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View Diary: Why Now is the Time to End the Social Security Tax Loophole (87 comments)

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  •  Social Security is very highly progressive (6+ / 0-)

    The benefit per dollar paid in is 6 times greater for wages earned at the lower income end than at the higher wage range.  In addition, the benefits are not subject to income tax for lower income beneficiaries, while taxed for high income beneficiaries.  For the very wealthy the benefits after tax are subject to estate tax making the net after tax payout lower income people receive about 25 times the rate the wealthy receive.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Tue Mar 26, 2013 at 12:36:00 PM PDT

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    •  Not really what Coffee meant (4+ / 0-)

      Not that I speak for coffee, but the majority of folks advocating for cap removal dont even know about what you just commented to.

      In fact a significant minority dont understand that capping benefits is a means test. And that removing the cap creates a huge monthly check for the uber rich.

      SO what do you think of coffees' larger point?

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS 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 Mar 26, 2013 at 01:50:59 PM PDT

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      •  It would be possible (2+ / 0-)
        Recommended by:
        SilentBrook, voicemail

        to both raise the wage base and cap benefits.

        "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

        by Old Left Good Left on Tue Mar 26, 2013 at 02:25:37 PM PDT

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        •  What would you call it then? NOT Soc Sec (4+ / 0-)

          because you've designed a completely different welfare program.

          Too late for the simple life, too early for android love slaves - Savio

          by Clem Yeobright on Tue Mar 26, 2013 at 02:36:03 PM PDT

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          •  Silly (0+ / 0-)

            I think they tweaked the wage base under Reagan, right? Did they have to change the name of your welfare program? If you raise the wage base and benefits, but decrease the "multiplier" for benefits as the wage base goes up, it's a modification. Most of us would still call it Social Security.  

          •  The corporate kleptomaniacs have (1+ / 0-)
            Recommended by:
            Calamity Jean

            for the past thirty years, stolen all productivity gains.
            No one, in crafting SS, expected the sociopaths that run corporations to abscond with all productivity. It was expected wages would keep pace w/productivity gains.

            Now some people feel that by requiring those klepto's to return some of their stolen gains by contributing to SS above the current cap would be wrong.

            What about the welfare these corporate terrorists have stolen for the past thirty years. It's time the cap was increased and in no way would that be turning SS into welfare.  The klepto's have been on welfare for too long and some people here think that doesn't matter or shouldn't be considered in the equation.

            "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

            by BrianParker14 on Thu Mar 28, 2013 at 08:40:14 PM PDT

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        •  I'm not sure that turning the upper-middle class (2+ / 0-)
          Recommended by:
          coffeetalk, Clem Yeobright

          and the wealthy against SSI is good for the program's long-term stability.

        •  Means testing is welfare, from a legal standpoint (1+ / 0-)
          Recommended by:
          Clem Yeobright

          I just think that the 2033 is unrealistic. SO lets create jobs and raise the min wage instead.

          In the Trustees low cost scenario, SS is good thru 2090

           photo SStrustees2090-1.png

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS 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 Mar 26, 2013 at 07:49:32 PM PDT

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      •  The exact proposal here may not be optimal (1+ / 0-)
        Recommended by:
        Pluto

        but I do wish that some of the creativity that is going into the currently discussed variants of a "Grand Bargain" in Washington was being applied to actually extending the viable lifetime of Social Security (as well as Medicare and Medicaid), while not weakening the protections they currently offer to the poor and elderly. Or (we can wish) truly strengthening the social safety net they provide. Indeed it should be possible to do that, and the only reasons it is painful and difficult, and has not been done to date, is the resistance to taking in additional revenue from high wage earners.

        •  In the more advanced developed nations (1+ / 0-)
          Recommended by:
          Clem Yeobright

          Social security is received in the same way. However, those in need also receive "social support" checks to bring their income up to a level of decency.

          This is also true for working folks. Those with low-wage jobs are supplemented so that they are able to provide decent lives to their family.



