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(Fairness & Accuracy)   When it's raising taxes, $250K a year is "middle class". When it's cutting Social Security, $50K is "wealthy"   (fair.org) divider line 180
    More: Dumbass, social security, Yuval Levin, Cost of Living Allowance, op-ed pages, family income, water hemisphere, middle class  
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4431 clicks; posted to Politics » on 22 Feb 2013 at 4:08 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-02-22 01:39:02 PM
FTFA Headline:

When You're Cutting Social Security, 'Wealthy' Begins at $25K

 fark asshole Republicans Teabagging Motherfarkers
 
2013-02-22 02:03:17 PM
Be profligate, get rewarded.  Be responsible and frugal, get punished.
 
2013-02-22 02:52:30 PM
It is almost universally accepted in policy circles and in the pundit class that strengthening Social Security involves cutting future benefits relative to what current law promises because according to current projections, Social Security only has the ability to pay promised benefits in full until 2033, and then 75% of them thereafter. The basic thinking is that we must promise to cut benefits now so that we won't necessarily have to cut them 22 years from now. What?

Imagine if that is how we treated defense spending. Since it appears budgets will be tight in the 2030s, best to mothball all those aircraft carriers today. Who would buy that argument?

The reality is that we will make our defense decisions about the 2030s in the 2030s. That's just how we should treat federally financed retirement programs. We never actually have to cut benefits if we make the policy choice to keep funding them.

Social security is only bankrupt to the extent that our political leaders lose the will to invest in a decent retirement for American workers. Link
 
2013-02-22 02:54:51 PM
Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited.

Now things have turned around. As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.

If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren't. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. ... When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they're trying to renege on a deal halfway through because they don't want to pay back the loans they got. Link
 
2013-02-22 02:56:45 PM
The top third of beneficiaries (by lifetime income)

So where are they pulling that $50k number out of their asses from?  It has nothing to do with their income at their retirement age.  The cuts go to the top third of beneficiaries based on their cumulative lifetime income.

No reading comprehension across the board.  Your blog sucks, subby.
 
2013-02-22 02:57:01 PM

TheHighlandHowler: Be profligate, get rewarded.  Be responsible and frugal, get punished.


Work your ass off to climb into the middle class, get your benefits cut.  Inherit millions from your dad, get a tax cut.
 
2013-02-22 03:01:52 PM

TheHighlandHowler: Be profligate, get rewarded.  Be responsible and frugal, get punished.


How is not saving for your own retirement and instead expecting a government programme to take care of you in old age "frugal"?

OASDI is an insurance policy - as in, worst case scenario, you turn to it.  It shouldn't be your intended sole source of income in your later years.
 
2013-02-22 03:05:53 PM

Dusk-You-n-Me: The reality is that we will make our defense decisions about the 2030s in the 2030s. That's just how we should treat federally financed retirement programs. We never actually have to cut benefits if we make the policy choice to keep funding them.


Wait until it is too late to fix the problem.  What will happen is we will just flat out run out of money.  But we can just raise taxes, you say?  Not exactly.  Technically you can, but there will be consequences and those consequences mean raising taxes won't solve your problem.  You can cut spending in other places.  You can print more money.  All of these options lead to other problems.  And when social security runs out of money and stops making its payments to people who have earned them, what do you think young folks just starting to pay in will do?  They will opt out.  But they can't opt out, you say?  They will find a way.  If the deal they are getting is bad enough for them, they will find a better option.
 
2013-02-22 03:09:17 PM

SlothB77: Wait until it is too late to fix the problem.


TWENTY FIVE YEARS.

Defense spending still running in the black, is it?

There are changes we can make, but cutting benefits, including Obama's Chained-CPI (cause he's such a liberal, you see) are not necessary. Raising the cap, even a small amount, and 25 years of solvency turns into many more.
And, since 401Ks are going the way of the dodo, we should be increasing benefits, not cutting them.
 
