’s an interesting and idea, that’s for sure. I’d be skeptical of how this would effect Social Security which is already under funded. But if it could be structured, as they claim, in a way that only effected the retirement age of the people utilizing the program, and only then by months or possibly one year, I think it has a lot of merit. I’d like to see some base level participation requirements for the parents so that they really have contributed before receiving benefits. I’d also like to see a limit placed on how many times benefits could be used over a life time, as I don’t think it’s reasonable for someone with 8 kids to assume delaying retirement for 8 years is a viable plan.
Title: Re: Social Insecurity and New Parents
Post by: mozar on August 01, 2018, 12:49:55 PM
I don't like that idea at all. The reality is that most people take social security as soon as possible and penalizing your future self is the opposite of a good idea. There are so many better ideas, like having the employer contribute to a fund. I also wonder why people can't access their own disability funds. People are already required to pay into SSDI you should be able to access it. Unless you become disabled you pay that money and you are never allowed to see it again.
Title: Re: Social Insecurity and New Parents
Post by: chemistk on August 02, 2018, 05:21:13 AM
I'm torn. I want to be skeptical about this, but I just can't.

In principle, I like it. It (mostly) shifts the responsibility of parental leave from society to the individual. Personal accountability and all that.

My employer rolled out a Parental Leave policy a few months before my second son was born, which included benefits for dads too (yay!). It was the best few weeks of time off they could have given me - especially for my wife's sake. After our first son, she was miserable (and likely suffering from then undiagnosed PPD) being at home alone most of the time with the newborn, not knowing what to do or having anyone to lean on. Our second was a completely different story. So, I am a massive fan of any Parental Leave policy.

But in practice, this just puts more pressure on a system that we all already know is overcapacity. From what I can tell, your delayed retirement would be equal to the value and not the time you receive. So, If I have this right, if you take 10 weeks off under this policy, and your expected SS benefit at first year of eligibility is 70% of today's benefit, then you'll be delaying retirement by 13 weeks.

I guess a few months doesn't sound all that bad, but what do those who need this the most know about retirement? Probably nothing, or they believe it is a pipe dream.
Title: Re: Social Insecurity and New Parents
Post by: J Boogie on August 02, 2018, 08:17:30 AM
This is a good idea and I am in favor of it.

Forcing employers to do treat their employees really well is never the answer in my opinion. Why? Well, it works great for everyone who is a FT employee for a large company. But it doesn't work great for temps, contractors, and small business employees. It doesn't work great for the self employed. It leaves them high and dry while everyone else pats themselves on the back for being part of such a great system.

What's 3-6 months tacked on to the end of 62 or more years? Those 3-6 months post childbirth are a pivotal moment in life, while the 3-6 months continuing to work while waiting to take SS are relatively insignificant.








Title: Re: Social Insecurity and New Parents
Post by: sneeds on August 02, 2018, 12:34:18 PM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?
Title: Re: Social Insecurity and New Parents
Post by: J Boogie on August 02, 2018, 01:01:47 PM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?

Based on the fact that this only exists in 4 states, I would imagine there might not be enough support for a nation-wide policy.

I'll go further and argue that using the disability fund is inappropriate.  Relative to injury or illness, parenthood is often a choice, one that you are able to prepare for.  I'm happy to have less of my paycheck so that those who become sick or injured don't have deal with as harsh of a financial hardship. I'm happy also because that might be me or my loved ones at some point, so it gives me peace of mind. I don't see the justification, especially under this umbrella, for someone who chooses to have children.

I think it might make sense for the govt to financially incentivize having children if they are in a Japan like demographic crisis, but otherwise they should just let citizens do what they choose to do and like Rubio proposes give them the option to tap their social security early for special situations like this.
Title: Re: Social Insecurity and New Parents
Post by: therethere on August 02, 2018, 01:27:21 PM
I'm happy people are finally thinking outside the box how to pay for these things. But I don't think this is the answer. People who can't think up to save some money for their 12 weeks off after having a kid are definitely not saving enough (if anything) for retirement. You'll just have to bail them out again later on in life when they realized they screwed themselves. Make up a new fund that people who want kids can pay into or something.

Having kids is a choice. And well, if you didn't think about how you were going to pay for that ahead of time.. I'd support paid or unpaid sabbatical leave that you could use as paternity/maternity leave but that's about it. Anything directly labeled as subsidized maternity/paternity leave only, and not expanded at minimum to family leave, is too one sided in my opinion.
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 02, 2018, 01:59:50 PM
Do not want. I suspect this was designed as a clever form of welfare for businesses that could save even more money by giving up family leave policies.

If this became law, companies would then be free to cancel family leave policies without the same backlash as if they canceled those policies today. This option would effectively be fooling workers to accept a pay cut as a benefit, and accept that it's reasonable that family leave is so horrible in the US.

It deftly sweeps an overdue cultural reckoning neatly under the rug.
Title: Re: Social Insecurity and New Parents
Post by: Prairie Stash on August 02, 2018, 02:17:44 PM
Similiar to the Canadian system. We get a year off, funded through the Employment Insurance (unemployment) program. 37 weeks can be used by the father or mother. If used by non primary care giver (typically the father) it reduces retirement benefits, essentially the same as the American proposal!

"Child-Rearing Provision
If you stopped working or received lower earnings to raise your children, you may be able to use the "child-rearing provision" to increase your CPP benefits.

Caring for young children can mean leaving the work force or working fewer hours. If your earnings stopped or were lower because you were the primary caregiver raising your children under the age of seven, you can request the child-rearing provision.

If you are deemed eligible, the child-rearing period will be excluded from the contributory period when calculating your CPP benefit amount, ensuring that you get the highest possible payment.

Notes: Primary caregiver
For the CPP, the primary caregiver is the person who was most responsible for the day-to-day needs of the children for the specified periods."
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 02, 2018, 02:33:56 PM
If I understand correctly, the Canadian system has no loss for the primary caregiver, and the American proposal does.
Title: Re: Social Insecurity and New Parents
Post by: Prairie Stash on August 03, 2018, 09:54:39 AM
If I understand correctly, the Canadian system has no loss for the primary caregiver, and the American proposal does.
Correct, the Child Rearing Provisions allows up to 7 years to be ignored for raising children (we calculate CPP on the contributions over 40 years, like SS but more obscure). It closes the Wage Gap in retirement, ask any feminist and they'll whip out graphs showing that women historically receive lower retirement benefits, a major component is the time spent raising children.

The American system is starting out where ours was many years ago. The system has evolved, it didn't start with all the bells and whistles. The largest hurdle is getting started, achieving perfection from the start is impossible. I think its better then the current mess you have, if you follow Canada it will also get better with time.

The system is funded through a payroll deduction (EI, which also funds lay offs for workers to look for new work) to share the costs between large and small companies. It has a hard cap on how much you can receive (income over $46k is ignored) and replaces 55% of your income below the cap (with several nuances), its heavily geared towards low income earners and limits the costs. Its done through EI,Canadians recognize that its better for society if mothers (and fathers) bond with children. It takes the long term view that families are important to society, we'll find out with future generations if we have a more cohesive society then America.

America/Canada are perfect case studies for each other. Our TFSA was brought in because your Roth IRA was so effective, thank you for that one. We constantly take the best policies from y'all, you should try it. I'm pointing out that in the debate you can easily look across the border to see what happened and you don't need to speculate, make your choice based upon how its working out here (yay or nay). Our societies aren't that much different, we're just better looking ;)
Title: Re: Social Insecurity and New Parents
Post by: Mississippi Mudstache on August 03, 2018, 10:37:13 AM
100% in favor of this idea, or any idea that provides for paid parental leave. It is not designed as I would design it, but it would be better than our current situation.

I say that as a parent expecting a child literally any day now. In addition to my wife not getting paid for the 12 weeks that she's taking off, we're also having to fork over an extra $1000 bucks a month to keep our health benefits during the interlude. We can afford it, but it's a terrible screw-over for people in less fortunate circumstances. The money would be far more meaningful to us now than it will be when we're in our 60s.
Title: Re: Social Insecurity and New Parents
Post by: fuzzy math on August 04, 2018, 08:39:18 AM
I'm happy people are finally thinking outside the box how to pay for these things. But I don't think this is the answer. People who can't think up to save some money for their 12 weeks off after having a kid are definitely not saving enough (if anything) for retirement. You'll just have to bail them out again later on in life when they realized they screwed themselves. Make up a new fund that people who want kids can pay into or something.

