Should We Redesign Payroll Taxes?

[Conservative]

I think you missed the windmill on the next lane over. Its still going round and round and is just crying out for you on your valiant charger.

No, didn't miss it at all, you have been on it for years now and it is time to get off and realize that being on that merry go round doesn't get you anywhere just like liberalism. No answer to the questions posed, what a surprise! NOT

 

[Conservative]

The checks are printed and the checks are distributed and the checks cash at the bank and the retirees enjoy the benefits promised to them. That is a grand slam home run for the American people.

Yep, so you have no problem with your Govt. collecting Payroll taxes to fund SS and Medicare but using that money to fund things like the Vietnam War and other operating expenses of the Federal Govt.? What a hypocrite! A Grand slam?? No wonder you need liberalism to support you

 

[haymarket]

What you're describing (increasing taxes and freezing benefits) is not a "tweak" or a "tune-up," it's a fundamental conversion of the program into a means- and needs-based income security program instead of a pension-style program. If it's necessary to make the program less of a pension-style program, it means the pension-nature of the program does not "work very well."

Look at states whose public pensions are in horrible funded status that have as a result eliminated defined benefits and created new tiers that are defined-contribution for all future participants. Pensions worked horribly there, hence they are being phased out altogether. That's not a "tweak" to keep pensions "working well," it's an acknowledgement that pensions didn't work at all and cannot work and therefore need to be replaced with something that isn't a pension.

The program has worked great since the Thirties and will continue as long as we have the national will to do it. All I am suggesting is a small change - today 94% of workers are FICA taxed on 100% of their earnings. I simply want to expand that to the other 6%.

Pensions work great. Tens of millions of Americans can testify to that every month. Just ask the AARP.

 

[haymarket]

No, didn't miss it at all, you have been on it for years now and it is time to get off and realize that being on that merry go round doesn't get you anywhere just like liberalism. No answer to the questions posed, what a surprise! NOT

Apparently that windmill you were titling at hooked you and now you are going round and round.

 

[haymarket]

Yep, so you have no problem with your Govt. collecting Payroll taxes to fund SS and Medicare but using that money to fund things like the Vietnam War and other operating expenses of the Federal Govt.? What a hypocrite! A Grand slam?? No wonder you need liberalism to support you

Actually, I had nothing to say about it.

 

[Conservative]

Actually, I had nothing to say about it.

Which speaks volumes about you and your ideology as you are incapable of admitting when wrong or even speaking out against your own party. What LBJ did was wrong and you know it but cannot admit it. I get it, I understand the liberal mind of yours and it is a sad state of affairs dealing with people like you. Maturity is something the radical left cannot understand as they can never admit when wrong. suggest you change your lean because that is you

 

[rickc]

We need to fix social security.

yeap

simple really. remove the salary cap on taxable income. make all income earned and unearned subject to the social security and medicare tax. if that doesn't do it then raise the tax rate.

no need to raise the retirement age.

only reason it hasn't already happened is because of the republicans in congress and their big money owners.

just like a.real health care system for all Americans

 

[haymarket]

Which speaks volumes about you and your ideology as you are incapable of admitting when wrong or even speaking out against your own party. What LBJ did was wrong and you know it but cannot admit it. I get it, I understand the liberal mind of yours and it is a sad state of affairs dealing with people like you. Maturity is something the radical left cannot understand as they can never admit when wrong. suggest you change your lean because that is you

Actually the only thing it speaks volumes about is I was a high school kid when that decision was made by elected officials.

 

[Neomalthusian]

The program has worked great since the Thirties and will continue as long as we have the national will to do it.

Yeah it has worked so fantastically but we have to fundamentally change how it works.

All I am suggesting is a small change - today 94% of workers are FICA taxed on 100% of their earnings. I simply want to expand that to the other 6%.

Clever ways of finessing the language of your proposal doesn't make it a "small change." It's a profound change, because tucked into your proposal is the assumption that we will decouple contributions from benefit levels by freezing the benefit increases to higher contributors. Eliminating the contribution cap while freezing benefits to the upper income levels welfarizes Social Security by eviscerating the pension-like aspects of its original design.

Note that I'm not disagreeing with your proposal per se. Social Security does need to be welfarized in a manner much like what you propose. All I'm poking fun at is your denial about the significance and implications of your proposal and your insistence that despite the need for fundamental changes to the program, it nonetheless has always "worked great" and still "works great."

 

[Conservative]

Actually the only thing it speaks volumes about is I was a high school kid when that decision was made by elected officials.

The issue is SS and Medicare were put on budget and kept there for decades none of which bothers you because you have never seen a dollar that you wouldn't spend and have no problem with your bureaucratic friends committing fraud with your payroll taxes. Can't admit they were wrong, can you? Cannot admit that SS and Medicare funds were basically stolen from those who contributed, can you? Cannot admit you have any clue what taxes you pay or their purpose, can you?

 

[phattonez]

I have no idea because it requires different congress critters to make different campaign/election laws. The best way would be to keep as much government power at the state and local level as possible yet congress is busy doing exactly the opposite.