2013-02-22 03:15:23 PM

SlothB77: The top third of beneficiaries (by lifetime income)

So where are they pulling that $50k number out of their asses from?  It has nothing to do with their income at their retirement age.  The cuts go to the top third of beneficiaries based on their cumulative lifetime income.


What a bizarre criterion.  It is not based on current means or needs.  It seems lots of unintended consequences could arise.
 
2013-02-22 03:38:23 PM

SlothB77: The top third of beneficiaries (by lifetime income)

So where are they pulling that $50k number out of their asses from?  It has nothing to do with their income at their retirement age.  The cuts go to the top third of beneficiaries based on their cumulative lifetime income.

No reading comprehension across the board.  Your blog sucks, subby.


And, since the cap is at $106,000 a year, I have a feeling this law will make no distinction between a person earning exactly that and someone making millions.  Ah, America.
 
2013-02-22 03:41:36 PM

cretinbob: FTFA Headline:

When You're Cutting Social Security, 'Wealthy' Begins at $25K


That is only because the author got it wrong.

He could have read the first sentence of what he quoted and would have had a clue:

The top third of beneficiaries (by lifetime income) [would] receive no annual cost-of-living adjustment in retirement.

So wealthy are people who have over their lifetime were in the top third.  What they are making at 65 is meaningless.
 
2013-02-22 03:44:13 PM

Shaggy_C: SlothB77: The top third of beneficiaries (by lifetime income)

So where are they pulling that $50k number out of their asses from?  It has nothing to do with their income at their retirement age.  The cuts go to the top third of beneficiaries based on their cumulative lifetime income.

No reading comprehension across the board.  Your blog sucks, subby.

And, since the cap is at $106,000 a year, I have a feeling this law will make no distinction between a person earning exactly that and someone making millions.  Ah, America.


Wrong.
It says "lifetime income" not "lifetime income up to the cap".  In your annual Social Security statement it does list your annual income and what the cap was in each year.
 
2013-02-22 03:48:38 PM
It's pretty obvious that the era of Americans helping each other out is at an end.  I mean really, we tried making sure our countrymen didn't die of starvation or didn't need to work until they died and what did any of that do for us?

We really need to tackle spending cuts and I think we should prioritize so that the programs that do the most to help those around us get cut first.
 
2013-02-22 04:07:23 PM

SlothB77: Dusk-You-n-Me: The reality is that we will make our defense decisions about the 2030s in the 2030s. That's just how we should treat federally financed retirement programs. We never actually have to cut benefits if we make the policy choice to keep funding them.

Wait until it is too late to fix the problem.  What will happen is we will just flat out run out of money.  But we can just raise taxes, you say?  Not exactly.  Technically you can, but there will be consequences and those consequences mean raising taxes won't solve your problem.  You can cut spending in other places.  You can print more money.  All of these options lead to other problems.  And when social security runs out of money and stops making its payments to people who have earned them, what do you think young folks just starting to pay in will do?  They will opt out.  But they can't opt out, you say?  They will find a way.  If the deal they are getting is bad enough for them, they will find a better option.


This of course was the argument people like you wanted all along when a slight tax increase 30 years ago could have easily fixed the fund. But no, you simple cannot imagine a solution that is anything but cuts, cuts and cuts. You refuse to let yourself accept any solution but the one you come up with all on your own that involves hurting the poor so you don't dare pay a single cent more you greedy worthless fark.
 
2013-02-22 04:12:12 PM
You know, every time some rage inducing crap like this comes up, my knee jerk reaction is to assume its coming from Republicans. Then I feel bad for being knee-jerk and click the link. And its always the farking Republicans

Seriously, WTF guys?
 
m00
2013-02-22 04:12:15 PM
I'm pretty conservative, but fark the rich. Obama hasn't done nearly enough there.
 
2013-02-22 04:14:46 PM
That's called "Republican math".
 
2013-02-22 04:17:41 PM

Dusk-You-n-Me: Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited.

Now things have turned around. As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.

If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren't. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. ... When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they're trying to renege on a deal halfway through because they don't want to pay back the loans they got. Link


I'm confused. People who pay payroll taxes don't pay income taxes?
 