Having kids is a choice. And well, if you didn't think about how you were going to pay for that ahead of time.. I'd support paid or unpaid sabbatical leave that you could use as paternity/maternity leave but that's about it. Anything directly labeled as subsidized maternity/paternity leave only, and not expanded at minimum to family leave, is too one sided in my opinion.

There is already unpaid / paid (if you have the leave balances) generalized medical leave. It's called FMLA. It's not adequate for a ton of people and not accessible for others. I had my kids when I worked for a company with < 50 ppl. Guess what? No FMLA for me! I always used my paid sick leave and vacation time so I was never lacking for a paycheck, but I was also expected to go back to work when my time ran out around 6 weeks. Part of what FMLA does is assure your job. To a person who lacks the $$ but has access to FMLA, taking 12 weeks unpaid is pretty much impossible.

It's naive to state that if people can't afford their leave when they're young, that they are doomed to be leeches later in life. When I was 25 and had my first kid I still had student loans and credit card debt. Now I'm on track to FIRE by 45.

I'm not sure why so many child free people here hate on people who have children. They are the future who will grow up to be your health care providers (bank managers, lawn service people, grocery store clerks etc) when you're old, and pay the tax basis for the social security and Medicare benefits you will one day receive. I'm also not sure why so many people here have to hate on how other people will use their earned benefits. Social security is an earned benefit. If I wanna waste my money when I'm 80 on gambling and chippendales, no one is going to stop me. So why hate on a young couple using the benefit for what is going to be financially accounted for later for them?
Title: Re: Social Insecurity and New Parents
Post by: teen persuasion on August 04, 2018, 09:19:23 AM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?

NY is rolling out a paid Family Leave program, and so far it looks good to me.  It's not dependent on employers - yay, because I work for a very small place and have zero other benefits due to cost.  This is funded thru payroll deductions, and its a rounding error in magnitude, roughly a buck per biweekly paycheck for me.  It's not just for maternity leave, it's for any family issue (me, spouse, kids, parents, etc.) and I recently heard something about funeral/bereavement leave being added.  It's ramping up over a few years, but I believe it's up to 8 weeks right now and climbs gradually up to 12 weeks in the next 2 years.  It coordinates with federal Family Leave, so there's the important job protection clause.

As long as the federal government shirks it's duty in this area, the states have to (and are beginning to) step up to fill the gap, one by one.  Hopefully more states will follow their lead, and/or eventually the federal government will craft a plan based on the best state plans.

As far as the Rubio plan - I'd prefer the NY plan where I pay in as I go, rather than borrow from my future benefits.  The NY plan also seems more broad than Rubio's maternity/paternity leave only plan, assuming the article accurately described the whole proposal.
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 04, 2018, 10:57:03 AM
If I understand correctly, the Canadian system has no loss for the primary caregiver, and the American proposal does.
The American system is starting out where ours was many years ago. The system has evolved, it didn't start with all the bells and whistles. The largest hurdle is getting started, achieving perfection from the start is impossible. I think its better then the current mess you have, if you follow Canada it will also get better with time.

I get what you're saying. You may be right. But I'm less confident about incremental improvement. Incremental improvement sometimes cements weird or terrible decisions long-term, or just gets reversed every 4-8 years. Healthcare here is for rich people, and the incremental improvement got a hatchet job instead of continued improvement. Now rates and access to care are back to awful, and there's even less political will to do anything about it.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 04, 2018, 11:14:52 AM
People who have kids need to plan ahead and fund things for themselves, not rely on other taxpayers, and this should not come out of SS coffers based on future benefits, either.   As a single person with no kids, I'm already paying MUCH higher taxes to subsidize families because they get big tax breaks, plus I'm paying high property taxes which mostly go towards the schools and parks, which families use, not me.  The average family of four in my area pays less property tax than me.  So, I'm not in favor of any additional funding for maternity / parental leave that comes from other workers, taxpayers, or employers.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 04, 2018, 11:17:40 AM
In addition to being unpaid, FLMA has this weird hole where you need to have worked for an employer for 12 months before you're eligible for unpaid leave for having a child. So if you have an unexpected accident/pleasant surprise in the first couple of months after switching employers, a woman may not be eligible for any time off (payed or unpaid) at all when delivering a child.

Anyway the proposal seems reasonable. I like that it treats new fathers and mothers evenhandedly, and that the benefit would still accessible to families where only one person works to begin with. I don't have strong feelings either way on whether the money comes from raising the retirement ages slightly for the parents of the new child, or from slightly raising payroll taxes/slightly raising retirement ages/slightly cutting benefits across the whole SS program. If the former makes it easier to pass than the latter, then then go for it.
Title: Re: Social Insecurity and New Parents
Post by: Much Fishing to Do on August 04, 2018, 11:20:56 AM
I like the idea, but given its more of a voluntary thing than something like disability I don't see the reason to limit it just to someone who just had a child.  Maybe everyone could have up to 12-24 months of this available (after they have in a certain minimum amount of credits) over the course of their lifetime to use at whatever time they decide they want to (govt sabbatical pay....) .  I'm sure there would be a lot of complexities in figuring out the cost of the cash flow though.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 04, 2018, 11:23:49 AM
I'm not sure why so many child free people here hate on people who have children.

How much of this is people on the MMM forums in general and how much is specifically DreamFire?

I don't hang out in a lot of the childrearing threads/discussions so there may well be a strong undercurrent of this that I don't see, but I've also noticed in various online forums and dicussions that a single person repeating the same idea over and over again can start to feel like a crowd, especially since I don't always check user account names when reading through a thread.

Regardless, as someone who doesn't have kids and seems less and less likely to have the chance to, I do appreciate that you and all the other folks who put so much time, energy, and money into raising the next generation that'll keep civilization running.

(https://images.gr-assets.com/hostedimages/1442073577ra/16189203.gif)
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 04, 2018, 11:41:19 AM
I'm not sure why so many child free people here hate on people who have children.

How much of this is people on the MMM forums in general and how much is specifically DreamFire?

I don't hate them.  I merely point out that I'm subsidizing them.  I don't mind doing some of that, as I've mentioned before, but it's excessive.  I've provided some relevant math in some previous threads.

Plenty of people prefer not to have kids and don't regret not having them, but it doesn't mean they hate them or the parents.
https://forum.mrmoneymustache.com/welcome-to-the-forum/older-childless-mustachians-what-do-you-regret/
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 04, 2018, 12:14:28 PM
That term "subsidizing" is a little... ugly? Incomplete?

You pay taxes to support your society because it's better for the whole society, which is the sum of all the kids people had over time, not just "what's happening today."

You "subsidize" because you were subsidized - you didn't agree to it, got to enjoy it anyway, and on to the next round.

No one was born in a log cabin they built themselves.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 04, 2018, 01:28:27 PM
That term "subsidizing" is a little... ugly? Incomplete?

I would call it appropriate, and accurate, as the math shows.  As far as being incomplete, I have expanded on this in length in some of the previous threads on the topic.

Quote
You pay taxes to support your society because it's better for the whole society, which is the sum of all the kids people had over time, not just "what's happening today."

You "subsidize" because you were subsidized - you didn't agree to it, got to enjoy it anyway, and on to the next round.

No one was born in a log cabin they built themselves.

Nice spin, but that totally misses the point I was making, that single people are being burdened with an unfair amount of the tax burden, and then it makes it even worse when you factor in that a single person uses far LESS public resources than a family of four.  For a household income of $70K/yr, I showed using a 2018 tax calculator that the federal income tax paid per household member was approximately 30X higher for the single person.  Feel free to run the numbers yourself if you don't believe me.  Property tax is just more salt on the wound that pays mostly for schools and parks.  Taxpayer funded maternity leave I've heard people advocate for is just piling on.  Having kids shouldn't get you out of paying your fair share of taxes or for paying to support your own kids that you chose to have.

