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View Diary: "Everything you just said is wrong" (136 comments)

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  •  Put another way, in terms of externalities (9+ / 0-)

    The rich have been massively overtaxing the non-rich for decades.

    How is that even vaguely fair?

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Sun Apr 29, 2012 at 12:08:54 PM PDT

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    •  In what area? (2+ / 0-)
      Recommended by:
      Sparhawk, VClib
      The rich have been massively overtaxing the non-rich for decades.
      Certainly not in Social Security, which was specifically designed by FDR to be a "you get what you pay for" system so that it could not be labeled as "welfare": "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program,"  according to FDR.  He understood that SS had to be perceived as "what you get out is based on what you put in" -- that's the legal, moral, and political right to retirement benefits that he designed.  

      If you want to argue that the rich don't pay enough in federal income taxes -- which, unlike Social Security, are designed to be a progressive tax -- that's fine.  That's where the system is supposed to be progressive.  But Social Security is not designed to be a progressive tax, and FDR specifically insisted on the system where payouts are based on what you paid in.   Social Security was designed to be wage insurance, and you get the payout based on what you insured, not based on your other wealth.    

      Any discussion of Social Security needs to begin with an understanding of what it is, and is not, supposed to be.  

      •  In exactly these other areas, duh (4+ / 0-)
        Recommended by:
        Saint Jimmy, caul, Aquarius40, Upper West

        I don't see how you can seperate the two, as if they exist in completely separate economic universes. The rich have absolutely been massively overtaxing the non-rich for decades, in countless ways, from paying lower actual income and capital gains taxes to getting unneeded subsidies and other breaks like deregulation to being allowed to overwork and underpay their employees (which among other things has resulted in their paying less in net payroll taxes and thus they'll be getting less in net benefits). Our overall economic system has been massively unfair since the 80's and only getting more so and anyone who claims otherwise is either an idiot or a liar. It's the unfairness, stupid!

        And SS can and should be whatever we want it to be. Like blind founder worship, we need to get past a blind reverence for what leaders thought was best in the past. They weren't right about everything, and many of the things they were right about then may no longer be right now. One of the obvious but all too often forgotten central tenets of progressivism is progress, in thinking and policy. And if what worked then no longer works now, we need to change it.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Sun Apr 29, 2012 at 12:37:19 PM PDT

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        •  Um, it is progressives who separate the two. (1+ / 0-)
          Recommended by:
          VClib

          Remember the whole concept of the Social Security trust fund????

          Well, if you don't "separate" Social Security from the general revenue, then you don't have a "Social Security Trust fund" and Social Security is already bankrupt - it is already paying out more each year than it takes in.   The only reason we can say it is solvent is because of that very notion of a Social Security Trust fund -- i.e., the decades of payments made to Social Security which were "invested" in special United States treasuries -- which the U.S. Treasury owes back to the Trust fund.  

          If you want to subscribe to the notion that it's all "taxes" to the federal government, regardless of where it comes for and what it's used for, then Social Security is already an insolvent program.  

          •  Again, you're distorting my words (3+ / 0-)
            Recommended by:
            Saint Jimmy, Aquarius40, Upper West

            I never said that we should directly mix the two, but rather that we need to look at both of them and adjust each--separately--so as to make the overall situation more fair. We need to raise the cap (without proportionately raising benefits) AND make income and capital gains taxes more progressive and thus fair, but keep each separate in and of itself. The former to make SS solvent over the long term AND more fair, and the latter to make the overall economy solvent and fair (which in turn will make retirees more secure above and beyond SS).

            Either you're not understanding my points, or you're deliberately pretending not to and arguing with straw men of your own creation.

            "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

            by kovie on Sun Apr 29, 2012 at 12:55:27 PM PDT

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            •  I would vehemently oppose this (2+ / 0-)
              Recommended by:
              Sparhawk, VClib
              We need to raise the cap (without proportionately raising benefits)
              I think it would, as FDR feared, transform the very nature of Social Security into something more akin to a welfare program and, as FDR predicted, make it easier to kill.  

              It would surprise me, frankly, if the Democrats become the ones who push an approach that would "change Social Security as we know it," which is what your proposal would do.  

              •  Your proposal amount to GOP talk (3+ / 0-)
                Recommended by:
                caul, Upper West, Matt Z

                I.e. increasing everyone's income by improving the economy. Which is all nice and fine, but HOW? And that takes YEARS. And I don't know of any serious progressive who isn't advocating lifting the cap or still pushing the 30's vision of SS as a purely pay as you go program, which is unsustainable.

                Krugman, Stieglitz, Reich, Bernstein, Romer--they're all for lifting the cap.

                Who isn't?

                "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

                by kovie on Sun Apr 29, 2012 at 01:29:10 PM PDT

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            •  I don't see a problem with raising... (0+ / 0-)

              ...benefits at some level in accordance with raising the income cap. There is precedent for modifying the formula, skewing the payout so that it is proportionately less generous for very high earned income earners than most of the rest of us. There are so very, very few earned income potential beneficiaries that would (for the sake of discussion) qualify for a SS benefit of $6000 or $8000 a month as the formula currently would dictate if the cap was raised to create that level of benefit that I would be hard pressed to believe it would become a problem - actuarial or otherwise - worth more than a nanosecond of concern.

              Personally, I'd accept both a modest increase in both payroll tax (a full 8% for both employer and employee) and increasing the cap to $300,000 of earned income and find some political compromise that taps into unearned income: a transaction tax, a "right sized" inheritance tax, an assessment (1.5% ?) on all unearned income under $5 million, etc.

              When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

              by Egalitare on Sun Apr 29, 2012 at 04:19:09 PM PDT

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              •  I'm ok with raising benefits proportionate (0+ / 0-)

                to raising the cap so long as the formula isn't linear, and caps at a certain point. Which is how it currently works, btw. And the cap need not be lifted completely. All cap-raising proposals I've seen raise it only enough to cover the projected shortfall, not more. Thus not every dollar above the current cap gets taxed, or even taxed at the same rate as every dollar below it.

                And raising rates is a non-starter. Deducting another 2% from everyone's paycheck is simply not going to happen. Nor does it need to happen. Unlike what's been suggested above SS has never been a 100% get out what you pay in program. There's always been redistribution in it, by design, with the top earners getting less and the bottom earners more, proportionately, to what they paid in. I.e. it's not linear, never has been, never should be, as opposed to, say, an annuity. And with the right cap lifting and payout formulas, rates don't need to be raised to make up the shortfall. Sure, rich people will get slightly "shafted", but I'm ok with that. They can comfort themselves with their yachts.

                "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

                by kovie on Sun Apr 29, 2012 at 04:50:47 PM PDT

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