Social Security reform

[VitaMan]

This comes up every few years, nothing much gets changed.


Imho, once you start collecting SS, you should not pay SS tax on money you earn from working after that time.


And you should not be taxed on your SS benefits if you earn income over a certain level. Your SS benefits were already taxed once when you paid in to SS. Now you are taxed on it twice in this circumstance.

[farmstud60]

Originally Posted by VitaMan

This comes up every few years, nothing much gets changed.


Imho, once you start collecting SS, you should not pay SS tax on money you earn from working after that time.


And you should not be taxed on your SS benefits if you earn income over a certain level. Your SS benefits were already taxed once when you paid in to SS. Now you are taxed on it twice in this circumstance.

Both occur thanks to Joe Biden when he was in the Senate

[Jackie S]

Originally Posted by VitaMan

This comes up every few years, nothing much gets changed.


Imho, once you start collecting SS, you should not pay SS tax on money you earn from working after that time.


And you should not be taxed on your SS benefits if you earn income over a certain level. Your SS benefits were already taxed once when you paid in to SS. Now you are taxed on it twice in this circumstance.

I pay SS tax on my W-2 income every week. They take it out based on your income level, just like regular Income Tax. How ever, hey can’t take out more than 23%.

I am 78, and still work. That really doesn’t seem right, does it?
I think the cap this year is around $170,000. When I get mine paid up around June, it’s like getting a raise.

There has been talk of removing the cap. You just keep paying all year. One congressman stated that Lebron James gets his Social Security paid up during the first half of the first game of the season.

[Tiny]

Originally Posted by Jackie S

I pay SS tax on my W-2 income every week. They take it out based on your income level, just like regular Income Tax. How ever, hey can’t take out more than 23%.

I am 78, and still work. That really doesn’t seem right, does it?
I think the cap this year is around $170,000. When I get mine paid up around June, it’s like getting a raise.

There has been talk of removing the cap. You just keep paying all year. One congressman stated that Lebron James gets his Social Security paid up during the first half of the first game of the season.

Yes, the bastards want you to pay your "fair share." If I remember correctly, you're self employed, which means your total social security and Medicare payment would be 15.3% of income. Add that to your income tax and your total marginal rate would be over 50% if they remove the cap. Thank goodness you don't live some place like California or New York City, which would run it up to 60%+ with state income tax.

It might not be so bad if you were actually putting a big chunk of that money towards retirement through something like a 401K or pension. But social security is a Ponzi scheme. And you've already reached normal retirement age.

[SpeedRacerXXX]

Originally Posted by farmstud60

Both occur thanks to Joe Biden when he was in the Senate

And I'm sure you realize that the double tax was pushed by Ronald Reagan in 1983. Biden was not on the committee that drew up the bill but he did vote for it. The bill passed the Senate by an 88-9 vote.

[SpeedRacerXXX]

Originally Posted by Tiny

Yes, the bastards want you to pay your "fair share." If I remember correctly, you're self employed, which means your total social security and Medicare payment would be 15.3% of income. Add that to your income tax and your total marginal rate would be over 50% if they remove the cap. Thank goodness you don't live some place like California or New York City, which would run it up to 60%+ with state income tax.

It might not be so bad if you were actually putting a big chunk of that money towards retirement through something like a 401K or pension. But social security is a Ponzi scheme. And you've already reached normal retirement age.

You can call Social Security whatever you want but my wife and I pull in over $80,000 a year from it. I agree that if my company and I had been able to invest the same amount of money in a 401k I would have more money if invested wisely, but how many of us would have done that in our 20s and 30s if it was optional?

In my opinion Social Security is the best programs ever introduced by our government. Many people would be penniless without it. It has it flaws but I can live with those flaws. And Medicare is a close second in its importance to seniors.

[VitaMan]

Originally Posted by farmstud60

Both occur thanks to Joe Biden when he was in the Senate

A ridiculous comment, when 88 Senators voted for it. Every one of your posts attacks Biden, without any thought behind the post.

[Tiny]

Originally Posted by SpeedRacerXXX

You can call Social Security whatever you want but my wife and I pull in over $80,000 a year from it. I agree that if my company and I had been able to invest the same amount of money in a 401k I would have more money if invested wisely, but how many of us would have done that in our 20s and 30s if it was optional?