Again, I don't hate parents or kids, but I think there should be more fairness in the tax system and for people taking responsibility for their own kids.
Title: Re: Social Insecurity and New Parents
Post by: fuzzy math on August 04, 2018, 01:42:16 PM
In addition to being unpaid, FLMA ... (cut)

FMLA is not inherently unpaid, if you have sick time or PTO you are allowed to use it.


Sent from my iPhone using Tapatalk
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 04, 2018, 01:50:58 PM
The law only requires unpaid leave. Employers can elect to allow employees to (or require them to) use accumulated paid leave/sick leave if the employer offers either of those benefits.

Since it's "elect" presumably an employer is not under a legal obligation to do so, no? But this is not my area of expertise.
Title: Re: Social Insecurity and New Parents
Post by: golden1 on August 04, 2018, 02:55:13 PM
I don’t love it, but it isn’t a terrible idea psychologically in the sense that people who don’t have children won’t be resentful of those that do, which I see all the time in my workplace.

It’s too bad that people can’t be less petty and realize that people having children is good for everyone in the long run.  I feel like having children used to be more of a community responsibility and now is considered an individual choice.  Childless folks get the indirect benefits of those who do have kids and increasingly want to opt out of any responsibility. 
Title: Re: Social Insecurity and New Parents
Post by: fuzzy math on August 04, 2018, 06:11:16 PM
People who have kids need to plan ahead and fund things for themselves, not rely on other taxpayers, and this should not come out of SS coffers based on future benefits, either.   As a single person with no kids, I'm already paying MUCH higher taxes to subsidize families because they get big tax breaks, plus I'm paying high property taxes which mostly go towards the schools and parks, which families use, not me.  The average family of four in my area pays less property tax than me.  So, I'm not in favor of any additional funding for maternity / parental leave that comes from other workers, taxpayers, or employers.

Single people need to plan ahead and get married so they won't spend their entire life whining about relative tax burdens.
Title: Re: Social Insecurity and New Parents
Post by: fuzzy math on August 04, 2018, 06:14:22 PM
I'm not sure why so many child free people here hate on people who have children.

How much of this is people on the MMM forums in general and how much is specifically DreamFire?



therethere and J Boogie were doing a decent job before DreamFire showed up!!
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 04, 2018, 10:00:47 PM
Nice spin, but that totally misses the point I was making, that single people are being burdened with an unfair amount of the tax burden, and then it makes it even worse when you factor in that a single person uses far LESS public resources than a family of four.  For a household income of $70K/yr, I showed using a 2018 tax calculator that the federal income tax paid per household member was approximately 30X higher for the single person.

A family of four, with two children, has a low per-person-level of taxes paid? /pokerface

There's work to maintain a society. It includes children. You're not doing any of it, so you don't get the tax breaks. The calculation you're doing reveals a big scale because having kids in our society is very expensive - the "unfair amount" is not a point I missed, it's a point I disagreed with. Could the scale be smaller? I don't know, maybe - I wouldn't vote for it. Parenting is hard, single parenting is extremely hard, and I have no problem not getting big tax breaks for my no kids.

Have you calculated how much you pay in road maintenance? You could have a formula for how far anyone is allowed to drive (unfortunately, we're going to get rid of all the roads in, say, Montana, because those deadbeats don't pay anywhere near enough for those long, empty roads). Let's scrap any federal assistance - doesn't make sense for New York and California to pay for something in Mississippi. Doctors? I haven't gone to a doctor lately - med school subsidies will have to go. Disability is -out-. Someone inclined to do your math backwards may also point out we should double tax breaks for single parents, so they don't pay an unfair share compared to those takers in the two-earner households...

Wait, hmmm...
Title: Re: Social Insecurity and New Parents
Post by: jpdx on August 05, 2018, 12:06:47 AM
The US needs a national paid parental leave and universal preschool, but the Rubio proposal is just bad policy. Unlike readers of this forum, most Americans do not save sufficiently for retirement. This proposal would only exacerbate the retirement crisis.

On the other hand, our social security and medicare programs transfer a huge amount of wealth from the young to the old. In an ideal society, you'd do the opposite and invest in the future generations.
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 05, 2018, 01:38:43 AM
A national 401k would alleviate a lot of this stuff. Unfortunately, the financial lobby is hard against it. We don't have healthcare solutions that don't threaten businesses, and we don't have retirement solutions that don't threaten businesses. It's awfully hard to do something politically right now that can get painted as "anti-business" even if it's "pro-little-guy."

IIRC, California tried to do a state 401k system without the likes of the Edward Joneses, which is obviously really bad for the Edward Joneses, and it failed. That's the danger of "incremental improvement" I'm afraid of, really.

I'm more optimistic, though, for the next 10 years, because Schwab and Fidelity have been working on competing with Vanguard, so a better answer for a more comprehensive 401k system doesn't seem impossible. Just a little more down the road, if the fiduciary rules survive, we could eventually wind up with something like a reasonable 401k system, but Rubio's proposal for parents walks us a step away from a really good parental leave/retirement policy.

If only there were a Vanguard in the cable/internet arena!
Title: Re: Social Insecurity and New Parents
Post by: Adam Zapple on August 05, 2018, 05:14:19 AM
Do not want. I suspect this was designed as a clever form of welfare for businesses that could save even more money by giving up family leave policies.

If this became law, companies would then be free to cancel family leave policies without the same backlash as if they canceled those policies today. This option would effectively be fooling workers to accept a pay cut as a benefit, and accept that it's reasonable that family leave is so horrible in the US.

It deftly sweeps an overdue cultural reckoning neatly under the rug.

This is a great point that I did not think of.  Like any law, the devil is in the details, and without protections against this type of practice by employers, this is absolutely what will happen.  Also important is the "penalty" associated with using your SS benefit early.  My guess is this is a way to cut SS benefits incrementally, which is probably needed (in combination with increased contributions from somewhere) to shore up SS anyway.
Title: Re: Social Insecurity and New Parents
Post by: mm1970 on August 05, 2018, 05:26:54 PM
That term "subsidizing" is a little... ugly? Incomplete?

I would call it appropriate, and accurate, as the math shows.  As far as being incomplete, I have expanded on this in length in some of the previous threads on the topic.

Quote
You pay taxes to support your society because it's better for the whole society, which is the sum of all the kids people had over time, not just "what's happening today."

You "subsidize" because you were subsidized - you didn't agree to it, got to enjoy it anyway, and on to the next round.

No one was born in a log cabin they built themselves.

Nice spin, but that totally misses the point I was making, that single people are being burdened with an unfair amount of the tax burden, and then it makes it even worse when you factor in that a single person uses far LESS public resources than a family of four.  For a household income of $70K/yr, I showed using a 2018 tax calculator that the federal income tax paid per household member was approximately 30X higher for the single person.  Feel free to run the numbers yourself if you don't believe me.  Property tax is just more salt on the wound that pays mostly for schools and parks.  Taxpayer funded maternity leave I've heard people advocate for is just piling on.  Having kids shouldn't get you out of paying your fair share of taxes or for paying to support your own kids that you chose to have.

Again, I don't hate parents or kids, but I think there should be more fairness in the tax system and for people taking responsibility for their own kids.

Sigh, I used to be you.

1.  People with children were single once too.  And they paid more taxes when they were single.
2.  You are repaying society, in some respect, for your own childhood.  I had a friend of mine talk about how she should get a break on her prop taxes for not having children, and I laughed!  a. you went to the school in my neighborhood - you are repaying society for your own education and b. you already get a prop 13 discount.  (I didn't even have to get INTO the fact that it's good for society.  Which.  Duh.)
3.  OMFG people pay to raise their own fucking kids.  Do you want me to do the math for you?  While you are off in your $70k land enjoying what's left after taxes, let me tell ya about daycare, after school care, braces, summer camp, diapers, clothing, health insurance...and the list goes on.
4.  You are NOT doing your fair share by not having children.  This economy of ours thrives on having more people working more and paying more taxes.  How ya gonna collect social security if there aren't any workers to pay it?  You aren't. 

Anyway, our total federal tax bill last year was...hell, I dunno, $50k?  suck it.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 06:00:49 PM
Single people need to plan ahead and get married so they won't spend their entire life whining about relative tax burdens.

Or better yet, the government shouldn't be dictating choices by rewarding some and penalizing others.

