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View Diary: US already has high elder poverty rate, so why are Social Security cuts even on the table? (223 comments)

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  •  You could always just make it progressive (5+ / 0-)

    But right now, flat would be a big improvement because it is highly regressive.

    •  Isn't it already a flat tax? (1+ / 0-)
      Recommended by:
      elwior

      That means it's already regressive. I don't think I'm clear with what you're getting at. Wouldn't it be better to make it progressive now instead of keeping it regressive? Regressive taxes hurt low income people and benefit the rich.

      •  It's not a flat tax (6+ / 0-)

        It's worse than a flat tax.

        Someone making $50k pays half of what someone making $100k pays, true enough. But someone making $200k pays the same amount as the person making $100k.

        Making it into a flat tax would actually be a huge improvement.

        •  Okay, I think I get it now. (1+ / 0-)
          Recommended by:
          elwior

          So then FICA should be a true flat tax and perhaps its cap should be either raised or lifted then?

           All I want is for the rich to pay their fair share into it.

        •  Flat tax up to a point, but payout is progressive (4+ / 0-)

          The benefits are calculated based on avg. monthly income (highest 35 years, adjusted for inflation each year), and you get:
          90% of your first $732 avg. monthly income, plus
          32% of the next $3500 (approx)., plus only
          15% of any remaining up to $9,475
          (max $113,700/12 = $9,475/mo).

          So I consider it actually a very progressvie progrem. Still, I would like to see the cap lifted and a new 5% payout bracket for say, $113,700 - $250,000, and even a 1% payout bracket above that (i.e. 1% for the 1%ers), this would easily make it fiscally sound for probably forever.

          The numbers above are approximate, you can see the current percentages and cutoffs at ssa.gov, a very informative site.

          •  Exactly. One of the awesome parts of doing this (3+ / 0-)
            Recommended by:
            NoMoreLies, Laconic Lib, Mr Robert

            is that people who have really high incomes for just a few years (athletes, some musicians and actors, a writer who has two best sellers) would massively raise their life-time average monthly earnings because they'd be paying in on way more of it.

            It would be fairer to people whose careers have big dips and peaks.

            Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

            by JesseCW on Tue Jan 15, 2013 at 07:35:47 AM PST

            [ Parent ]

          •  I'm glad you consider it so (0+ / 0-)

            But putting aside the fact that we were talking about taxes:

            The life expectancy of a man (women are a bit better off) whose household income is $25k a year for his whole life is roughly 69 years at age 20. (That is to say, if he lives to age 20, and starts paying into Social Security, he will on average live to age 69. However, it's actually probably lower than that, that's just the average for the lowest third of the population, and $25k is on the low end of that.) So he'll collect those amazingly progressive benefits for a year (once the 67 retirement age kicks in, anyway), and that's if we don't raise the retirement age again. Or raise Medicare eligibility so that he dies even earlier.

            Meanwhile, the highest quintile has a life expectancy at age 20 that is approaching 80, for men. Better for women.

            Who is it that has the better deal again?

        •  Someone make 25k *gets* a lot more (0+ / 0-)

          for their money than someone paying 50k, and someone paying 50k gets a lot more than someone paying 100k.

          That's not regressive.

          Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

          by JesseCW on Tue Jan 15, 2013 at 07:33:27 AM PST

          [ Parent ]

          •  Sorry, have we stopped talking about taxes? (0+ / 0-)

            I thought we were on the subject of taxes.

            But in any case, you're wrong, because the life expectancy of a man (women are a bit better off) whose household income is $25k a year for his whole life is roughly 69 years at age 20. (Actually probably lower than that, that's just the average for the lowest third of the population, and $25k is on the low end of that.) So he'll collect those amazingly progressive benefits for a year (once the 67 retirement age kicks in, anyway), and that's if we don't raise the retirement age again. Or raise Medicare eligibility so that he dies first.

      •  What Fred said (3+ / 0-)
        Recommended by:
        Gjetost, elwior, Mr Robert

        If it were flat but not capped, it would not be regressive. It would be literally flat. But since it is capped at $113,700, it's regressive.

        •  Wouldn't raising or lifting the cap be good? (1+ / 0-)
          Recommended by:
          elwior

          From what I've read it would help Social Security if higher incomes had to pay into it. Unless I misunderstood that.