2013-02-22 04:18:38 PM

Old enough to know better: That's called "Republican math".


I was told there would be no Republicans math.
 
2013-02-22 04:20:09 PM

m00: I'm pretty conservative, but fark the rich. Obama hasn't done nearly enough there.


Obama wants social security cuts so I don't know why you would want him to do more if you oppose cuts.
 
2013-02-22 04:20:09 PM

ib_thinkin: Dusk-You-n-Me: Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited.

Now things have turned around. As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.

If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren't. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. ... When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they're trying to renege on a deal halfway through because they don't want to pay back the loans they got. Link

I'm confused. People who pay payroll taxes don't pay income taxes?


Low income earners
 
2013-02-22 04:21:05 PM
Another simple solution would be to gradually increase the age of eligibility to 70 or 72 to account for the changes in life expectancy.
 
2013-02-22 04:22:02 PM
Hey Ma! I'm finally wealthy!
 
2013-02-22 04:22:39 PM

ib_thinkin: I'm confused. People who pay payroll taxes don't pay income taxes?


Remember the "50% of Americans pay no income taxes" truism that enrages leftists on these boards?
 
2013-02-22 04:24:24 PM

GAT_00: SlothB77: Dusk-You-n-Me: The reality is that we will make our defense decisions about the 2030s in the 2030s. That's just how we should treat federally financed retirement programs. We never actually have to cut benefits if we make the policy choice to keep funding them.

Wait until it is too late to fix the problem.  What will happen is we will just flat out run out of money.  But we can just raise taxes, you say?  Not exactly.  Technically you can, but there will be consequences and those consequences mean raising taxes won't solve your problem.  You can cut spending in other places.  You can print more money.  All of these options lead to other problems.  And when social security runs out of money and stops making its payments to people who have earned them, what do you think young folks just starting to pay in will do?  They will opt out.  But they can't opt out, you say?  They will find a way.  If the deal they are getting is bad enough for them, they will find a better option.

This of course was the argument people like you wanted all along when a slight tax increase 30 years ago could have easily fixed the fund. But no, you simple cannot imagine a solution that is anything but cuts, cuts and cuts. You refuse to let yourself accept any solution but the one you come up with all on your own that involves hurting the poor so you don't dare pay a single cent more you greedy worthless fark.


"You refuse to let yourself accept any solution but the one you come up with all on your own that involves hurting the poor so you don't dare pay a single cent more you greedy worthless fark."

 QFT.
 
2013-02-22 04:24:42 PM

Thoguh: Another simple solution would be to gradually increase the age of eligibility to 70 or 72 to account for the changes in life expectancy.


Life expectancy is only higher for the upper middle class and above.  Laborers are dying just as young as they always have.  So now you want to deny those poor souls benefits too, after already suffering through a slavelike life of hard menial labor?
 
2013-02-22 04:25:23 PM

SlothB77: The top third of beneficiaries (by lifetime income)

So where are they pulling that $50k number out of their asses from?  It has nothing to do with their income at their retirement age.  The cuts go to the top third of beneficiaries based on their cumulative lifetime income.

No reading comprehension across the board.  Your blog sucks, subby.


Your SS benefits are determined by your cumulative lifetime income (the highest 35 years of it, anyway), ergo the top third of lifetime earners are going to be the top third of SS recipients.
 
2013-02-22 04:25:58 PM
Does anyone know offhand how high the income cap would have to be raised to bring Social Security to full solvency for the foreseeable future?
 
2013-02-22 04:28:12 PM

Shaggy_C: TheHighlandHowler: Be profligate, get rewarded.  Be responsible and frugal, get punished.

How is not saving for your own retirement and instead expecting a government programme to take care of you in old age "frugal"?

OASDI is an insurance policy - as in, worst case scenario, you turn to it.  It shouldn't be your intended sole source of income in your later years.


It might be that you're out of the loop, but over the past few decades, there's been this weird kind of growth going on with wages. It's called "no" growth.

Also, pensions used to be this thing folks had whereby they'd make less money, but be assured of income when they retired. You might not have heard about those.