There are some other things I would prefer to spend my money on, but instead of a tax break, I actually just end up paying even more taxes!
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 06:04:42 PM
I don’t love it, but it isn’t a terrible idea psychologically in the sense that people who don’t have children won’t be resentful of those that do, which I see all the time in my workplace.

Yes, it's pretty common for other reasons than the unfair taxation on those that don't have kids (and never will).  Personally, I don't feel resentful or hate to them at all, I just don't think those of us with no kids should have to subsidize them.  That's the difference.

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It’s too bad that people can’t be less petty and realize that people having children is good for everyone in the long run.  I feel like having children used to be more of a community responsibility and now is considered an individual choice.  Childless folks get the indirect benefits of those who do have kids and increasingly want to opt out of any responsibility.

It definitely is an individual's choice to have children, and if I wanted that responsibility I would have opted into it by having kids.  I have plenty of expenses unrelated to having kids, but I'm not asking anyone to subsidize those costs.
Title: Re: Social Insecurity and New Parents
Post by: Paul der Krake on August 05, 2018, 06:06:45 PM
DreamFIRE: seriously, quit whining and get a hobby. Federal government spending per capita is already above your federal tax burden. Your income isn't high enough to complain about subsidizing others, in terms of usefulness to the republic you're probably just in the the neutral zone, maybe a smidge above.

There are people on these boards who pay more in federal taxes than you earn, yet we don't hear them complain about subsidizing the rest of us who chose to be underachievers.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 06:23:55 PM
Nice spin, but that totally misses the point I was making, that single people are being burdened with an unfair amount of the tax burden, and then it makes it even worse when you factor in that a single person uses far LESS public resources than a family of four.  For a household income of $70K/yr, I showed using a 2018 tax calculator that the federal income tax paid per household member was approximately 30X higher for the single person.

A family of four, with two children, has a low per-person-level of taxes paid? /pokerface


Yes, the single woman with no kids pays over 30X as much per household member.  I have posted the math elsewhere.

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You're not doing any of it, so you don't get the tax breaks.

By not getting a tax break, it means I'm paying a lot more (such as the >30X amount in the example), therefore highly subsidizing others.  I have no argument that raising kids is expensive, but having kids is a choice, and if someone can't afford to raise their kids at their own cost, or at least pay their fair share of taxes, they shouldn't be having them.

Just because someone makes choices that are expensive shouldn't entitle them to bailouts by other taxpayers.  There are plenty of expensive things I could spend my money on, but rather than getting a bailout, I would just have to pay even more taxes.

Comments about road maintenance are unrelated to having kids.  But since you mentioned it, I would expect a family of four travels more miles on public roads in a given year than a single person, plus they use more of other public resources, such as the parks and schools I pay dearly for, despite never having kids.

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Someone inclined to do your math backwards may also point out we should double tax breaks for single parents, so they don't pay an unfair share compared to those takers in the two-earner households...

That's another issue.  A two earner household, or even a single earner household of a married couple, while MFJ, not only gets double the standard deduction of a single filer, the couple also pays taxes at a lower percentage up to a much higher income where the single person's tax increases to the next tax bracket at a much lower threshold.  So, there's a double benefit that.  Having kids on top of it really brings the tax burden down for MFJ.  So this extra tax burden is put on single people without kids the most.  Of course, if you give tax breaks to everyone, you need to increase taxes overall, so a better alternative might be to eliminate the tax code which benefits those making a particular choice.  It reminds me of tariffs that pick winners and losers.  Just give everyone the same tax treatment, not based on their choices as to whether they got married or had kids.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 06:35:50 PM
While you are off in your $70k land enjoying what's left after taxes

DreamFIRE: seriously, quit whining and get a hobby. Federal government spending per capita is already above your federal tax burden. Your income isn't high enough to complain about subsidizing others, in terms of usefulness to the republic you're probably just in the the neutral zone, maybe a smidge above.

There are people on these boards who pay more in federal taxes than you earn, yet we don't hear them complain about subsidizing the rest of us who chose to be underachievers.

Responding to those who have responded to me is not whining.  Duh.  And this is one of my hobbies.

You two seem to be confused and are making false assumptions.  The $70K/yr example I used was for a hypothetical woman vs. a hypothetical family of four.  I am neither.  I picked that income because both households actually paid taxes, so the numbers were all positive, and it made for a good comparison.

Personally, I have made six figures for years paying federal income taxes as a single person with no kids (check the tax tables), more than my fair share, well above the median, plus I live in a high property tax area paying several thousand dollars in property taxes per year for just me.  I wouldn't bother mentioning it, but just to set you straight on the false assumptions.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 06:39:03 PM
That's another issue.  A two earner household, or even a single earner household of a married couple, while MFJ, not only gets double the standard deduction of a single filer, the couple also pays taxes at a lower percentage up to a much higher income where the single person's tax increases to the next tax bracket at a much lower threshold.  So, there's a double benefit that.  Having kids on top of it really brings the tax burden down for MFJ.

Depending on the income level used in the simulation, marrying an able bodied but unemployed spouse gives people a much LARGER decrease in their taxes than supporting even 2-3 children. If your problem is specifically with people having children, wouldn't it be more accurate to compare either a single person to a single parent, or a married couple without children to a married couple with children?

If, alternatively, your main concern is just that some people pay less federal income tax than you while receiving the same household pretax income, then the main consolation I can offer is that in another ten years or less,* you'll be able to draw social security and income from qualified dividends and capital gains and pay dramatically lower federal income tax rates than the folks who are still working with the same pre-tax household income level as you yet paying a great deal more in income and payroll taxes to subsidize your retirement.

Some days you eat the bear and some days the bear eats you. It's not worth losing sleep over (or posting about over and over again in multiple forum threads).

*I don't know your exact age obviously, but I do know you have been very insistent in multiple threads that the full retirement age of social security be raised, but only for those more than ten years away from retirement, so I'm taking an educated guess.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 06:42:54 PM
Paying several thousand dollars a year in property taxes is nothing particularly exceptional for someone who owns a home. I own only a small house in a relatively low cost of living part of the country and even I can honestly claim to pay several thousand dollars a year in property taxes.

Also, I neither have children nor am I currently a child, yet I find I still visit and enjoy both city and state parks on a regular basis. I thus reject your assertion that the portion of my property taxes which go to maintain these amenities is a subsidy only for families with children.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 07:16:07 PM
That's another issue.  A two earner household, or even a single earner household of a married couple, while MFJ, not only gets double the standard deduction of a single filer, the couple also pays taxes at a lower percentage up to a much higher income where the single person's tax increases to the next tax bracket at a much lower threshold.  So, there's a double benefit that.  Having kids on top of it really brings the tax burden down for MFJ.

Depending on the income level used in the simulation, marrying an able bodied but unemployed spouse gives people a much LARGER decrease in their taxes than supporting even 2-3 children.

Yes, as expected based on the standard deduction and tax tables with double the threshold to the next bracket.

Quote
If your problem is specifically with people having children, wouldn't it be more accurate to compare either a single person to a single parent, or a married couple without children to a married couple with children?

I keep trying to make this clear, but I don't have a problem with people having children.  I'm just making some comments here about the fairness, or lack there-of, of the tax system in regards to families vs. single people.  That's why I compared those specifically.  I think the difference is most remarkable with that comparison as well.  If I look around, it's mostly married couples that have kids, not to say that there aren't many singles who have them as well.  I could post more comparisons for taxes paid in different scenarios, such as 1 vs. 2 kids, married vs. single parents, etc. but I'm trying to keep it brief.  It also gets more complicated when you start looking at lower incomes and EIC as well, which is why I chose the $70K figure.

Quote
then the main consolation I can offer is that in another ten years or less,* you'll be able to draw social security and income from qualified dividends and capital gains and pay dramatically lower federal income tax rates than the folks who are still working with the same pre-tax household income level as you yet paying a great deal more in income and payroll taxes to subsidize your retirement.

