View Poll Results: Your Identity and For/Against this SS Reform model

Voters
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  • Socialist and Against

    10 10.99%
  • Socialist and For

    1 1.10%
  • Democrat and Against

    21 23.08%
  • Democrat and For

    6 6.59%
  • Republican and Against

    2 2.20%
  • Republican and For

    22 24.18%
  • Libertarian and Against

    9 9.89%
  • Liberarian and For

    9 9.89%
  • I am for it, but with a particular modification (explain)

    11 12.09%
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Thread: Social Security Fix

  1. #51
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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    given that it is de facto part of the General Fund now, i don't see what we're going to gain in trying to move it back. that horse has already escaped the barn; and we must deal with what we have now.
    So, could we just isolate it somehow and pay back the money that has been taken from it for the past 40+ years, or is the country so bankrupt now that we can no longer pay our obligations?
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  2. #52
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    Re: Social Security Fix

    from cpwill

    1. this leaves the working poor in their current less advantageous position than they would see under privatized accounts. those numbers don't lie: allowing wokers to divert a portion of their SS to privatized accounts which grow tax free is an incredible tool in giving them financial independence.

    I see no such thing. It is the working poor who have the most to gain from a revitalized SS system with hundreds of billions in new contributions gained from popping the cap on income over $106K. Ask them and see how they feel about it. It does not take much to find lots of public surveys to show the public supports this idea.

    Americans Look to Wealthy to Help Save Social Security

    Social Security 75th Anniversary Survey Report: Public Opinion Trends


    2. i sincerely doubt that it would produce solvency for social security, merely to lift the cap.
    There is no doubt that it would and studies show this. All you need to do is pop the cap and freeze beneift levels to the max today plus inflation and its good as gold for another 70+ years. This is dollars and cents and nothing beyond that.
    3. there is plenty of evidence, in fact, to suggest that the additional funds raised by lifting the cap would be - at best - muted
    I know of none. Lets see it.
    Last edited by haymarket; 02-27-11 at 01:03 PM.
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  3. #53
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    Re: Social Security Fix

    Quote Originally Posted by Dittohead not! View Post
    So, could we just isolate it somehow and pay back the money that has been taken from it for the past 40+ years, or is the country so bankrupt now that we can no longer pay our obligations?
    generally speaking the latter. the program would be open to all; but practically the older you are, the less benefit you would see from it. in addition, the rate of growth in benefits will probably have to be slowed at some point, along with some potential means-testing.

    but even if we were debt free (we are most definitely not), we wouldn't have enough to cover our liabilities.

  4. #54
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    Re: Social Security Fix

    Quote Originally Posted by haymarket View Post
    I see no such thing. It is the working poor who have the most to gain from a revitalized SS system with hundreds of billions in new contributions gained from popping the cap on income over $106K. Ask them and see how they feel about it. It does not take much to find lots of public surveys to show the public supports this idea.
    it's highly doubtful we would see those hundreds of billions. as i have shown you several times already; revenues tend to hover around 18-19% of GDP. hike someone's rates, and you merely give them greater incentive to protect or alter their income. as for what system the working poor would benefit most from; in my example the man in question (i assumed he remained single; obviously if he had a wife who worked ever at all this turns out much better for them) never earned more than $32,000, even in his peak earning years, and in a worst case scenario my plan still returned to him twice the average Social Security allotment (the amount he would have recieved under the old plan, of course, would have been less than average).

    at no additional cost to him. whereas raising taxes tends to harm economic growth (and thus harm the poor who can least afford the loss more); this plan creates a great engine of economic growth; which will in turn raise their standard of living.

    I know of none. Lets see it.
    The chart below shows the percentage share of U.S. GDP represented by personal income taxes collected by the U.S. government from 1946 through 2006: ...



    Analyzing the data presented on this chart, we make the following observations:

    1. The average percentage of GDP represented by U.S. federal personal income tax revenues from 1946 through 2006 is 8.0%. The percentage share of personal income tax revenues with respect to GDP is normally distributed, with a standard deviation of 0.8%. This defines the typical range for the personal income tax share of GDP of 7.2% to 8.8%.

    2. Recessions (shown by the vertical red bands) often coincide with decreased revenue for the federal government from personal income taxes. This is exactly what we should expect to see, as the total level of income earned falls with employment levels during recessions.

    3. There are unique circumstances that coincide with percentage shares greater than 8.8%:

    * In 1968, the Democratic U.S. Congress and President Lyndon Johnson passed a 10% income surtax that took effect in mid-year. Coupled with a spike in inflation, for which personal income taxes were not adjusted to compensate, this tax hike led to outsize income tax collections in that year.

    * The sustained high inflation of 1978 (7.62%), 1979 (11.22%), 1980 (13.58%) and 1981 (10.35%) led to higher tax collections through bracket creep, as income tax brackets in the U.S. were not adjusted for inflation until 1985 as part of President Ronald Reagan's first term Economic Recovery Tax Act.

    * Beginning in April 1997, the Dot Com Stock Market Bubble created an excessive number of new millionaires as investors swarmed to participate in Internet and "tech" company initial public offerings or private capital ventures, which in turn, inflated personal income tax collections. Unfortunately, like the vaporware produced by many of the companies that sprang up to exploit the investor buying frenzy, the illusion of prosperity could not be sustained and tax collections crashed with the incomes of the Internet titans in the bursting of the bubble, leading to the recession that followed.