Then, at some point in the not too distant past, we got this nifty little tax tool. You can read all about it in law books, under Internal Revenue Code section 401(k). It's a little like a pension, but instead of earning less in wages for the contractual guarantee of income in retirement, folks instead earn less in wages for the hope that the economy is doing pretty well when they retire.

Now, this isn't to say that Social Security ideally won't be your sole source of retirement income, just that there are some things you might not be considering.
 
2013-02-22 04:30:49 PM

Shaggy_C: Thoguh: Laborers are dying just as young as they always have.


That would be interesting if it were true  But it is not, so it isn't.

Got any more lies that you want to try to promote?

(try a little harder this time).
 
2013-02-22 04:31:05 PM

BMulligan: Does anyone know offhand how high the income cap would have to be raised to bring Social Security to full solvency for the foreseeable future?


I suppose that depends on your definition of "foreseeable". Right now it's good for ~30 years.

My guess is that it wouldn't take much to make it solvent indefinitely, but then we wouldn't be stuck forking our money over to Wall Street for retirement. Wall Street can't have that. Luckily for them, politicians (even the D's) are easy to buy.
 
2013-02-22 04:31:33 PM
3.bp.blogspot.com
 
2013-02-22 04:32:35 PM

BMulligan: Does anyone know offhand how high the income cap would have to be raised to bring Social Security to full solvency for the foreseeable future?


We only need to come up with about 0.9% of GDP in order to make Social Security's revenues match up with its expenses for the next 75 years. Some ways to do that:

g.foolcdn.com

Link
 
2013-02-22 04:33:11 PM

Shaggy_C: ib_thinkin: I'm confused. People who pay payroll taxes don't pay income taxes?

Remember the "50% of Americans pay no income taxes" truism that enrages leftists on these boards?


I hate because it is meaningless because it implies that they don't pay any taxes or didn't pay taxes at anytime in their life.  Also includes retirees and children which is just as stupid.

I don't hate the stat.  I hate the idiots who try and make it mean something significant in terms of economic policy.
 
2013-02-22 04:33:31 PM

ib_thinkin: I'm confused. People who pay payroll taxes don't pay income taxes?


People who pay income taxes may not pay payroll taxes (if all/most of their income is dividends and capital gains).
 
2013-02-22 04:34:52 PM

xxysyndrome: [3.bp.blogspot.com image 850x560]


They must read Fark.  How many threads have we had where people explain that $250,000+ isn't really that much if you live in a real place?
 
2013-02-22 04:35:15 PM

BMulligan: Does anyone know offhand how high the income cap would have to be raised to bring Social Security to full solvency for the foreseeable future?


Here is a pretty good link with too much data.

Problem is it is unclear if you need to do all their proposals or just a subset.
 
2013-02-22 04:35:59 PM

BMulligan: Does anyone know offhand how high the income cap would have to be raised to bring Social Security to full solvency for the foreseeable future?


Infinity dollars. Every dollar you make in salary should be subject to payroll taxes (and to make the Buffet Rule effective in this case as well, if over 50% of your income comes from CG, that gets payroll-taxed, not your salary).

I say we make the cap like a compressor (for you music geeks): for every dollar over the "cap" you earn, it only counts as $.25 for the purposes of SSI income calculations. So if the "cap" is $100k (to make the math easy) and you earn $200k in salary, your benefit calculation would be based on $125k in income.

Because payouts at 65/67 are based on how much you pay in, simply removing the cap doesn't do anything - you'll have to pay those old rich folks more when they retire if they kick in more now (and the inherent unfairness of simply removing the "incoming" cap and leaving the "outgoing" cap means I can't support that).

At least in the above, like progressive taxation, they get more back at retirement regardless of how much above the cap they earn.
 
m00
2013-02-22 04:36:01 PM

Ned Stark: Obama wants social security cuts so I don't know why you would want him to do more if you oppose cuts.


I oppose posturing. If Obama was serious, all of those bankers and hedge fund managers that we bailed out  with tax money from the very people who were getting screwed by them would not be back to reckless investing and giving themselves massive bonuses.