Just checked my FIRE planning spreadsheet, and it's 2034 for my SS, just over 16 years away for me.  I have mentioned that before, but after paying into it all these years, it's only fair that I get a distribution from the system when I'm eligible.  There will likely be cuts to benefits by then, but hopefully they won't be too excessive, and it helps secure a solid 100% in cFireSim and Rich, Broke, or Dead.  However, during the first 15 years of FIRE, I'm planning for $24/yr MAGI.  So, I'll actually still be paying more federal income tax than the family or couple making the same pre-tax household income as me, not that I'm complaining, at least I won't be paying so much myself at that point.

Quote
It's not worth losing sleep over (or posting about over and over again in multiple forum threads).

I can assure you that I'm not losing sleep over this.  I had a cup of coffee late this afternoon, so I might be affected by that.  I've had my whole life to adjust to this tax concept.  When I've brought it up, the traditional response is, "kids are expensive."  Yeah, a lot of things are expensive.  I bought an expensive house, and I ended up just paying more taxes!

I only bring this up in threads where it's relevant.  This thread was right on topic prior to me posting.  Most people aren't aware of the massive difference in tax burden between different households with the same income.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 07:25:47 PM
So just to clarify on the above comment, am I correct in my new understanding that you're okay with a significant raise in the FRA for SS prior to your eligibility? Because if so, good for you, I just want to avoid any chance at misunderstanding.

Most people aren't aware of the massive difference in tax burden between different households with the same income.

I find this statement implausible (at least among members of this forum).
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 07:27:48 PM
Paying several thousand dollars a year in property taxes is nothing particularly exceptional for someone who owns a home. I own only a small house in a relatively low cost of living part of the country and even I can honestly claim to pay several thousand dollars a year in property taxes.

The ironic thing is that I live in a LCOL area as far as home prices, but the property taxes are among the highest compared to the home value, which makes it a little more exceptional.  But the other point to the property tax comment is that a family of four living in my home would pay the same property tax.  It's not just about the parks, a large amount goes toward the schools as well.  Divide the property tax per home resident, and factor in who takes advantage of those taxpayer funded resources that most, and you should see where I'm coming from.  I'm not saying I shouldn't pay any property taxes, but this was just one piece of the total tax pie.

EDIT:  Corrected "owner" to "resident".
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 07:33:46 PM
...plus I'm paying high property taxes which mostly go towards the schools and parks, which families use, not me. 

I wasn't arguing with the school bit, but with the parks (which you specifically mentioned in a previous comment, as quoted above).
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 07:37:51 PM
...plus I'm paying high property taxes which mostly go towards the schools and parks, which families use, not me. 

I wasn't arguing with the school bit, but with the parks (which you specifically mentioned in a previous comment, as quoted above).

Yes, but since I am the one who brought it up in the first place, schools were part of my original point, and I wasn't going to drop it.  Well great, I'm glad you use your parks, but this isn't just about parks.  My original point and comments stand.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 07:47:59 PM
My main point here is that you you keep complaining specifically about tax breaks for kids, and then when we scratch the surface you're just lumping in tax breaks for anything that you don't qualify for (for example being married to a non-working spouse) and government expenditure on anything you don't personally take advantage of (for example city and state parks).

That's certainly a position you can take if you like. And you wouldn't be the only one to do so. But it is misleading to other readers of the thread to lump in all sorts of non-child related tax breaks and government spending together and present it as a single number that you claim supports your position that "people with kids get too many tax breaks."
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 07:48:11 PM
So just to clarify on the above comment, am I correct in my new understanding that you're okay with a significant raise in the FRA for SS prior to your eligibility? Because if so, good for you, I just want to avoid any chance at misunderstanding.

I support increasing the FRA only as part of a comprehensive approach, which includes not cutting benefit payments (although they are actually already being cut indirectly through the increased taxation over time, which should be addressed).  I think increasing the FRA a year per decade would be reasonable, but I wouldn't support it if that was the only change made.  I've also stated several times in the past that I wouldn't mind paying higher payroll taxes to help shore up SS and Medicare.  I've actually posted quite a few different ways SS could be shored up in the "social security won't go bankrupt" thread.

Most people aren't aware of the massive difference in tax burden between different households with the same income.

Quote
I find this statement implausible (at least among members of this forum).

Even >30X per household member comparing the two households in the example with $70K/yr income??  I find it very plausible, even among forum members who didn't specifically do the math or see it posted previously.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 07:53:33 PM
I find this statement implausible (at least among members of this forum).

Even >30X per household member comparing the two households in the example with $70K/yr income??  I find it very plausible, even among forum members who didn't specifically do the math or see it posted previously.

Well if you are correct, wouldn't you expect many people who be horrified and outraged when you present them with this number? How many supportive/surprised responses have you gotten in all the places you've posted your implausible math* around the forum?

*Using "taxes paid per household member" as your metric implies that you think the default fair breakdown is for a family of four to pay 4x as much income as a single person with the same income. Given that I am a single person and pay north of 25% of my total income in taxes, this would imply a family of four with the same income as me to pay >100% of their total income in taxes to meet the default "fair" metric that in inherent in the way you are comparing the numbers.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 07:59:34 PM
My main point here is that you you keep complaining specifically about tax breaks for kids, and then when we scratch the surface you're just lumping in tax breaks for anything that you don't qualify for (for example being married to a non-working spouse)

Actually, someone else brought the married couple having kids vs. a single parent.  I had never mentioned the single parent prior to that.  Only after that person mentioned it did  I state that was "another" problem.  That doesn't discount my original point based on the example I gave.

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and government expenditure on anything you don't personally take advantage of (for example city and state parks).

But if you put it into context, I included schools in that as well.  Plus, even for a single person who might use a park, it's very unlikely they will use it as much as a family of four, but their property tax will be just as high as the family of four.  And the single childless person won't be using the school at all, while again paying the full property tax that a family of four would pay on the same house.  Also remember, that was regarding the piling on of the property tax, which is well worth mentioning in this discussion, but you don't even have to include that in the discussion to see my original point about federal income tax burden between singles and families.

There's nothing misleading about that.  It might seem like it if you take one thing out of context, but if you factor in everything as whole, it's pretty clear.

By the way, simply making comments about the unfairness doesn't mean I'm complaining or will lose sleep over it.  I wouldn't be posting much on this if I wasn't for all of the replies I got, especially those that needed some clarification due to incorrect assumptions that had been made from others.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 08:05:47 PM
You were comparing a single person to a family of four with the same income (which confounds tax benefits for marrying a nonworking spouse and tax benefits for having children) before anyone brought single parents into the discussion. The history is right here in the thread.

So yes, it is a problem with your original post.

But if you put it into context, I included schools in that as well.

If A = 2 and B = 0 and you say "A + B = 5" that statement is false. You cannot turn around and say "well I was right about the value of A, but I decided to pretend the value of B was 3, so in context the statement was true."

Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 08:11:14 PM
I find this statement implausible (at least among members of this forum).

Even >30X per household member comparing the two households in the example with $70K/yr income??  I find it very plausible, even among forum members who didn't specifically do the math or see it posted previously.

Well if you are correct, wouldn't you expect many people who be horrified and outraged when you present them with this number? How many supportive/surprised responses have you gotten in all the places you've posted your implausible math* around the forum?
On this forum, how often do you see people admit to not knowing something like that?  I think people have a general idea due to things like child tax credits, but I think most people are surprised by the magnitude.  I doubt many people would take the time to double-check it and may just choose to disbelieve it if it doesn't fit their narrative.

Quote
*Using "taxes paid per household member" as your metric implies that you think the default fair breakdown is for a family of four to pay 4x as much income as a single person with the same income.

In reality, I've posted this a few times in the past where I have included both the absolute household tax differences without breaking it down per household member.  I only latee added the "per household member" metric to make a point because I don't think people would normally think about it that way, which makes the difference even more remarkable.  That's not to say I think the family of four should pay 4X the property tax or other taxes.  But, if both households were simply taxed based on total household income using the same tax bracket, I think that would be most fair.  Perhaps leave at least part of the child tax credit for low income families.  I wouldn't recommend taking it all away right away - maybe a gradual phase-out over some number of years, similarly to how I think SS phase-in/outs should be done.  I like to be fair.  :)
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 08:17:24 PM
You were comparing a single person to a family of four with the same income (which confounds tax benefits for marrying a nonworking spouse and tax benefits for having children) before anyone brought single parents into the discussion. The history is right here in the thread.