          Denial is a drug.

          by Pluto on Tue Mar 26, 2013 at 05:19:40 PM PDT

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    •  Money is a public utility produced by the federal (2+ / 0-)
      Recommended by:
      SilentBrook, Pluto

      Treasury. The only reason to levy federal taxes is to insure that the currency keeps moving and is recycled through the Treasury, instead of more having to be produced. Issuing ever more currency to compensate for what is scarfed and hoarded, would invalidate the measuring function of the dollar. That is, both the volume of dollars used and the rate of turnover provide important measurements of economic performance.

      We organize governments to deliver services and prevent abuse.

      by hannah on Tue Mar 26, 2013 at 02:23:48 PM PDT

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      •  This is the system that helps nations (3+ / 0-)
        Recommended by:
        Clem Yeobright, DSPS owl, hannah

        ...avoid income inequality and a wide gap in the GINI index. The US had it once. It lasted 50 years.



        Denial is a drug.

        by Pluto on Tue Mar 26, 2013 at 05:22:01 PM PDT

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      •  Money is stored labor. (0+ / 0-)

        While productivity has increased it has all been kept by the corporate kleptomaniacs and workers have been denied the benefits of their labor and intellect.
        If productivity gains had been adequately shared, SS would be in fine shape.
        Instead the corporate terrorists and some here believe that by increasing the cap would be hurting the sad wealthy who want to hurt workers every way possible and keep every penny workers create for themselves.

        "I freed a thousand slaves, I could have freed a thousand more if only they knew they were slaves" Harriet Tubman

        by BrianParker14 on Thu Mar 28, 2013 at 08:45:28 PM PDT

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    •  How did you get the estate tax into this? (1+ / 0-)
      Recommended by:
      i dont get it
    •  That's not progressive. (0+ / 0-)

      Progressive doesn't mean "better for the poor". It means "f(x) rises faster than linear with x".

      Social Security has a flat benefit (up to the cap; incomes above that do not exist as far as SS is concerned).

      The benefit between benefit and inflation-adjusted best-working-years average contribution is regressive, that is, the benefit grows more slowly than linear as the contribution increases.

      It's still a better deal, dollar-for-dollar, for the lower end of the contribution scale than the top end, but let's be clear what "progressive", "flat", and "regressive" actually mean.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Tue Mar 26, 2013 at 04:44:58 PM PDT

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      •  Sorry, has a flat contribution, regressive benefit (0+ / 0-)

        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

        by Robobagpiper on Tue Mar 26, 2013 at 06:19:48 PM PDT

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      •  Robobagpiper, progressivity math for taxes is (3+ / 0-)
        Recommended by:
        coffeetalk, Clem Yeobright, Roger Fox

        different than for benefits in economics.

        Here is a paper from NBER (National Bureau of Economic Research - BTW this is the trusted organization that officially decides when recessions start and end) The Prosgressivity of Social Security. in reading this paper you will see what I wrote is consistent with this paper.

        Progressive benefits are different than progressive taxes.  What you described as progressive was for taxes.  For progressive benefits "it means "f(x) rises slower  than linear with x".

        Social security does not have a flat benefit as you incorrectly state.

        You wrote

        The benefit between benefit and inflation-adjusted best-working-years average contribution is regressive, that is, the benefit grows more slowly than linear as the contribution increases
        You misidentify the above as regressive, when this is actually progressive when used to describe benefits.  

        To be progressive for taxes, higher incomes mean taxes increase faster than linear.  For benefits however, progressive means  benefits rise slower than incomes.  Progressive means higher incomes pay faster than linear with income and/or receive benefits more slowly than linear with income.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Tue Mar 26, 2013 at 06:45:02 PM PDT

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        •  Great explaination- thanks (2+ / 0-)
          Recommended by:
          nextstep, Clem Yeobright

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS 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 Mar 26, 2013 at 08:06:14 PM PDT

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        •  I didn't state that SS has a flat benefit. It has (0+ / 0-)

          a regressive one. That I got from SS' own site.

          Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

          by Robobagpiper on Wed Mar 27, 2013 at 03:09:53 AM PDT

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