Not With My Social Secuirty, You Don't!

51hh | Nov 4, 2013 | 1,693 posts since 2010

From Boston.com (AP Poll):

Poll: Older Americans nix Social Security changes - Business news - Boston.com

"Raise the age at which you can begin collecting full Social Security benefits? Older Americans say no. They also veto reductions in the cost-of-living increase.

But a poll finds support among those 50 and older for raising the cap on earnings that are taxed to fund the Social Security program so higher-income workers pay more."

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Answers

Shorebreak | Nov 5, 2013 | 4,039 posts since 2010

President Barack Obama has publicly endorsed a cut to future Social Security benefits by attaching them to a lower rate of inflation, known as Chained CPI. Republicans strongly support this change. (Under Chained CPI, benefits would grow more slowly, under the theory that rising prices lead to changes in behavior. For instance, if the price of chicken rises, seniors can maintain their standard of living by buying less chicken and more beef.)

jamesstewart | Nov 6, 2013 | 64 posts since 2011

What income level is the top marginal tax rate at? They might have to cut back on a luxury house or a yacht. I feel for them. Businesses also get many tax subsidies that individuals don't get to offset their taxes.

Should only lower income levels only have to shoulder the tax burden? It isn't easy on that group either.

At some point we are all going to have to pay for all the past and future spending that our elected folks have already comitted. When the actual cost of what the government is spending is felt by all Americans, perhaps our elected officials will be forced to be more frugal.

Shorebreak | Nov 6, 2013 | 4,039 posts since 2010

Re: 13. Wednesday, November 6, 2013 - 7:39 PM

The article cited was dated 2012. Regardless, it doesn't justify the current cap on earnings.

paoli2 | Nov 5, 2013 | 2,641 posts since 2011

I think this is an abomination to seniors. First they destroy our savings interest income so we have to cut back on what we can spend and they have the audacity to want to cut some of the social security we get?? I think Washington has had a nervous breakdown and needs to get serious therapy. Their brains just aren't working right any longer. Didn't they have mothers? What is this with going after the seniors? Just because they may not have liked their own moms is no reason to take it out on me. I am "the "World's Best Mother". I can prove it cause I have a plastic figurine from my DD telling me so! They need to get over their "we hate all old people" and learn to apologize to their moms.

lou | Nov 6, 2013 | 1,004 posts since 2010

Do people realize by eliminating the cap it would increase the top marginal tax rate for the self-employed from 40% to 53%. In some states, if you include state tax and other payroll taxes, you are looking at taxes in excess of 60%. Small businesses will get killed, too.

I don't want to see SS jeopardized but I also don't want to kill the economy with suffocating taxes. Raising taxes on the younger generation to support seniors is not a good idea. It's not their fault that seniors are getting decimated with this dumb zero interest rate policy.

jamesstewart | Nov 6, 2013 | 64 posts since 2011

Reality is that most yacht owners are in the $400,000 and up bracket.

Back to the topic, all I really want to point out is that the SS tax is or could be hard on those making under $400,000 per year, which I believe is your point also. But why not have those making over that amount contribute to SS to help our country out?

paoli2 | Nov 6, 2013 | 2,641 posts since 2011

This is beginning to be hilarious. I'm hoping to be lucky enough to get 2% on my next CDs and some of you actually know what yachts cost and how much money we have to have to afford one. Oh yes, I check out the prices of yachts every month or so. Maybe if CD rates rise to 3%, I can afford one too. :) It's Twilight Zone time again on DA.

Shorebreak | Nov 6, 2013 | 4,039 posts since 2010

"Annual earnings subject to Social Security taxes are currently capped at $110,100. Only 6 percent of workers earn more than that. These top 6 percent get a boost in their take- home pay when they reach the cap and stop paying into Social Security for the year. (Their employers stop paying in then, too.) For example, someone earning about $120,000 this year would hit the cap and stop paying into Social Security in late November, while someone making $2.5 million would stop paying in mid-January. Since these higher earners don’t pay Social Security taxes on all of their earnings, their effective Social Security tax rates are lower—sometimes drastically lower—than the 6.2percent rate paid by workers whose earnings fall below the cap. For instance, a worker earning $120,000—moderately above the cap—pays an effective Social Security tax rate of 5.7 percent of his or her total earnings; the employer pays a matching rate. One making $2.5 million sees the vast majority of his or her earnings exempt from Social Security, and pays only about 1/3 of 1 percent of his or her total earnings."

http://www.aarp.org/content/dam/a...con-sec.pd

lou | Nov 6, 2013 | 1,004 posts since 2010

If you want to raise the tax rate on capital gains, dividends or even tax municipal bond interest, I don't have a problem with that, but I do have a problem with raising the tax rate on earned income. People who start businesses or are successful because they provide a vital service should not have to pay another 13% of their income to the govt, particularly if that leads to less capital for business investment. In the last five years, we have had the lowest number of business start ups in recent history. Why would we do anything to make it more difficult to increase business formation and employment?