Ummm.... I explained why I compared singles to families here:

https://forum.mrmoneymustache.com/welcome-to-the-forum/social-insecurity-and-new-parents/msg2094999/#msg2094999

Someone else brought up single parents vs. married parents.  I had not mentioned them at all prior to that.

There is no problem with my original post.

But if you put it into context, I included schools in that as well.

Quote
If A = 2 and B = 0 and you say "A + B = 5" that statement is false.


That is a straw man argument.  You take one thing out of context because you happen to use a park from time to time as if that disproves my point, which actually includes much more than that.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 08:19:05 PM
But, if both households were simply taxed based on total household income using the same tax bracket, I think that would be most fair. 

Okay, if that is your baseline, then the appropriate comparison is either the percent or dollar difference in taxes paid between the two households. And since you're focused only on the effect of children, you should either compare a single person +/- kids, or a married couple +/- kids.

Using taxes paid per household member only works if you are arguing that either children should pay taxes even though they have no income, or that we should tax parents more than non-parents in order to make up for the taxes their children aren't paying. Since you now say you don't hold this position, using the "taxes paid per person within the household" comparison is both misleading and intellectually dishonest.

On this forum, how often do you see people admit to not knowing something like that?

One of the things I really like about this forum is how open (most) members are to acknowledging when they didn't know something or realize they were mistaken.

.... there are, of course, occasional exceptions....
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 08:24:49 PM
That is a straw man argument.  You take one thing out of context because you happen to use a park from time to time as if they proves my point, which includes much more than that, to be wrong.

There are two ways a piece of reasoning is wrong. One is when there is one big fatal flaw that, once you find it, the entire argument unravels. The other is lots and lots of small mistakes and biases and intentionally misleading ways of presenting data that, when put together end up with a strikingly false conclusion.

So far we've showing you're either incorrect or being intentionally misleading in the following ways:

-Using per capita taxes paid instead of per household taxes paid.
-Confounding tax breaks for getting married (which is off topic for the subject of this thread and can sometimes be quite large) with tax breaks for having children (relatively limited).
-Thinking adults without children don't derive significant benefit from parks and other public goods supported by property taxes.
-Thinking paying multiple thousands in property taxes makes you exceptional among homeowners.
Title: Re: Social Insecurity and New Parents
Post by: maizefolk on August 05, 2018, 08:27:03 PM
Well this has been fun and all, but it's starting to get late for me. I'm happy to drop back in tomorrow and address any other concerns you might have. In the meantime, since you've reiterated many times that you're not losing sleep over the tax code, I'll wish you a good night.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 08:34:04 PM
But, if both households were simply taxed based on total household income using the same tax bracket, I think that would be most fair. 

Okay, if that is your baseline, then the appropriate comparison is either the percent or dollar difference in taxes paid between the two households. And since you're focused only on the effect of children, you should either compare a single person +/- kids, or a married couple +/- kids.

Someone else brought this up, but it was not the basis of my discussion or for the example that I did the math on.  In my last post, I linked to the post where I expanded on my reasoning for comparing childless singles to families.

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Using taxes paid per household member only works if you are arguing that either children should pay taxes even though they have no income

I disagree.  I included that info because a family of four will use more taxpayer funded resources, so I simply provided a datapoint as to what the tax burden is when broken down per household member.  This is strictly for informative purposes, which may open up eyes on the issue for those that don't simply discount it because it doesn't fit their narrative.  But I've never stated that the family of four should actually pay 4X as much tax.  I think equal tax would be fine, and I have made the >7X tax burden in various previous posts on this matter in other threads, which is bad enough, so it's not like I'm hiding this information.  Simply providing more datapoints to show this unfair taxation isn't misleading or intellectually dishonest as I think I've been pretty clear by stating "per household member" or such when I've mentioned the 30X figure vs the 7X figure.  A misleading comment would simply have said the single household pays 30X as much taxes.

On this forum, how often do you see people admit to not knowing something like that?

Quote
One of the things I really like about this forum is how open (most) members are to acknowledging when they didn't know something or realize they were mistaken.

.... there are, of course, occasional exceptions....

Oh sure, sometimes that happens, but can you imagine if everyone posted to confirm that they didn't know something or hadn't heard a particular fact before?  Like I said, I think many people know in general that families have a lesser tax burden, but I happened to throw an example out there that shows just how significant it is.
Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 05, 2018, 08:36:49 PM
Well this has been fun and all, but it's starting to get late for me. I'm happy to drop back in tomorrow and address any other concerns you might have. In the meantime, since you've reiterated many times that you're not losing sleep over the tax code, I'll wish you a good night.

I already responded before I saw this post.  But sure thing.  I think we've beat this horse to death though, and some of the previous posters will probably want to rehash the same thing, so I think it's time to end this part of the overall discussion.  Good evening.
Title: Re: Social Insecurity and New Parents
Post by: J Boogie on August 06, 2018, 08:48:56 AM
I'm not sure why so many child free people here hate on people who have children.

How much of this is people on the MMM forums in general and how much is specifically DreamFire?




therethere and J Boogie were doing a decent job before DreamFire showed up!!

:)

I actually have a 2 year old and we're probably going to have 1 or 2 more.

I am all for families big and small, parks & schools and so on.

But I am all for budgeting items being kept in their appropriate buckets. Disability/illness does not belong with paid family leave.

I am in favor of both but the (usually) elective nature of having a child puts it in a different category.


To get back on the topic of pulling from individual SS early for parental leave, I have a question for those who argue this is simply to accommodate greedy corporations who should be footing this bill.

Is this argument driven more by disgust and contempt for greedy corporations, or a desire for all to have good parental leave?

I would repeat my argument that this is the wrong approach because it leaves contractors, freelancers, and small business employees once again screwed. They're already screwed on health insurance. It just reinforces the notion that to raise a family in America you have to work for a large bureaucracy.

Also, forcing employers to do things that cost them a lot of money per employee can seem like a viable solution when the economy is stellar. But it just increases the amount of layoffs during a recession.
Title: Re: Social Insecurity and New Parents
Post by: Gin1984 on August 06, 2018, 09:06:51 AM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?

Based on the fact that this only exists in 4 states, I would imagine there might not be enough support for a nation-wide policy.

I'll go further and argue that using the disability fund is inappropriate.  Relative to injury or illness, parenthood is often a choice, one that you are able to prepare for.  I'm happy to have less of my paycheck so that those who become sick or injured don't have deal with as harsh of a financial hardship. I'm happy also because that might be me or my loved ones at some point, so it gives me peace of mind. I don't see the justification, especially under this umbrella, for someone who chooses to have children.

I think it might make sense for the govt to financially incentivize having children if they are in a Japan like demographic crisis, but otherwise they should just let citizens do what they choose to do and like Rubio proposes give them the option to tap their social security early for special situations like this.
Giving birth is a medical event and causes a woman to need time off to recover, just like any other injury (except that we expect women to care for another while recovering and normally give care to others that are injured).  When my grandmother broke her hip, my mother took time off under FMLA to care for her.  That was a choice.  She still got FMLA time.  Giving birth put restrictions on me, including driving restrictions because it was major surgery.  The idea that it should not be treated as any other medical event flabbergasts me.
Title: Re: Social Insecurity and New Parents
Post by: J Boogie on August 06, 2018, 09:45:17 AM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?

Based on the fact that this only exists in 4 states, I would imagine there might not be enough support for a nation-wide policy.

I'll go further and argue that using the disability fund is inappropriate.  Relative to injury or illness, parenthood is often a choice, one that you are able to prepare for.  I'm happy to have less of my paycheck so that those who become sick or injured don't have deal with as harsh of a financial hardship. I'm happy also because that might be me or my loved ones at some point, so it gives me peace of mind. I don't see the justification, especially under this umbrella, for someone who chooses to have children.

I think it might make sense for the govt to financially incentivize having children if they are in a Japan like demographic crisis, but otherwise they should just let citizens do what they choose to do and like Rubio proposes give them the option to tap their social security early for special situations like this.
Giving birth is a medical event and causes a woman to need time off to recover, just like any other injury (except that we expect women to care for another while recovering and normally give care to others that are injured).  When my grandmother broke her hip, my mother took time off under FMLA to care for her.  That was a choice.  She still got FMLA time.  Giving birth put restrictions on me, including driving restrictions because it was major surgery.  The idea that it should not be treated as any other medical event flabbergasts me.