I generally agree when it comes to subsidiarity. I think a lot of it has to be cultural. People without roots don't put up much of a fight.

 

[haymarket]

Yeah it has worked so fantastically but we have to fundamentally change how it works.

My house was built in 1974. I have owned it since 1984. It was a great house when we bought it and served us well. I have put lots and lots of money in it to make it even better.

That is the way things work. A good program like Social Security needs to be tweaked periodically to keep it a good program.

Clever ways of finessing the language of your proposal doesn't make it a "small change." It's a profound change, because tucked into your proposal is the assumption that we will decouple contributions from benefit levels by freezing the benefit increases to higher contributors. Eliminating the contribution cap while freezing benefits to the upper income levels welfarizes Social Security by eviscerating the pension-like aspects of its original design.

Note that I'm not disagreeing with your proposal per se. Social Security does need to be welfarized in a manner much like what you propose. All I'm poking fun at is your denial about the significance and implications of your proposal and your insistence that despite the need for fundamental changes to the program, it nonetheless has always "worked great" and still "works great."

A change that does not hit 94% of the workers but only impacts 6% is a minor change.

 

[haymarket]

The issue is SS and Medicare were put on budget and kept there for decades none of which bothers you because you have never seen a dollar that you wouldn't spend and have no problem with your bureaucratic friends committing fraud with your payroll taxes. Can't admit they were wrong, can you? Cannot admit that SS and Medicare funds were basically stolen from those who contributed, can you? Cannot admit you have any clue what taxes you pay or their purpose, can you?

How can I be wrong when I was a kid in high school when this happened and you became obsessed with it?

 

[phattonez]

Why don't we treat parental provision of cars and college funding like wages, or scholarships like wages, or student discounts like wages? Why should that get special treatment?

The implication, of course, being that these things should be taxed like income, but are being "treated special" by somehow being exempted from governmental taking - assuming that governmental taking rightfully extends to all items, and that which it takes less of is therefore carved out exceptions.

We can have a debate about those issues, but I asked you about capital gains specifically, which is a far bigger source of income and allows people to live without working to contribute to society. So answer that question specifically: why shouldn't we treat it just like income?

Nope. Which is why, if you'll go wander through the thread I linked to, you'll note that:

A) I wanted to see if this was plausible, and so I ran the numbers for what-if-we-had-tried-this-in-a-downturn. I had to take the worst-performing post-WWII cohort, keep the worker under $32,000 of income his entire working life, give him two full years of unemployment, and have him retire immediately after back to back 2008-2009-style market meltdowns.... just to get the low income worker down to a return that matched the average worker's social security check.

What happens with a Japan style downturn that never recovers?

B) The plan includes a guaranteed minimum monthly benefit of what one would have received from Social Security (a flattened benefit, with lower income folks getting a bit more and upper income folks getting a bit less), meaning that individuals had a floor they could not fall below, protecting them from precisely the worry you outline, and which was more than paid for by revenues generated by taxing the accounts at 50% upon transitioning to the heirs.

Which seems reasonable to me.

 

[phattonez]

yeap

simple really. remove the salary cap on taxable income. make all income earned and unearned subject to the social security and medicare tax. if that doesn't do it then raise the tax rate.

no need to raise the retirement age.

only reason it hasn't already happened is because of the republicans in congress and their big money owners.

just like a.real health care system for all Americans

I agree with you except on this point. This is something that Democrats could have done, but instead they passed a huge windfall for health insurance companies. Let's face it, both of our major parties are sold to big business.

 

[molten_dragon]

so how about this one

how about a flat tax on all income. earned and unearned

first $35,000 excluded.

balance budget admendment . tax rate set by what it takes to balance the budget

no deductions, loopholes or writeoffs

no more payroll taxes. Social Security and Medicare come from the general fund where they have been putting it all these years

every quarter every American has to sit down and write a check to the IRS. if congress cuts spending that check gets smaller. if they increase spending then your tax bill goes up. maybe that will bring some accountability to washington.

Eh, it's not the worst proposal I've heard, but it's not my ideal solution. $35k seems very arbitrary. Too much for a single person, borderline not enough for a family of 4. I'd probably set it at something like 150% of the federal poverty level.

Balanced budget amendment depends on exactly how it's written. I believe there are times when deficit spending is necessary, though it's currently vastly overused.

Having to write a check to the IRS every quarter is just pointless extra work I have to do 4 times a year. Just take it out of my paycheck like you do now.

 

[Neomalthusian]

My house was built in 1974. I have owned it since 1984. It was a great house when we bought it and served us well. I have put lots and lots of money in it to make it even better.

That is the way things work. A good program like Social Security needs to be tweaked periodically to keep it a good program.

Not a very good analogy. Nature of your argument here is that you built a house in 1974, but the foundation was defective, the framing was weak, plumbing was non-functional, and the electrical was dangerous. So eventually you rebuilt the foundation, gutted the whole thing, replaced or rebuilt most of the framing, redid all the plumbing, and brought your electrical up to code, while maintaining the house you built in 1974 was a solid one, that all it needed was some tweaks. Reality, no, it needed a complete overhaul.

