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View Diary: Take Social Security off the table (159 comments)

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  •  You recall really poorly (1+ / 0-)
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    howd
    As reported by CRS, "Since 1982, the Social Security taxable earnings base has risen at the same rate as average wages in the economy. However, because of increasing earnings inequality, the percentage of covered earnings that are taxable has decreased from 90% in 1982 to 85% in 2005. The percentage of covered earnings that is taxable is projected to decline to about 83% for 2014 and later. Because the cap was indexed to the average growth in wages, the share of the population below the cap has remained relatively stable at roughly 94%. Of the 9.5 million Americans with earnings above the base, roughly 80% are men and only 9% had any earnings from self-employment income" (Mulvey 2010).
    socialsecurity.gov

    Am I right, or am I right? - The Singing Detective

    by Clem Yeobright on Tue Nov 13, 2012 at 03:30:51 PM PST

    [ Parent ]

    •  Dude JFromga is right, the income (0+ / 0-)

      CAP is at its lowest point in years, about 84% according to your link, traditionally it was at 90%.

      And thats after the COLA last year, when the income CAP was lifted from 106k (83%) to 110k (84%). Lifting the income CAP to 90% might mean as much as $4,700 increase to the max annual benefit. IIRC the CBO scoring tells us this adds a little bit of revenue over benefits paid.

      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 Tue Nov 13, 2012 at 04:19:56 PM PST

      [ Parent ]

      •  For the record (0+ / 0-)

        The cap in 1990 was 51,300 = 90,827 in 2012 $
        in 2000 76,200 was 76200 = 102,400
        in 2004 87,900 was 87900 = 107,680
        in 2013 113,700

        so jfromga is not correct.

        Am I right, or am I right? - The Singing Detective

        by Clem Yeobright on Tue Nov 13, 2012 at 04:34:18 PM PST

        [ Parent ]

        •  Clem, Clem, Clem (1+ / 0-)
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          Clem Yeobright

          You posted this comment, saying the same thing as the other person.

          http://www.dailykos.com/...

          Its by %

          Your own link said PERCENT.......

          the percentage of covered earnings that are taxable has decreased from 90% in 1982 to 85% in 2005. The percentage of covered earnings that is taxable is projected to decline to about 83% for 2014 and later.
          1982=90%
          2012=84%

          84% is as low as its been in years.

          You two are saying the same thing using different language. Lets save our energy for the GOP.

          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 Tue Nov 13, 2012 at 05:22:47 PM PST

          [ Parent ]

          •  Hearing you. (1+ / 0-)
            Recommended by:
            Roger Fox

            Joe/Joan from Georgia wrote:

            As I recall, in real dollars, adjusted for inflation, the caps are actually at about the lowest point in a real long time.
            and he/she is wrong. So what?

            You and I have been here before, and I - more than you, to your credit, I suppose - get exasperated when people here post:

            Oh look! Something shiny over there in the trees! It may be gold or silver! Let's tax it! And call it Social Security!
            I'm waiting for the proposal that we tax alcohol and tobacco an additional 6.2% and solve the [non-existent] Social Security problem forever!

            I'm not afraid of our enemies; FSM save us from our friends.

            No?

            Am I right, or am I right? - The Singing Detective

            by Clem Yeobright on Tue Nov 13, 2012 at 05:33:03 PM PST

            [ Parent ]

        •  \ this is what was said (0+ / 0-)
          As I recall, in real dollars, adjusted for inflation, the caps are actually at about the lowest point in a real long time.
          Was that said 100% accurate?   Well maybe not 100%, but its close.

          Today if we taxed at 90% the SS income CAP would be about 186,000. See table 3

          http://aging.senate.gov/...

          But we dont, today the cap is  at about 84%, 110,100.

          The Trustees dont use normal inflation adjustments because they dont account for increased income disparity.

          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 Tue Nov 13, 2012 at 05:52:47 PM PST

          [ Parent ]

    •  yes I used the wrong measuring (0+ / 0-)

      stick but reached the right conclusion, I should have looked it up.

      If we kept the caps so that the same percentage of the working populace paid into the system, then the cap would be substantially higher.  Not a change in policy, but resetting the policy to what it has historically been.   That would not turn the system into a welfare system.  It would produce more revenue.  And yes,  higher earners would get bigger checks, and they would live longer.  Which is why another step or two could be added.  

      While I may agree there is absolutely no problem with SS now,  it is not in fiscal crisis.   It will eventually need some adjustment just to remain as fair as it was, ie, top earners drop out too quickly and fewer are paying in on a substantial portion of their incomes.

      No one here has suggested creating new taxes totally unrelated and calling it social security.

      Public polls show people would rather pay more withholding tax and leave both Medicare and Social Security in tact.  I don't think anyone is trying to argue for fundamental ways to alter these programs at this blog.  Merely tweaking the income streams in ways that are consistent with the original program.   I fail to see how raising additional revenue using the traditional structures is the cause of such alarm and angst.

