Should We Redesign Payroll Taxes?

[phattonez]

Solid concur. The purpose of Social Security is supposed to be to offer some means of protection for our elderly to help them avoid poverty.

We need to flatten government-provided direct benefits, really, increasing the payouts to the bottom-income-earners and decreasing payouts to the upper-income earners. President Obama's Simpson-Bowles Commission proposed just such an alteration.



More broadly, per your idea of taxing capital-gains and all income for FICA purposes: I would be willing to trade this in return for shifting Social Security into private investment, IRA-like accounts that are owned by the individual, with government guaranteeing a minimum benefit that looks like that flattened rate. If it's just "Hey, let's discourage savings and investment and hope that works to generate more money over the long haul", then... no.

I worry about moving to self-directed accounts versus having a strictly defined pension. I mean if people want to take the risks then go ahead, but what about those who want a small but guaranteed return?

 

[phattonez]

Investments aren't taxed for a few reasons. there is a reason why capital gains is less than income tax as well. My proposal for FICA, is to give the employees more in pay and then make the employees pay the full cost, so they see it. Call it a social tax instead of FICA. Then raise or lower it as needed to cover social spending.

Lets see how fast liberals are then to demand more social spending...

Those reasons aren't good.

 

[phattonez]

There is truly a misconception on the Payroll taxes which was a forced contribution created to as you said fund SS and Medicare. The problem is not the tax itself but the use of the taxes as that tax was put on budget by LBJ and is now part of the unified budget where every dollar is treated the same way and can be spent on whatever the bureaucrats want to spend it on. that is the problem and why we have an unfunded liability now as the Congress used the funds to pay for whatever they wanted starting with the Vietnam War.

Millions of Americans already don't receive SS and Medicare thus don't contribute but the vast majority do and although I have never supported FORCED contributions I do understand their purpose. SS was designed to be a retirement SUPPLEMENT not sole retirement but over the years it has become sole retirement for so many and is truly a very poor return on one's investment as a simple savings account, untouchable would be better. Why only charge the wealthy? You will never generate the funding for the masses.

No one has proposed only charging the wealthy.

 

[ttwtt78640]

It absolutely is when you look at ultimately how much you collect, how much you put in, and compare those results to the stock market, or real estate.

SS is a pay as you go system - not an investment account under your SSN. We certainly do not want the federal government buying (picking?) stocks or getting into real estate investment.

 

[phattonez]

Im confused here. You seem to be saying that we should take more from the rich because its unfair that they have money left over to then invest in something better than SS? Isnt that the whole point of getting rich? Or is this satirical?

I have no problem with the rich having more money (assuming that they worked for it and it's not just unearned income). What I have a problem with is a regressive tax, which is exactly what payroll taxes become at upper income levels.

 

[phattonez]

SS is a pay as you go system - not an investment account under your SSN. We certainly do not want the federal government buying (picking?) stocks or getting into real estate investment.

Nor do I, but my point is that people could be earning more money if they had it to themselves, instead they're forced to pay into SS. It's not necessarily bad, but it is when you get to keep more of that money if your income is high enough. It's the regressive nature of the tax that I'm opposed to.

 

[ttwtt78640]

Nor do I, but my point is that people could be earning more money if they had it to themselves, instead they're forced to pay into SS. It's not necessarily bad, but it is when you get to keep more of that money if your income is high enough. It's the regressive nature of the tax that I'm opposed to.

You should read up on why SS was invented/implemented. Things were not all rosy with old folks living high on the hog with their private investment accounts prior to SS.

 

[phattonez]

You should read up on why SS was invented/implemented. Things were not all rosy with old folks living high on the hog with their private investment accounts prior to SS.

I'm not talking about doing away with social security. What I'm saying is that we have to have an equitable system. The thing is that people long term make a lot more money with private investments, and so over the long run we're facilitating a wealth transfer from poor to rich. We can fix that simply by having everyone contribute commensurate with their income, not by our current regressive scheme.