Shorebreak, I am not surprised that AARP takes this position. As Alan Simpson, of Bowles Simpson fame, has said: AARP is a bunch of marketers, concerned with their own profit above anything else.

Finally, SS is not suppose to be a welfare program. The amount you pay in should be relatively proportionate to the amount you get out of it. The program wasn't intended to have one group pay for a disproportionate share of the benefits for all other groups. As a social insurance program, the fica tax was suppose to be more like a premium rather than a welfare tax.

lou | Nov 6, 2013 | 1,004 posts since 2010

Ally, you invest in a company because you expect to get a healthy return on your money, which is harder to achieve if there is less profit because of higher taxes. Ally, I started my own business and ran it for 25 years. How many businesses have you created?

darkdreamer4u | Nov 5, 2013 | 350 posts since 2010

But a poll finds support among those 50 and older for raising the cap on earnings that are taxed to fund the Social Security program so higher-income workers pay more."

Fully support this. Why a cap to begin with? Tax the ENTIRE income for Social Security and all the woes about its alleged demise in the near future will be gone.

lou | Nov 6, 2013 | 1,004 posts since 2010

I live in a high tax state and I can promise you taxes are not low.

The increase in taxes for SS will begin at $110,000. I don't think these people are running around with yachts. I wish people would think before responding to every problem with the higher tax mantra.

lou | Nov 6, 2013 | 1,004 posts since 2010

Have you checked out the prices for yachts. The ones you're talking about cost many millions of dollars. A guy who owns a small business with less than a half a million in profit is not gallivanting around the world on his yacht. Get real.

lou | Nov 6, 2013 | 1,004 posts since 2010

Because I don't want to impose higher taxes on small businesses and entrepeneurs, the primary engine of employment growth, when we already near 50% marginal rates (including state taxes). I agree that SS and Medicare will have funding problems, but the answer is not higher taxes on the productive class. Capital spending and reinvestment of profits, the primary way to grow a business, should be incentivized not penalyzed.

This may not be popular with some of the readers, but I would rather means-test SS and Medicare for the wealthy rather than enact policies that would hurt the economy. I say this, knowing I might be one of the people affected by reforming the system in this manner.

jamesstewart | Nov 6, 2013 | 64 posts since 2011

"it would increase the top marginal tax for the self-employed from 40% to 53%".

These people make $400,000 and up. Updated: 2013 Federal Income Tax Brackets And Marginal Rates - Forbes

These people can afford yachts. They can afford the tax.

Ally6770 | Nov 6, 2013 | 4,304 posts since 2010

The last report from IRS said the top 1% pay an effective tax rate of 20%. Most of their earning are from capitol gains. The top 20% pay an effective tax rate of 24%. We had a 6 figure income because of a large Roth conversion but our effective tax rate (with no deductions) was only 16.4%. The top rate is not the effective tax rate.

To #8 Yes a yacht owner can be in the mid 6 figure earnings. We had a friend who had a 3 bedroom yacht built in Japan, and my husband helped pilot it up the Mississipi to bring it to him.

To #12. The FICA tax base for 2013 is $113,700 not $110,100. It has always been paid on the top 90% of wage earners until the 80's and it is now down to around 80% now or was before 2008.

Ally6770 | Nov 6, 2013 | 4,304 posts since 2010

Yes that article stated Fica taxes were paid on the bottom 84%. Until the 80's it had been on the bottom 90% of wages. Look at the amount of money the SS trust fund has lost.

I 100% agree that the Fica taxes on all wages should be put on the table. I also think that if the retirement age is raised that there has to be an good adjustment for those that are not physically able to work after 62. Many guys working in the building trades have bad backs, shoulders, ankles and cannot physically work longer. So many have had hip replacements, shoulder operations, have had several back operations. Tom Harken is co-sponsering an interesting bill for SS. Including raising the check for low income SS recipients, using the elderly cost of living taking in the equations of higher medical bills, etc that seniors have to pay and a few other things that at first glance make sense.

Ally6770 | Nov 6, 2013 | 4,304 posts since 2010

It is articles such as this that some in the "budget commitee" think like this that scares me. Some seniors are doing better than others as well as some workers are doing better off than others. It bothers me when a house rep from TN argues against the food stamp increase stating it makes people not want to work while he himself is collecting over $28,000 a month in farm subsidies. Check out www.ewg.org for info on safe food and who get the farm subsidies.

Robert J. Samuelson: We need to stop coddling the elderly - The Washington Post

Ally6770 | Nov 6, 2013 | 4,304 posts since 2010

#16. If you invest in your company you are not paying taxes on that money. Am I missing something here. IRS records show when taxes are high business and sole proprietorships invest more in their company. When taxes are low they buy more cars, yachts, and planes.

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