Eliminating the contribution cap while freezing benefits fundamentally changes the pension-like nature of the program. There’s no way around it. You can try to BS and minimize and finesse the significant of changing the pension like nature of SS, and I’m sure politicians will when the time comes to actually make the changes that are necessary, but the fact that changes are necessary that are this fundamental in nature shows that these programs don’t work as pensions. The fact that state government pensions, union pensions, and company pensions are very often in bad shape only adds to the overwhelming evidence that pensions are bad concepts.

Federal government isn’t going to run out of its own fiat money to pay the benefits, and knows this, which is a big part of why no action has ever been taken to resolve the fundamental problems with its original funding structure. Monetarily sovereign federal government doesn’t give a ****. They will “have to” pay the benefits, so they will, including by using the powers of fiat currency to pay them. And when it does, it will pretend it has made no significant change to the system whatsoever, and claim it’s working as it always was intended to work, which is laughably bogus, but people will believe it.

Tons of non-federal pensions, OTOH, have no such monetary tools. Good luck to those beneficiaries.

 

[Lord of Planar]

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.

I, on the other hand, think we need to tax everyone at an equal percentage. People who don't pay taxes have no skin in the game, and want everyone elses taxes raises. These selfish people need to pay too.

 

[Lord of Planar]

It makes it the reality we live in.

My solution would NOT raise taxes for the 94% of workers who are already paying FICA tax on 100% other incomes. The only people impacted would be the upper 6% who have NOT paid the FICA tax on 100% of their incomes as the overwhelmitng majority of people do.

You would get more from actors, and sports people. The rich I'll bet, bot so much and most their income are from sources that don't take SS out like stock investments and bonuses. The increase in payroll tax revenue would be far less than you guys think.

 

[Lord of Planar]

Social Security revenue is a government inflow. Social Security payments are government outflows. The money borrowed from the Social Security fund is a government obligation. I really don't see the problem here.

For conservatives that crave revenue starving tax-cuts while pretending to be committed to principles abandoned the moment they become inconvenient -- like deficits, you should be in favor of this action.

That's why the left doesn't understand how they are destroying this countries viability compared to the rest of the word. You guys think debt doesn't matter.

 

[WarmPotato]

yeap
simple really. remove the salary cap on taxable income. make all income earned and unearned subject to the social security and medicare tax. if that doesn't do it then raise the tax rate.
no need to raise the retirement age.
only reason it hasn't already happened is because of the republicans in congress and their big money owners.
just like a.real health care system for all Americans

Communism is not the answer

 

[haymarket]

Not a very good analogy. Nature of your argument here is that you built a house in 1974, but the foundation was defective, the framing was weak, plumbing was non-functional, and the electrical was dangerous. So eventually you rebuilt the foundation, gutted the whole thing, replaced or rebuilt most of the framing, redid all the plumbing, and brought your electrical up to code, while maintaining the house you built in 1974 was a solid one, that all it needed was some tweaks. Reality, no, it needed a complete overhaul.

To be honest with you, its my house and my analogy and it works for me. No "complete overhaul" was needed.

Eliminating the contribution cap while freezing benefits fundamentally changes the pension-like nature of the program. There’s no way around it. You can try to BS and minimize and finesse the significant of changing the pension like nature of SS, and I’m sure politicians will when the time comes to actually make the changes that are necessary, but the fact that changes are necessary that are this fundamental in nature shows that these programs don’t work as pensions. The fact that state government pensions, union pensions, and company pensions are very often in bad shape only adds to the overwhelming evidence that pensions are bad concepts.

My pension - a state pension - is rock solid and the check comes every month. I know lots and lots of people in the exact same position.

 

[haymarket]

You would get more from actors, and sports people. The rich I'll bet, bot so much and most their income are from sources that don't take SS out like stock investments and bonuses. The increase in payroll tax revenue would be far less than you guys think.

Past studies show otherwise.

 

[haymarket]

Regarding eliminating the cap on FICA contributions

Eliminating the tax cap would make Social Security’s financing more fair. Only 6 percent of workers earn more than the current cap of $110,100. They would pay on all their earnings throughout the year just as everyone else does, and would get a modest increase in benefits. This change alone would just about eliminate Social Security’s long-term financing gap. Combining this with other changes could wipe out the gap and pay for needed benefit improvements. (Virginia Reno, National Academy of Social Insurance)

 

[Conservative]

Regarding eliminating the cap on FICA contributions

None of which justifies putting SS and Medicare on budget in the first place and the abuse of those tax dollars which you want to ignore. So let's give these bureaucrats more tax revenue because they misused previous tax revenue? Is that liberal logic as it appears to be yours? Long term financial gap created how?? LBJ putting SS on budget and using the money to fund the Vietnam War and other Congresses using it to fund social programs to keep them employed

Until the bureaucrats take SS and Medicare off budget and explain how much of the trust fund was used for issues other than SS and Medicare not one more dime in Payroll taxes to the bureaucrats!! Keep running from reality and keep proposing higher taxes for those same bureaucrats, BOTH PARTIES!