 

[ttwtt78640]

I'm not talking about doing away with social security. What I'm saying is that we have to have an equitable system. The thing is that people long term make a lot more money with private investments, and so over the long run we're facilitating a wealth transfer from poor to rich. We can fix that simply by having everyone contribute commensurate with their income, not by our current regressive scheme.

You simply want to tax the rich more - and I get that clearly. The basis of SS benefit levels is SS contribution levels yet you want to cap only the SS benefits (to screw the rich more?). If that is your goal then simply use federal income tax revenue instead of a payroll tax to fund a new (replacement?) income redistribution retirement system.

 

[phattonez]

You simply want to tax the rich more - and I get that clearly. The basis of SS benefit levels is SS contribution levels yet you want to cap only the SS benefits (to screw the rich more?). If that is your goal then simply use federal income tax revenue instead of a payroll tax to fund a new (replacement?) income redistribution retirement system.

It's not that. I want everyone to contribute to a social welfare program. I see no reason why the rich should be exempted. They don't collect food stamps either, but they still have to pay for that. Why should SS be any different?

 

[ttwtt78640]

It's not that. I want everyone to contribute to a social welfare program. I see no reason why the rich should be exempted. They don't collect food stamps either, but they still have to pay for that. Why should SS be any different?

Because the law says so and would likely not have passed otherwise.

 

[phattonez]

Because the law says so and would likely not have passed otherwise.

Because as we've agreed before, the financial elite own this government.

Sent from my HTC phone. Instaurare omnia in Christo.

 

[ttwtt78640]

Because as we've agreed before, the financial elite own this government.

Sent from my HTC phone. Instaurare omnia in Christo.

Yep, that tiny minority has the vast majority electing those that they allow us to choose among. That, not some funding details of a social program, is what needs changing.

 

[Neomalthusian]

You should read up on why SS was invented/implemented. Things were not all rosy with old folks living high on the hog with their private investment accounts prior to SS.

But relatively speaking, now they are pretty rosy for old folks (as a group), because those who worked from the 1950s through 2000s were often able to stash money into private investment accounts while also becoming eligible for indefinite pension benefits while also getting the SS and Medicare benefits. The pendulum has swung too far in the other direction now, with senior poverty dropping by something like two-thirds over the last 50 years while working-age poverty has about doubled.

That is a really unequal development between the age groups, and that's not even taking into account the unfunded liabilities associated with pensions that the increasingly impoverished younger generations are (under current law) required to absorb on top of their education debt and health care costs and no savings and no pensions.

 

[Conservative]

Do you have as version of Mr. Peabody's Way Back Machine so you can travel in time and change what you claim LBJ did? If you don't, its all water under the bridge and means nothing to honoring our commitments today and in the future.

So you can justify that a Democratic President took Payroll taxes created to fund SS and Medicare and used the money to fund the Vietnam War by creating the Unified Budget? What a shock and what a hypocrite! Typical liberal, create a fund for one thing and spend it on another then run out of money and bilk the taxpayers out of more tax dollars. This is why the radical left should never be allowed near the Tax dollars any more

 

[Conservative]

No one has proposed only charging the wealthy.

Then you haven't been paying any attention

 

[haymarket]

So you can justify that a Democratic President took Payroll taxes created to fund SS and Medicare and used the money to fund the Vietnam War by creating the Unified Budget? What a shock and what a hypocrite! Typical liberal, create a fund for one thing and spend it on another then run out of money and bilk the taxpayers out of more tax dollars. This is why the radical left should never be allowed near the Tax dollars any more

I never commented on your obsession other than to say that this is in the past and there is nothing now that changes that so get over your fixation with this event in history. All I have told you is that there is plenty of money to pay our obligations in Social Security to the American people.

 

[Conservative]

I never commented on your obsession other than to say that this is in the past and there is nothing now that changes that so get over your fixation with this event in history. All I have told you is that there is plenty of money to pay our obligations in Social Security to the American people.