It's true we need to cut spending and close tax loopholes for everybody, and we seriously need to reform social security and Medicare. But we live in a world where GE historically pays no income tax. The same GE that owns NBC, who makes a living telling you what to believe and who to vote for and what to think about an issue. Shockingly, not a whole lot of corporate shenanigans get press coverage. And now with PACs and unlimited anonymous donations, what aspect of our lives aren't bought and sold against our will?

So as I said, fark the rich. The use the tax dollars of the middle class to buy elections so that  they can continue to pay nothing, and then buy media companies to convince the very people they're stealing from that anything else is communism (Fox) or teabaggery (NBC/CNN)

If anyone thinks "oh how can you be a conservative and say that" then clearly NBC and FOX have done their job.
 
2013-02-22 04:37:06 PM
Let's go flat rate - no cap on social security wages...
 
2013-02-22 04:37:41 PM

xxysyndrome: [3.bp.blogspot.com image 850x560]


Thank you for reminding us about the plight of the top percentage income earners.  Those are the real victims in this story.  I don't know how I sleep at night knowing full well that some of them are going to have to pay a few percentage points higher in taxes.
 
2013-02-22 04:37:59 PM

edmo: Let's go flat rate - no cap on social security wages...


How about no, let's keep our progressive system of taxation and close the damn loopholes for the richest paying entities?
 
2013-02-22 04:42:04 PM
Late Friday afternoon Social Security is Broke thread. Super. Can't wait, leaving for un-Happy Hour now.
 
2013-02-22 04:44:00 PM

tenpoundsofcheese: Shaggy_C: Thoguh: Laborers are dying just as young as they always have.

That would be interesting if it were true  But it is not, so it isn't.

Got any more lies that you want to try to promote?

(try a little harder this time).


Here's the life expectancy for the top half of wage earners vs the bottom half upon hitting retirement age.  Seems to me the "laborers" would fit in the bottom half, and their line is pretty flat.

thinkprogress.org

Here's the detail (PDF): http://www.cepr.net/documents/publications/ss-2010-10.pdf
 
2013-02-22 04:45:50 PM

Shaggy_C: tenpoundsofcheese: Shaggy_C: Thoguh: Laborers are dying just as young as they always have.

That would be interesting if it were true  But it is not, so it isn't.

Got any more lies that you want to try to promote?

(try a little harder this time).

Here's the life expectancy for the top half of wage earners vs the bottom half upon hitting retirement age.  Seems to me the "laborers" would fit in the bottom half, and their line is pretty flat.

[thinkprogress.org image 480x244]

Here's the detail (PDF): http://www.cepr.net/documents/publications/ss-2010-10.pdf


Why argue about the truth with a man who has never shown any interest in it?
 
2013-02-22 04:45:51 PM

FloydA: Work your ass off to climb into the middle class, get your benefits cut.  Inherit millions from your dad, get a tax cut.


Now, now. I am sure he was all responsible and frugal when he arranged for Daddy to fark Mommy.
 
2013-02-22 04:46:10 PM
Eh, tie the Social Security and Minimum wage to the increases in income of the top 1%.
 
2013-02-22 04:46:43 PM
Means testing is one of the easiest ways to 'fix' Social Security. I think skipping a couple years of COLA is a balancing factor too. They benefited the most from deficit spending, might as well put them on the hook a bit. Maybe tax higher SS payments.

My dad fits the top third (actually higher) pretty well. He doesn't need the money. It just goes on the pile. So does the traditional pension. And the military O-7 pension. And he is still working 2-3 days a week at age 78 (and making about $220k doing it). I think he spends $40k a year. He thought buying a new Prius was frivolous. When you have almost eight figures in savings and pay the AMT you would think a $28k car wouldn't be considered frivolous. And he would be the first person to suggest cutting his benefits.
 
2013-02-22 04:48:43 PM
These people have the gall to call themselves Christian

/
This is becoming all too appropriate of a response to everything the House GOP is doing
 
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