Sorry, I should clarify. Postpartum recovery should be covered using disability/illness funds. My wife had a C section as well so I am in complete agreement that a significant amount of time is required to recover. Even a best case scenario childbirth requires a decent amount of time.

Parental leave is different though in that fathers & adopting & lesbian parents can/should be able to partake, in many ways to be around for their partner who is both recovering and dealing the demands of caring for an infant. And the time period would ideally be longer than it takes to physically recover.
Title: Re: Social Insecurity and New Parents
Post by: Paul der Krake on August 06, 2018, 10:21:36 AM
I was curious to see where they got their "only 1 in 10 workers has paid parental leave" bit, and it's hard to get good data on this. Every employer does their thing, has different policies for employee class, gender, adoption, source of income, etc.

Paid can mean as little as 3 days at 50% normal income, or a cushy 3 month fully paid income replacement for both parents with counseling services, or anything in between.
Title: Re: Social Insecurity and New Parents
Post by: GreenGrapes on August 06, 2018, 10:26:20 AM
What about government employees who aren't covered under SS?  I work for a government and am covered under FMLA, but I have no access to paid leave.  If my SS retirement benefit will be 0, would I be SOL under this plan?  There must be a better way to deal with this issue.
Title: Re: Social Insecurity and New Parents
Post by: Paul der Krake on August 06, 2018, 10:29:40 AM
What about government employees who aren't covered under SS?  I work for a government and am covered under FMLA, but I have no access to paid leave.  If my SS retirement benefit will be 0, would I be SOL under this plan?  There must be a better way to deal with this issue.
Get your union on the case?
Title: Re: Social Insecurity and New Parents
Post by: therethere on August 06, 2018, 10:31:26 AM
Since I'm getting called out... No, I don't hate people who have kids. I'm don't have the pull to have one and parent them. I'm simply pointing out that it is a choice to have children or not. Presumably, the majority of children are a planned life change. I understand the need to bond. I empathize with those having to navigate taking care of a newborn at a time while they themselves are recovering. But right now there is already FMLA to cover that. It's not perfect but it is what it is. Should we as the US have something better? Sure. But personally I don't think encouraging people to delay SS to pay for a few weeks of time to me is a full answer. I also think that any solution that only covers "parental leave" is too specific. At the very least the requirements should be backed out to cover other FMLA events such as taking care of elderly family members.
Title: Re: Social Insecurity and New Parents
Post by: mm1970 on August 06, 2018, 11:41:29 AM
Paying several thousand dollars a year in property taxes is nothing particularly exceptional for someone who owns a home. I own only a small house in a relatively low cost of living part of the country and even I can honestly claim to pay several thousand dollars a year in property taxes.

The ironic thing is that I live in a LCOL area as far as home prices, but the property taxes are among the highest compared to the home value, which makes it a little more exceptional.  But the other point to the property tax comment is that a family of four living in my home would pay the same property tax.  It's not just about the parks, a large amount goes toward the schools as well.  Divide the property tax per home resident, and factor in who takes advantage of those taxpayer funded resources that most, and you should see where I'm coming from.  I'm not saying I shouldn't pay any property taxes, but this was just one piece of the total tax pie.

EDIT:  Corrected "owner" to "resident".

Some math, as it applies to my location.

Current $ spent to educate a child per year in our school district: $7500 (it's below median)
Multiply that times 13 years = $97,500

So that's a good baseline, on today's dollars, on how much was spent educating the typical adult today.

Now, let's assume that you own a home and pay property tax for 40 years.
That comes to $2437.50 per year, approximately - that would go towards repaying your K-12 education.

Now, approximately 48% of property taxes actually go to the schools (the rest are used elsewhere).  Therefore, a single individual, in order to fully repay society for their education, would need to pay property taxes of $5078 per year, for 40 years.

(for the record, our property taxes are between $6500-8500 a year, depending on how the market is doing).

Another way of looking at it locally is that the typical older homeowner, thanks to prop 13, pays much less than that.  So they would only repay society after about 50 years.  I suppose I'm happy to give them a discount after.

In general, I'm pretty fascinated by the "I got mine fuck you" attitude that some people have.  As long as you don't expect my children to subsidize your retirement (Medicare, SS)...
Title: Re: Social Insecurity and New Parents
Post by: Hargrove on August 06, 2018, 05:48:37 PM
To get back on the topic of pulling from individual SS early for parental leave, I have a question for those who argue this is simply to accommodate greedy corporations who should be footing this bill.

Is this argument driven more by disgust and contempt for greedy corporations, or a desire for all to have good parental leave?

Lack of leave is a problem solved by generating leave, not by cannibalizing another (not especially extravagant) benefit.

Businesses may very well lay-off more employees, who have better benefits, during a downturn. In that sense, they can "pass along the costs," so to speak. This argument is usually, for some reason, expected to stand on its own. But workers in that scenario can probably get rehired later with some benefits, in the world where that's something businesses are supposed to be offering. 

However, workers HAVE to pass on their costs. They stop buying things. They go bankrupt. It's not magically better for the economy to screw the worker and spare the business (or vice versa).

These scenarios aren't just about a survey on "evil megacorp or entitled citizen?" Both groups have plenty of self-interest. Society needs an equilibrium of those interests. It doesn't take a PhD to see a problem with the current equilibrium. One side winning IS the nightmare scenario. We can either fix the equilibrium because it's better policy, or we can fix it because eventually the pendulum swings too far and snaps back in the other direction. Rubio's proposal is not the "better policy" road.
Title: Re: Social Insecurity and New Parents
Post by: Prairie Stash on August 07, 2018, 09:15:47 AM
If I understand correctly, the Canadian system has no loss for the primary caregiver, and the American proposal does.
The American system is starting out where ours was many years ago. The system has evolved, it didn't start with all the bells and whistles. The largest hurdle is getting started, achieving perfection from the start is impossible. I think its better then the current mess you have, if you follow Canada it will also get better with time.

I get what you're saying. You may be right. But I'm less confident about incremental improvement. Incremental improvement sometimes cements weird or terrible decisions long-term, or just gets reversed every 4-8 years. Healthcare here is for rich people, and the incremental improvement got a hatchet job instead of continued improvement. Now rates and access to care are back to awful, and there's even less political will to do anything about it.
Valid concerns, in the real world the powers that be don't always adopt the best policies. I sometimes forget that myself, I still like to believe the world is led by rational people, sadly, thats hardly true.

Thats not to say that the USA might not take a different and better tact; something else Canada could import. With regards to healthcare, I like reading the American debates on it. On our side of the border, we use the evil USA system as a reason to keep our healthcare public; on your side our system is vilified. HIts a great set of opposing viewpoints.

The biggest obstacle Canada faced when Medicare was adopted provincially in the 60's was from the medical profession. They spent more on opposing it then the politicians did on their entire campaign to get elected. The reason; they feared they wouldn't earn as much as their American counterparts, the reining in of costs had to be stopped! Ultimately the propaganda failed and eventually Canada had Healthcare for all.

A very sad quote:
"The crudeness of the propaganda appears to have been based on the assumption that the Saskatchewan electorate was as unsophisticated as their American counterparts."
https://canadiandimension.com/articles/view/the-birth-of-medicare

The same can be said for any issue, often propaganda isn't in your own best interest. I'm sure I've been fooled in my lifetime as well.
Title: Re: Social Insecurity and New Parents
Post by: robartsd on August 07, 2018, 12:24:32 PM
I share the concern that the people who are most likely to use this benefit are the same people who are already under saving for retirement. Still, I think it is better than the status quo.

What about government employees who aren't covered under SS?  I work for a government and am covered under FMLA, but I have no access to paid leave.  If my SS retirement benefit will be 0, would I be SOL under this plan?  There must be a better way to deal with this issue.
I imagine that government workers who aren't covered by SS could probably negotiate a contract that works similarly against their government pension plan. Perhaps there should be a loophole that allows you to withdraw penalty free from other qualified retirement plans for family leave as well.

The law only requires unpaid leave. Employers can elect to allow employees to (or require them to) use accumulated paid leave/sick leave if the employer offers either of those benefits.