      Over the long term, job growth, younger workers finally making it into the job market instead of being shut out, good wages, will increase revenue as well.  We need to pursue all fronts.

      •  Money FROM higher cap goes TO higher earners (0+ / 0-)

        Raising the cap doesn't affect the benefits of those below the cap, although it MAY result in more of their contributions going to their bosses 30 years after they're dead.

        The cap is not a problem, except that it's too high.

        Am I right, or am I right? - The Singing Detective

        by Clem Yeobright on Wed Nov 14, 2012 at 08:04:41 AM PST

        [ Parent ]

        •  since current revenues (0+ / 0-)

          don't go to those who pay in now, but to those receiving benefits currently, raising revenues now covers current shortfalls now.

          What you are trying to tell me, by yelling "You're stupid", not explaining, never a good way to gain allies or even educate someone, is that it will increase deficits in the out years making the current projections of shortfalls worse. I had not seen that argument before or thought of it in that way.

          If you have some sources for these projections I would still like to see them.

          •  Can you project medical innovation? (0+ / 0-)

            Where would the SSTF be today if the cardiac bypass had not been developed, if thousands and thousands of workers were still dying in their 50s before they collected a penny in SS?

            What CAN be projected is that any increase in life expectancy will redound more to higher-income people.

            SS is intended to replace income at a comfortable level, not at all levels. Let's stick with that principle.

            Am I right, or am I right? - The Singing Detective

            by Clem Yeobright on Wed Nov 14, 2012 at 09:37:37 AM PST

            [ Parent ]

            •  I am a math person (0+ / 0-)

              in some respects.   I want to see what lower caps do to the ability to fund current obligations, as well as projections on future obligations.  I acknowledge that projections are suspect because the world is not covered in horse dung right now.  Nevertheless,  for a short/medium term decision pattern,  we can see what various proposals will do with real numbers.  I find those more convincing than discussions of bypass surgery or horse dung.

              •  There's a huge amount of data at ssa.gov (1+ / 0-)
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                jfromga

                Am I right, or am I right? - The Singing Detective

                by Clem Yeobright on Wed Nov 14, 2012 at 10:06:58 AM PST

                [ Parent ]

                •  thank you for the page (1+ / 0-)
                  Recommended by:
                  Clem Yeobright

                  the report addresses the issue of subgroups without modeling it,  clearly minorities/lower income workers, etc.  may show a different pattern.

                  It would seem that payments of benefits is mildly progressive, less so now than originally.  The proposal to take caps back up to the 90% still comes out as more progressive than the current projections.   The  indexing of benefits would be a small amount more progressive than the current scheme as well.

                  The model did not look at lowering caps, so I still don't know if that would be even more progressive,  but it doesn't seem to be suggested by the progressive nature found for raising the caps.  

                  I will read the article and study on it some more.

                  Do you have a policy objection to benefit payouts being overalll progressive, ie,  lower income people getting a greater return for money paid in (pretermitting the issue of minorities being especially shortchanged for which there is no data in this report) ?

                  •  My concern is 'welfare-ization' of SS (0+ / 0-)

                    I think the system is fine as it is; the 15% bend-point is scarcely 'fair' but it is accepted as part of the income-replacement formula and that's what counts.

                    I worry that an even lower 'bend-point' would break the principle, that it would look just too cynical. What do you call a contribution that generates no (or a tiny) associated benefit? A tax.

                    There's nothing wrong with providing old-age relief via a tax, via the income tax; I think we should do more of it and we might be able to relieve some of the pressure on Medicaid, which pays for a nursing home but not staying home. But SS is still contributions -> benefits, and we're foolish if we futz with that.

                    Of course we can't really lower the cap because the fiscal effect on the current budget would be prohibitive. As you've pointed out, we need today's collections to fund today's payments. But raising the cap outside the current calculation doesn't provide any long-term benefit that I can see.

                    In summary: SS has a mystique about it, rightly or wrongly, that must be preserved. That's all I'm concerned about.

                    Am I right, or am I right? - The Singing Detective

                    by Clem Yeobright on Wed Nov 14, 2012 at 12:18:56 PM PST

                    [ Parent ]

                    •  but do we let perception (0+ / 0-)

                      rule reality.  The numbers in the report show earliest cohorts receiving a redistributive no. of .3,  current is about .15,  raising caps back up to the traditional cut point,  goes about .19 (all from memory so I might be off a little),  the scale is 0-defined contribution plan effect (dollar in dollar out)- to 1-redistributive as in a fixed benefit regardless of contribution plan.  So the plan, untouched or the tweaks as described in the report always was and remains closer to defined contribution plan, and very mildly progressive (redistributive).

                      Personally, I don't think a slightly redistributive plan, anything that stays below .5 turns this into welfare.  We are far from that point now, and would stay there even with some tweaking.  IF people simply didn't know how the system works, but are pretty happy with the way it was and is traditionally, surely it isn't going to suddenly become welfare in the average American's mind?

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