No that isn't the past that is proof that when you give the federal govt. money they do with it as they see fit and whatever they want. Setting up a tax for one thing and spending it on another something you don't seem to have any concerns about which shows your true character. You claim there is plenty of money to pay our obligations because that is what you want to believe and have been told, you are wrong, completely and totally wrong but that is do to your indoctrination into the failed ideology that you support

Would love to learn why you continue to believe what the left tells you?

https://www.washingtontimes.com/news/2010/mar/16/social-security-ious-stashed-away-in-wva/

https://www.ssa.gov/history/BudgetTreatment.html

In early 1968 President Lyndon Johnson made a change in the budget presentationby including Social Security and all other trust funds in a"unifiedbudget." This is likewise sometimes described by saying that SocialSecurity was placed "on-budget."

 

[cpwill]

How significant are those benefits compared to capital gains?

:shrug: I would say it depends on the individual. Regardless, merely taxing capital gains is not "treating all income equally". It is simply "deciding to increase taxes on certain kinds of income".

I worry about moving to self-directed accounts versus having a strictly defined pension. I mean if people want to take the risks then go ahead, but what about those who want a small but guaranteed return?

This side of Christ, there is no such thing. There are more and less likely returns of varying degrees, but pensions are hardly guaranteed, and, inasmuch as the structure represents promises on the part of others to pay tomorrow, if anything, they seem systematically less likely than the self-directed accounts to prove reliable. A self-directed account might get you an inflation-adjusted 5% or 6% or 7% over the long-haul, but regardless of the return, it's yours. A pension is under the control of others, and we are in the middle of realizing what a terrible structure that can be. Localities, States, Companies, all of them, massive underfunded pensions, and it's going to be the pensioners who have to take the hit. A pension isn't taking a small but guaranteed return, it's just putting your trust in the pension-holder to take care of you. It's worth noting that, in comparison to the Social Security program - while nothing is guaranteed - the very strong likelihood is that you will get much higher returns on an individually directed account than from SS (laid out in the link).

 

[haymarket]

No that isn't the past that is proof that when you give the federal govt. money they do with it as they see fit and whatever they want. Setting up a tax for one thing and spending it on another something you don't seem to have any concerns about which shows your true character. You claim there is plenty of money to pay our obligations because that is what you want to believe and have been told, you are wrong, completely and totally wrong but that is do to your indoctrination into the failed ideology that you support

Would love to learn why you continue to believe what the left tells you?

https://www.washingtontimes.com/news/2010/mar/16/social-security-ious-stashed-away-in-wva/

https://www.ssa.gov/history/BudgetTreatment.html

Sp please tell me in which year will the government NOT have the money to pay promisedSS benefits to those who have earned them?

 

[Conservative]

Sp please tell me in which year will the government NOT have the money to pay promisedSS benefits to those who have earned them?

The year they stop printing and/or borrowing money

 

[haymarket]

The year they stop printing and/or borrowing money

That is not an answer - it is a wise guy quip which pretends that we will stop doing business as we have for the past century. That is delusional to assume that.

 

[Conservative]

That is not an answer - it is a wise guy quip which pretends that we will stop doing business as we have for the past century. That is delusional to assume that.

That is exactly the answer and the right one, you are too indoctrinated to get it. Do you know what debt service is? Where did that line item come from? You taught civics? OMG!!

 

[haymarket]

That is exactly the answer and the right one, you are too indoctrinated to get it. Do you know what debt service is? Where did that line item come from? You taught civics? OMG!!

Based on the way we do business today and the way we have done business for the last century and without any major changes, in what year will we NOT have enough money to pay promised SS benefits to those who have earned them? You cannot answer and you won't answer because you are not intellectually honest.

Every time I get in these exchanges with you I eventually remember how you quickly you get personal and petty and outright pissy you get making personal remarks about me and things you have not the slightest idea what your ass is talking about. Glad it came early in this exchange.

Its your stage. Enjoy your solo act.

 

[molten_dragon]

Get rid of payroll taxes. Get rid of tax brackets. Get rid of all of the special loopholes, credits, and deductions. Get rid of all special treatment for various forms of income.

Replace the whole mess with flat-rate tax on all sources of income, with a single cost-of-living deduction.