    4. Unique circumstances also apply to the one period in which the percentage share of personal income taxes dipped below the lower level of 7.2%.

    * The recession of 1948 is generally considered to be an "inventory recession." Here, inventories soared as consumers had initially satisfied their pent-up demand for consumer products following the end of World War 2, as companies of the era lacked sufficient feedback to be able to better meter their production levels. The rate of unemployment doubled from 1948's level to 7.9% in October 1949, which in turn, sharply decreased personal income tax collections.

    * This surplus of inventory came at a time when many large companies completed their full transition from wartime employment levels to "peacetime" levels, which aggravated the employment situation.

    5. Years in which tax rate cuts took effect (1964, 1970, 1971, 1982, 1987, 1988, 1991 and 2003) all saw government collections of personal income taxes dip initially, then begin to rise afterward, with the total of personal income tax collections always falling in the range between 7.2% and 8.8% of GDP.

    This last phenomenon suggests that the distribution of taxable income shifts in accordance with changes in the tax rate structure of the income tax code to maintain a stable equilibrium with respect to overall GDP, albeit with a small lagging effect. This level of equilibrium is given by a level of personal income tax collections representing 8.0% of GDP, plus or minus 0.8%, which holds in the absence of unique economic and fiscal policy factors.

    Basically, this means that as tax rates change, people shift their level of economic production to account for the change in the tax rate structure, and do so in a way that maintains this overall level of equilibrium.

    In the case of a steeply progressive tax rate structure, people act to reduce their economic output (and income) or channel it in ways so as to avoid the increased level of taxation through personal income taxes. In the case of a flatter tax rate structure, people act to increase their economic output and income, dispense with tax avoidance strategies, and personal income tax collections rise in the years following when the tax rate reduction is first implemented to levels consistent with the natural level of equilibrium.

    Where the economy is concerned, higher, more progressive tax rates would result in both lower levels of GDP and personal income tax collections, while lower, flatter tax rates would result in higher levels of GDP and personal income tax collections...


    We confirm that beginning in 1964, with the first of a series of income tax rate reductions, personal income tax collections have risen at a much faster pace than they did under the highly progressive income tax rate structure that existed from 1946 through 1963, even after adjusting for inflation.

    We'll revisit this latter chart in the future, but for now, we'll observe that regardless of what it might hope to achieve from changing the schedule of tax rates, the government isn't going to get much more than 8.0% +/- 0.8% of the pie called GDP for the effort. The real question is whether it will be 7.2%-8.8% of a growing pie that incents people to be more productive or 7.2%-8.8% of a stagnant or shrinking pie that incents people to become really good at dodging personal income taxes, or just taking it easier....



    or point out that



    taxes tend to hover around 18% of GDP; only once in the past 50 years has it even gone over 20% (hilariously, while Bush was President). Bush tax cuts of 2003 led to an increase in revenues, and it wasn't until the current Recession that we see a drop to 15%.

    in the 1950's and 1960's, tax rates on high income earners were (comparatively) sky-high; yet they brought in no more revenue as a share of GDP. why?

    because people seek to avoid exposing their income to taxes.

    assuming you aren't in the middle of a market crash who's recovery has been stalled by foolish government intervention (ie: us right now), you are going to get about 18-19% of GDP in tax revenue.
    Last edited by cpwill; 02-28-11 at 07:42 AM.

  5. #55
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    Re: Social Security Fix

    CP: You fail to factor in time. HS grad Joe is going to get ~ $6,599/month when he retires at the age of 68. The problem is that Joe is only 20 at this time. 48 years from now, Joe isn't going to be able to feed himself cat food on that retirement amount. The cost of living (which SS takes into consideration) is going to mean that a Snickers candy bar is going to cost $6.50 in 2059. Poor, poor Joe. He should have stuck with the government program.
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  6. #56
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    Re: Social Security Fix

    Quote Originally Posted by Mickey Shane View Post
    CP: You fail to factor in time. HS grad Joe is going to get ~ $6,599/month when he retires at the age of 68. The problem is that Joe is only 20 at this time. 48 years from now, Joe isn't going to be able to feed himself cat food on that retirement amount. The cost of living (which SS takes into consideration) is going to mean that a Snickers candy bar is going to cost $6.50 in 2059. Poor, poor Joe. He should have stuck with the government program.
    actually those figures are inflation-adjusted.

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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    actually those figures are inflation-adjusted.
    Then it's pretty obvious that your plan would not work.
    Quote Originally Posted by Northern Light View Post
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  8. #58
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    Re: Social Security Fix

    Privatize it, there is no reason why the government needs to be the parent of SS.
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  9. #59
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    Re: Social Security Fix

    I'm neither of the options above. I support social security, but I also support an individuals option to opt out of social security and have theirs privatized or not send money anywhere at all. However, if they opt out of social security they will also not receive those benefits.
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  10. #60
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    Re: Social Security Fix

    All you have to do is three things

    1- pop the current $106K cap on taxing income for FICA
    2- freeze benefits at the current level plus inflation
    3- have serious penalties for those who attempt to cheat their way out of their legal FICA obligation so that very few would risk it

    Problem solved for at least the next seven decades.
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