In my opinion Social Security is the best programs ever introduced by our government. Many people would be penniless without it. It has it flaws but I can live with those flaws. And Medicare is a close second in its importance to seniors.

Yes, if your company and you had invested the same amount in a decent 401K, you would have more money. That's why I would far prefer something like Australia's superannuation scheme to our social security. Australians contribute to managed funds instead of a Ponzi scheme. They call Australia the lucky country, but it's not luck. They're smarter than we are.

People who get into a Ponzi scheme earlier are better off. The Baby Boom generation may come out just fine. But our children and grandchildren won't, with the huge entitlement liabilities we're running up.

I'd say the same about Medicare. You and your wife will come out fine. But we're spending 18% of GDP on health care, much more than other developed countries. Our outcomes, in terms of measures like longevity and infant mortality, fall behind many countries. And people still get bankrupted in the USA because they can't pay medical expenses. Medicare is probably part of the problem. I'm no expert so don't know for sure.

[VitaMan]

You can't really call it a Ponzi scheme, as there is no interest or return promised to early "investors", which gets paid by later "investors" money. And it never builds up to where it makes it impossible to continue. It is the Ponzi scheme promises of 30% returns on your money or similar which makes those blow up.


Once you start collecting SS, the amount is based on your SS contributions over many years. So if you have to keep paying from income earned after you start collecting, it won't change the amount of benefit you receive much. That is just plain wrong. And it can be a lot of extra contributions if you work a lot....


The tax on SS benefits received if you earn income above a certain threshold is not so bad, except it is double taxation.

[SpeedRacerXXX]

Originally Posted by Tiny

Yes, if your company and you had invested the same amount in a decent 401K, you would have more money. That's why I would far prefer something like Australia's superannuation scheme to our social security. Australians contribute to managed funds instead of a Ponzi scheme. They call Australia the lucky country, but it's not luck. They're smarter than we are.

People who get into a Ponzi scheme earlier are better off. The Baby Boom generation may come out just fine. But our children and grandchildren won't, with the huge entitlement liabilities we're running up.

I'd say the same about Medicare. You and your wife will come out fine. But we're spending 18% of GDP on health care, much more than other developed countries. Our outcomes, in terms of measures like longevity and infant mortality, fall behind many countries. And people still get bankrupted in the USA because they can't pay medical expenses. Medicare is probably part of the problem. I'm no expert so don't know for sure.

\

I agree. Both SS and Medicare are in trouble. An I too am far from an expert on this subject but I do know that most countries are far more socialistic when it comes to SS and healthcare.

As an aside, I head to Australia tomorrow night. I plan to come back with a Snowy River hat.

[Tiny]

Hope you have a great trip SpeedRacer!

Vitaman, You have a good point, that social security doesn't promise 30%+ returns. And Congress and the President can always increase withholding, raise the retirement age, or lower benefits and make the system more solvent. However, with no changes, social security trust funds are expected to run out of money in 2041. Then old participants who are retired would be totally dependent on new participants for their social security checks. I haven't done the math, and who knows what the future holds, but in terms of getting people their money back, Bernie Madoff's Ponzi scheme might have been better funded than social security is in the long term.

[ICU 812]

I was sitting in a "Civics and Government" class in my senior year in High
School in the spring og 1969. The discussion was about Social Security. During the course of the presentation, we figured out that the wole thing relied on an ever growing group of working taxd payers to support those getting Social Security benafits.

We were in the middle of the Baby Boomer population bulge and knwe it. We also recognised that as we aged into the arena of Social Security, there would be little or nothing there for us.

And this was at a time when about all SS gave anyone was a small pension . . .if you had paid taxes by working for forty quarters. Now, SS supports a wide arrsay of benafits regardless of whether or not theyh have ever worked.

But 55 years ago, age 17 or 18, we all could see the eventual problem with the way it was all put together.

[westwardho]

Technically only half of your SS benefits are taxed. Specifically the half paid by your employer.

[ICU 812]

GRanted. An accurate statement.


The point is: In the past, only folks who had worked asnd paid in to SS could get benefits. Now, there are several cstagories of people getting benafits who have never paid in to SS.

[SpeedRacerXXX]

Originally Posted by westwardho

Technically only half of your SS benefits are taxed. Specifically the half paid by your employer.

??? When I fill out my turbo tax form, I enter income from Social Security and 85% of that income is taxable.