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View Diary: Oregon senator joins the call for increasing Social Security benefits (130 comments)

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  •  That ignores the bend points... (2+ / 0-)
    Recommended by:
    ColoTim, ferg

    Someone paying in based on an income of $1M a year would, under the present formula, get higher benefits than someone paying in based on $117k, but they woudn't get 8-9x the benefits, any more than someone paying in on $117k gets 4x the benefits of someone paying in on $30k.

    http://www.ssa.gov/...

    Indeed, since the law would have to change to remove the cap on taxes, it would be easy enough to change it at the same time to either cap the benefits (or even on creditable earnings), or to add a couple more bend points.

    A better question is what impact should a few years of very high income have on the average; as rare as people who have very high incomes for a few years are, even fewer make very high incomes throughout the 35 year period on which income is calculated anyway. A few years of very high income won't raise the average earning that much, but depending on the income trajectory, it could still have a big impact on benefits even with a hard cap on benefits.

    •  A means test for benefits? (0+ / 0-)

      I'm sure you know where that roads leads to.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Fri Mar 14, 2014 at 03:59:07 PM PDT

      [ Parent ]

      •  Huh? (0+ / 0-)

        Where do I raise the idea of a means test?

        (Ignoring that the formula for taxability of benefits -- already there -- and my mention way up thread that I think we'll eventually get one, like it or not.)

        Neither of the easy proposals for how to handle the extra tax revenue -- capping benefits or capping creditable earnings -- is a means test, as it has nothing to do with how much money you have or earn in retirement.  It's just two ways of saying "there's a maximum payout, regardless of how much you paid in taxes."

        Personally, being a borderline socialist, I'd be tempted to entirely unlink benefits from earnings, and send everyone who paid in for enough quarters and made it to normal retirement age the same check each month.  Don't see it happening, obviously.

      •  the bend points are already in SS (1+ / 0-)
        Recommended by:
        nkedel

        So it's not really a change.

        And consider Medicare.

        Not only does Medicare not have a cap, but it also taxes capital gains, but the benefit's worth is the same for a rich retiree as for a middle-income.

        •  In the sense that the multiplier for a cap is 0% (0+ / 0-)

          While a bend point might have a 15% multiplier. But it is a change.

          .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Mon Mar 17, 2014 at 01:14:08 PM PDT

          [ Parent ]

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