I think the conversation is a good one to have. There were a lot of issues discussed that lacked any context in the sound bites. Is your question why is social security taxed? I can answer that but I’d like to see what you are asking before I waste time answering.
When SS was created the average lifespan in the US was something like 63. The program was fine at that point. But 80 years of gutless politicians who cared more about their jobs than the country did nothing to adjust it as times and demographics changed.
as usual, I blame him for what he & he alone did or failed to do. 1. tax SS 2. put in auto increases on income subject to the SS tax which we live with to this day 3. make 0 attempt to abolish it. BIG GOV gonna BIG GOV
Well I am not sure but maybe you understand how stupid the program was as implemented? Seriously…it started 1% employee 1% employer on $3K. Now 6.2% employee 6.2% employer on $168,600 in 2024. Based on inflation it should be $70Kish. We are taxing 6.2 times what we did on double what we should and still it is unsustainable. FDR was and is the root of the problem with this disaster. And he threatened to stack the court over it. Worst president in our history. Your kids and grandkids will finally feel the brunt of it. So I guess it does not matter…
Completely fair post here. He should have abolished it. We are in full agreement there. It is the one big negative from his presidency…
1? You're a fan of his 11 tax increases? You are a fan of his increasing the fed deficit by 68% - most of all the presidents in our life? you are a fan of his more than doubling farm subsidies? You are a fan of him increasing protected products by 100%? You are a fan of him increasing fed spending 90%? you are a fan of mortgage rates that were never single digits? You are a fan of an avg UE rate of 7.5%? You are a fan of inf being 4.4% when he left office? He unequivalently made government bigger in size & in scope.
I am a fan of his ability to lead this nation in the right direction with no doubt leadership that America is Great and the leader for Freedom. I have no problem recognizing there were things that could be better. That is what we try to do every day. Be better than the day before. But I also recognize we are dealing with past issues and and trying to correct them. It is not as simple as just saying this will happen. Life and Politics are complicated. Shoot business is complicated. Dentistry is complicated (if we want to look at it on that level for me and our family and what we are doing). I never thought we would be where we are today and I know time will not allow us to finish but we will build so the next generation can build on us. It really is amazing the difference in Dr. Quinn Family Dentistry June 1, 2008 to today. It has been an amazing ride and the gains in education on oral health from TMJ/sleep/heart disease/etc is becoming more and more clear. We are more excited than ever with the shift to Integrative Dental Medicine. Reagan was the last Great Leader from Diplomat level.
Why is social security taxed? At some point they made 50% of the benefits taxable, because the employer side of contributions, essentially half, was tax deductible by the employer and not taxed to the employee, so in essence it represented income that was not taxed. The taxation of half of that remedied thst. Eventually an 85% bracket was added. I assume that was primarily just to fund the system. You have people railing against taxing social security but then wanting lower benefits for higher income retirees. What’s the difference? They get you to the same place. You have dumb liberals who are against social security cuts because they are a benefit cut and dumb republicans who are against taxing social security because it is called a tax. In the end they mostly net to the same thing to the retiree. It would not be terribly difficult to fix the system if you had some modest political courage. As of right now around 2033 the system will be only able to pay out 75 cents on every dollar promised. That is a problem, but that doesn’t mean SS is going away. It’s still 75% there even with no changes. Either increase taxes on higher earner SS benefits, or modestly lower benefits for the highest earners. Again they are essentially the same thing. Doing this makes sense in that the lifespan of upper incomes has increased significantly, while the lifespan of below average earners has not. Tweak the COLA to a chained CPI that is slightly lower and slightly more accurate. raise the retirement age a year, maybe 2 over a couple of decades. increase the income cap of FICA. Previously the FICA taxed about 90% of all wages. As income inequality widened, which was not planned for, it dropped to something like FICA taxing only 82% of all wages. Increasing the cap to where it taxes 90% again would go a long way to plugging the hole. None of the above it phased in over many years would be terribly burdensome to anybody. But people would rather yell and scream hyperbolically over the issue.
You are kind of blasting him from all angles here. So from the above post can I assume you did not support Volcker interest rates that lowered inflation? You are going to blast him for tax cuts but then blast him for subsequent increases? You are going to blast him for increases in defense, but don’t mention that probably hastened the fall of the Soviet Union and the following “peace dividend” and lower deficits in the late 90’s? I agree with some of the excesses you have pointed out, but I think you have to put some of them in context. Reagan’s plans were to decrease non defense discretionary spending. But due to congress he could only roughly flatten it. Reagan’s plan was 10% tax cut for 3’years. Which turned into 10/10/5 (or 5/10/10, I forget). Then congress added bracket indexing and top max rate of 50% (which I support). Inflation actually fell much faster than they expected, which magnified the impact of the bracket indexing and increased the deficits.
Kick it down the road as we have always done at our kids and grandkids expense. Sad but par for the course!
Because in addition to SS as originally designed, things like survivor benefits and disability were added later. And that is in addition to the extended lives as time went on. And even with that, it ran surpluses in like 85 percent of its first 70 years. But now you also have the demographic crunch of the boomers retiring, and many of the high wage jobs needed to pay the bills leaving with them. A barista at Starbucks can’t cover the future note of a union person who made 50 an hour somewhere. Had we addressed it a decade ago, it would have been a bit painful but manageable. Every year that goes by now makes whatever is coming more and more draconian.
I have tried to find why the income tax on SS goes into the general fund and does not go back into SS fund as a pay-for when evaluating solvency. It is odd that when real dollar SS benefits are reduced by income tax, there isn’t a corresponding impact on projected solvency. 50% makes sense… the 85% cuts deep assumes a lower tax bracket at the retirement age of the beneficiary. As an aside, I found it comical that Sir Tommy of Tuberville was proud of his coaches Union LOL.
Theoretically the employee portion was included in income taxable wages when paid in. The employer portion was not taxed yet, so 50% makes sense on payout of benefits. Raising to a max of 85% is effectively a means testing back door.
Well you cover some of the problem. A barista might actually need “SS” where a union person making $50 and hour has no need for SS with their pension. The system put in place was a complete disaster and why fdr is one of the worst Presidents this country has ever had. Hard to find one worse!