          •  you also have to look (0+ / 0-)

            at capping what rich people get back, there is currently a small step down system,  but you don't want to pay a billionaire a quarter million a year in social security benefits for life.

            •  It's not small step downs. (1+ / 0-)
              Recommended by:
              Mr Robert
              The benefits are calculated based on avg. monthly income (highest 35 years, adjusted for inflation each year), and you get:
              90% of your first $732 avg. monthly income, plus
              32% of the next $3500 (approx)., plus only
              15% of any remaining up to $9,475
              (max $113,700/12 = $9,475/mo).
              (thanks indyvet for typing that out)

              Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

              by JesseCW on Tue Jan 15, 2013 at 07:37:16 AM PST

              [ Parent ]

              •  but if you take away (0+ / 0-)

                the cap (the $113,700 figure above)  there is no long a cap on payout, so you need to add one or more steps.  The system is small, three steps,  if you eliminate caps, you may in fact want to look at a larger series of steps or an absolute maximum.

                •  Even as structured we would still come out ahead. (0+ / 0-)

                  If someone made a million a month for 40 years while paying (both portions) 12.4%, then we paid them 150,000 a month for 20 years, the system still transferred money to the less affluent.

                  Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

                  by JesseCW on Tue Jan 15, 2013 at 08:16:13 AM PST

                  [ Parent ]

                  •  talking about policy (0+ / 0-)

                    should include improving things, not just getting to break even.   I agree, remove caps, but I still think overhauling the step system makes sense at the same time.

                    •  That's not breaking even. That's adding (0+ / 0-)

                      money to the pool.

                      124k a month paid in for 40 years.  59.5 million dollars in.

                      36 million paid out.

                      33.5 million gained.

                      I don't care if rich people get giant checks every month.  It's fine by me (until we make the revolution).  It benefits everyone else.

                      Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

                      by JesseCW on Tue Jan 15, 2013 at 08:39:22 AM PST

                      [ Parent ]

                      •  well, maybe (0+ / 0-)

                        I think a little revolution now would be better than waiting for the big one.

                        If Thirty three million gained is good, why not gain forty or fifty?  That is a lot more people helped, a lot more COLA's paid, etc.    And the guy making a million a month or twenty or thirty million a month, really doesn't need that much back to fund his retirement.

                        People always blame the President for precompromising his positions, trying to give things away before the negotiation begins.   Maybe people here like that about him more than they admit.

                        •  You really don't get the difference between (0+ / 0-)

                          moving backward and moving slowly forward?

                          I'm far more critical of the President for actively agreeing to cause harm than for moving too slowly in trying to alleviate it.

                          Machine gun bullets became the bloody baptizers/ And the falcon 'copters don't care if someone's the wiser/ But the boy in the swamp didn't know he was killed by advisers

                          by JesseCW on Tue Jan 15, 2013 at 08:49:06 AM PST

                          [ Parent ]

                          •  moving forward slowly (0+ / 0-)

                            would be raising caps to recapture the erosion of salary subjected to the caps.  Removing the caps entirely is a new idea,  not one that is in force and being slightly tweaked.  If we are going to delve into new policy areas and recommend changes,  why draw little lines on brand new ideas?

                            As for doing harm, sometimes that is what the President does, other times it is just not pushing back against language or framing choices, sometimes it is not pushing new policy as far as he could.    

                            If we really want progressive changes, to revamp SS in a big new way, what's wrong with looking at both caps and steps?  Both have been part of the program since the beginning.  Both could have an effect on amounts of money available.   Both can be used to address the regressivity of the system.  Is it because the media talks about caps, people have heard of them, and many people don't even know about the steps because they get less attention?  Sheep or leaders, we don't have to think only about what we are allowed to think about by the right wing press.

                      •  I care. (0+ / 0-)

                        Why would you want rich people to get even more money? I mean that's good if Social Security is strengthened, but I don't like the idea of rich people getting richer or having more benefits than the rest of us. It seems more ironic in a way that rich people gain a lot from Social Security rather than less.

                         I want Social Security to benefit everyone equally, but the rich have to pay more into it. They shouldn't get bigger checks or benefits. That's not fair.

                •  Indyvet suggested some steps above (0+ / 0-)

                  I liked the 1% for the 1% step.

            •  Yeah, I don't want the rich getting more. (0+ / 0-)

              Would there be a way then to prevent the rich from getting more benefits or money?

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