Since it's "elect" presumably an employer is not under a legal obligation to do so, no? But this is not my area of expertise.
I believe the employer is required to allow employees to use leave credits you may have available (and may elect to require employees to use them if they wish).

Another way of looking at it locally is that the typical older homeowner, thanks to prop 13, pays much less than that.  So they would only repay society after about 50 years.  I suppose I'm happy to give them a discount after.
I believe Prop 13 is unique to California.

That's another issue.  A two earner household, or even a single earner household of a married couple, while MFJ, not only gets double the standard deduction of a single filer, the couple also pays taxes at a lower percentage up to a much higher income where the single person's tax increases to the next tax bracket at a much lower threshold.  So, there's a double benefit that.
Divide the property tax per home resident, and factor in who takes advantage of those taxpayer funded resources that most, and you should see where I'm coming from.

Married filing joint has basically no benefit to a couple that each have equal incomes. Sure the standard deduction and tax bracket limits are double (except that the income limit for the second to highest bracket is significantly less than double) - but it's for two taxpayers not one. The primary advantage of married filling joint is that they can attribute half of all income to each spouse even when they have drastically different income levels - it's also nice to only have to file one return. There is a tax break for single parents (filing as head of household adds about 50% more space to the lower tax brackets) in addition to the tax benefits of having dependents.

You keep harping on "per person" taxes. If a family of four had a per person income has high as yours, they would be paying much more taxes per person than you would. For income tax it would be slightly more fair to compare the taxes per adult household member if you want to emphasize the difference between taxes paid by single people and taxes paid by families.

I know of no tax breaks for families regarding property taxes - everywhere I am aware property taxes are a pretty straightforward calculation based on the property itself, not the characteristics of the household that owns it. If you enjoy the luxury of a more expensive property than the average family of four in your area, I don't want to hear you whine about property taxes. Why don't you get yourself 3 roommates so your per person property tax will be more fair? (I apologize if the property tax structure in your area actually does give a break to households with children.)

Also, I neither have children nor am I currently a child, yet I find I still visit and enjoy both city and state parks on a regular basis. I thus reject your assertion that the portion of my property taxes which go to maintain these amenities is a subsidy only for families with children.
As someone without kids, I do sometimes resent playgrounds that prohibit adults who are not supervising children from playing on them.

Title: Re: Social Insecurity and New Parents
Post by: DreamFIRE on August 07, 2018, 03:57:28 PM
You keep harping on "per person" taxes.

I thought we were through with this discussion, but since you responded and apparently missed my earlier clarification, I will provide a more concise follow-up, which I hope clears it up.

First, I'm framing this as a single childless woman and a family of four with the SAME HOUSEHOLD income and the federal income taxes paid using the standard 2018 tax tables.  That's the starting point.  If you're wanting to compare different household incomes or single parents (you mentioned both), that's a completely different argument that I am not interested in.  You can also DISREGARD the "per person tax" to show the same problem.  I have provided total tax as well as "per person" previously in this thread and others, but it appears some may have only noticed the "per person" amounts, so here again is the full comparison with only the "household" incomes and "household" federal income taxes.

Household income of single woman with no kids $70,000
Total federal income tax $8700

Household income of married couple with 2 kids $70,000
Total federal income tax $1139

The single woman household pays over 7 1/2 times as much tax in this example.  She is subsidizing the family with kids by paying many more times in federal income taxes despite the family utilizing far more $ in public resources.

In this example, you will note that I didn't even bother to include the even lower amount of tax when divided out per household member.  Simply look at the total tax paid per household with the SAME household income.

Hopefully that clears up any confusion.
Title: Re: Social Insecurity and New Parents
Post by: robartsd on August 09, 2018, 08:53:03 AM
You keep harping on "per person" taxes.
In this example, you will note that I didn't even bother to include the even lower amount of tax when divided out per household member.
I'm not arguing that there are major flaws with your last example. A family of four pays quite a bit less taxes than a single person with the same household income. Your insistence that it is somehow fair to compare household income and per person taxes (that you still imply in your last post) is what I have a problem with. I could just as easily make an argument about after tax money per person to make a silly argument that single people aren't taxed nearly enough: per person the single person keeps $61,300, while the family only has $17,215.25 per person - so the single person gets to keep 3.5 times as much of her income. The point is if you want to compare household incomes, you really ought to keep it to household taxes instead of your silly "per person" tax.

The reality is that our tax structure is such that people with high "per person" income pay the largest amount of taxes. Many people feel this is fair (even many of those highly taxed individuals).

Married without kids, $70,000 income: federal income tax $5,139 (the couple with kids in your example only had a tax reduction of $2,000 per kid).

Married without kids, $140,000 income: federal income tax $17,399 (rounding error causes the single person to pay $0.50 more per person than married couple with equal per person income).

Married with 2 kids, $140,000 income: federal income tax $13,399 (still just $2000 per kid reduction).

Married with 2 kids: $280,000 income: federal income tax $46,289. (same per-person income as a single person with $70,000 income, 33% more per-person taxes).

Bottom like is that you subsidize just about everyone who has lower per person income with your taxes regardless of how their household is made up (thank you). Your high taxes are not primarily about subsidizing families.

Title: Re: Social Insecurity and New Parents
Post by: CindyBS on August 10, 2018, 04:29:48 PM
I don't see any reason why people should have to pull from their future social security benefits to fund their parental leave. In California and other states, paid family leave is paid for through the state's short term disability fund. Employers do not pay for it. It is entirely funded by employees. As a worker, a portion of your taxes from your paycheck are already going toward short term disability insurance (SDI) anyway, whether you ever use it or not. With paid family leave, you can access short term disability benefits for up to six weeks to care for a seriously ill family member or to bond with a new child. It seems to work well in the states that have implemented this approach. Why not just make it a nation-wide policy?

Based on the fact that this only exists in 4 states, I would imagine there might not be enough support for a nation-wide policy.

I'll go further and argue that using the disability fund is inappropriate.  Relative to injury or illness, parenthood is often a choice, one that you are able to prepare for.  I'm happy to have less of my paycheck so that those who become sick or injured don't have deal with as harsh of a financial hardship. I'm happy also because that might be me or my loved ones at some point, so it gives me peace of mind. I don't see the justification, especially under this umbrella, for someone who chooses to have children.

I think it might make sense for the govt to financially incentivize having children if they are in a Japan like demographic crisis, but otherwise they should just let citizens do what they choose to do and like Rubio proposes give them the option to tap their social security early for special situations like this.
Giving birth is a medical event and causes a woman to need time off to recover, just like any other injury (except that we expect women to care for another while recovering and normally give care to others that are injured).  When my grandmother broke her hip, my mother took time off under FMLA to care for her.  That was a choice.  She still got FMLA time.  Giving birth put restrictions on me, including driving restrictions because it was major surgery.  The idea that it should not be treated as any other medical event flabbergasts me.

Sorry, I should clarify. Postpartum recovery should be covered using disability/illness funds. My wife had a C section as well so I am in complete agreement that a significant amount of time is required to recover. Even a best case scenario childbirth requires a decent amount of time.

Parental leave is different though in that fathers & adopting & lesbian parents can/should be able to partake, in many ways to be around for their partner who is both recovering and dealing the demands of caring for an infant. And the time period would ideally be longer than it takes to physically recover.

Parental leave is not just for having a baby or being a dad home to care for infants.  Two years ago, my 13 year old got cancer - definitely not planned or a choice.  I was not eligible for FMLA because I was short 100 hours of the number of hours you have to had worked in the previous 12 months.  I did get 1 year unpaid leave, though, b/c of a union contract.  My DH went on intermittent FMLA and has been for the past few years. 

I would argue that parental leave should be expanded to mean all the categories that FMLA covers - parents, siblings, etc. As seniors are living longer, short leaves from work to care for elderly parents will become more common.  Most civilized industrialized countries pay for this out of a fund similar to the unemployment system in the US and it could be implemented here to cover all workers.  It is funny that in the US we have no problem covering some of your income through federal programs if you are disabled, you get laid off, you retire, you die before your children are adults, but if you lost your income because you are caring for someone who is sick or disabled - nothing.  (some SSI in limited circumstances)