What the hell, France?!

[civvver]

I sometimes wonder what would happen the if retirement age for Social Security/Medicare here got raised or a raise was proposed because, while I don't suspect riots, if there's one thing the elderly in America do, it's vote. I think at some point it may be necessary because those programs are in horrendous shape and in many ways resemble pyramid schemes to the point that no amount of taxation alone would save them. I really don't want to see what that battle is going to look like. Full of crap Mediscare ads are already far too common.

Actually they could easily be saved if they simply removed the caps on fica taxation. It's capped at somewhere around 110,000, meaning if you making a million dollars you only pay taxes on the first 110,000. It's like the opposite of a progressive tax and it just astounds me that it continues yet we have march on wallstreet protests over capital gains taxes. This is much more egregious in my view.

 

[bhsup]

Civver, you neglect to mention that your benefits after retirement are also only based on that max capped amount. So no, it's not really like the opposite of a progressive tax.

That said, I have said before that we should abolish fica, fund social security right out of the general fund, and just make the tax rate whatever it needs to be to fund it. (Yeah, I've also said disband it because it is clearly unconstitutional, but that's never going to fly so I give alternate solutions as well.)

 

[Light Cleric]

Actually they could easily be saved if they simply removed the caps on fica taxation. It's capped at somewhere around 110,000, meaning if you making a million dollars you only pay taxes on the first 110,000. It's like the opposite of a progressive tax and it just astounds me that it continues yet we have march on wallstreet protests over capital gains taxes. This is much more egregious in my view.

As bhsup points out, for that to work, it would have to blow up the whole idea Social Security in the first place. You would take it from "everyone receiving what they paid in" to an ordinary welfare program where people pay for others. Michael Resnick of the Social Security Adminstration explained long before I was born that the upper limit "was designed to assure that no one contributed directly more than the value of the protection he received."

Not to mention there's conflicting studies and projections as to what effect removing the cap would have.

There's also the issue that's been screwing us for a long time; politicians may well just borrow from the trust fund to pay for other things and forget to pay it back like they already do.

 

[peter grimes]

Actually they could easily be saved if they simply removed the caps on fica taxation. It's capped at somewhere around 110,000, meaning if you making a million dollars you only pay taxes on the first 110,000. It's like the opposite of a progressive tax and it just astounds me that it continues yet we have march on wallstreet protests over capital gains taxes. This is much more egregious in my view.

It's worse than that actually. It only applies to wage income. People who earn their income off of dividends, consulting, percentages, bonuses, etc don't pay a single penny into Social Security. No non-wage compensation is subject to the effort of our society to finance programs for the greater good

Civver, you neglect to mention that your benefits after retirement are also only based on that max capped amount. So no, it's not really like the opposite of a progressive tax.

Except for the fact that it's by definition means-blind. Which is fine, I suppose. But all too many poverty prevention programs during working life are means-tested which raises the question in my mind why we're not means testing retirement programs for after the working life? It's like people have rigged the system to restrict benefits to those who most need it and grant them to those who don't need them

Mind you, I'm not not advocating restricting SS to wealthy retirees. I actually think that ALL income should be subject to it, and payouts should be progressively scaled to help out the bottom more than the top, but every single worker (and I mean worker, not inheritor!!) sees the benefit. Skin in the game and all that..

That said, I have said before that we should abolish fica, fund social security right out of the general fund, and just make the tax rate whatever it needs to be to fund it. (Yeah, I've also said disband it because it is clearly unconstitutional, but that's never going to fly so I give alternate solutions as well.)

I might be OK with this, not really sure what it would mean. But I don't find constitutional arguments persuasive at all when it comes to helping people. I see the constitution as a document for restricting government's abuse of the power of the people. Helping people pay the rent and buy food isn't restricting them, it's enabling them - and thus (IMHO, IANAL) not subject to constitutional restriction.

 

[Formaldehyde]

It's worse than that actually. It only applies to wage income. People who earn their income off of dividends, consulting, percentages, bonuses, etc don't pay a single penny into Social Security. No non-wage compensation is subject to the effort of our society to finance programs for the greater good

Wherever did you get that notion? Independent workers, such as consultants, actually pay double what normal employees do because half the amount due comes from the employer. And I imagine that bonus money and commissions are also considered to be wages when it comes to SS. They just don't apply in many cases because the regular salary is frequently greater than the SS maximum amount.

But investment income is exempt. You could certainly make a case it shouldn't be.

 

[peter grimes]

Only if it's reported.

 

[keli]

Whats the problem ? Just separate the producing department from the management, put them into different buildings and problem solved.

 

[civvver]

Civver, you neglect to mention that your benefits after retirement are also only based on that max capped amount. So no, it's not really like the opposite of a progressive tax.

That said, I have said before that we should abolish fica, fund social security right out of the general fund, and just make the tax rate whatever it needs to be to fund it. (Yeah, I've also said disband it because it is clearly unconstitutional, but that's never going to fly so I give alternate solutions as well.)

Well it is a defined benefit program but based on a lot of factors you will not necessarily get out of it what you paid in and people receive a wide range of benefits. This is because to max out the benefits you don't have to make that much money yearly to get enough social security credits. After a certain point you get less and less back so if you're a single worker who makes close to the cap then I think you actually come out behind. So the way the intended it to work is not the way it works today. I'm fine with it being a defined benefit like insurance but if it's a percentage based just make it fair and remove the caps. It would solve the funding issues.

But anyway I was mainly bringing it up as a point about france and how they definitely work less, probably less work week hours as well. In the US 67 isn't exactly a real retirement age because most people can't retire on social security alone so your individual pensions/investments/savings really determine your age of retirement, but 67 is the government number.

 

[Formaldehyde]

Only if it's reported.

You mean only if they don't commit an incredibly serious felony, which will land them in the big house once it is discovered?