Bill to end taxes on SS reintroduced

Personally, I’ve never heard myself snore or wake up from Apnea, but Mrs Aging wants me to talk to you when you get it figured out.

 

We have our in office training with the Rhinometer and Pharyngometer the 25th and 26th. Excited to actually start helping people. Sleep studies are so much easier to do as well for people. We have done a couple with the Watch PAT we got. And they are enhancing things that make it even easier.

 

It will actually hurt a lot of seniors. Any time you do something that increases the imbalance of Social Security, the system will take action to correct that imbalance. If Trump makes SS tax-free, benefits will have to be cut at some point in the future. This benefits wealthier SS recipients at the expense of the less wealthy recipients. Currently, people who do not get a lot of SS payments don't pay anything in taxes, because taxes are progressive and people with low incomes pay nothing. They get no benefit from making SS tax-free because they aren't paying any taxes now. This helps wealthier recipients only.

 

This is the deal - if shoring up social security was the only fiscal issue we had to deal with then yes, eliminating the cap may fix it. But we frequently hear from those on the left that raising taxes on the wealthy is the answer to social security, to single payer health care, to reducing our 2 trillion dollar deficit, an expanded refundable child tax credit, etc etc. Increasing taxes on the wealthy can probably pay for one of those things, but that is it.

The current top federal rate is 37%. Democrats want to raise it back to 39.6% (which I support). The ACA tax adds another 1% (0.9). CA has a top state income tax rate of 14.4%. Then add 1.4% Medicare tax paid by the employer, which is really a tax on the employee. So where we are now is 55-56% in CA. You propose adding about 6.25% employee for fica and 6.25 employer, or 12.5 total. So now we are at around a 68% top tax rate, and we have done nothing to reduce the deficit, to fund single payer health care or any of those other things those on the left want to do.

The problem with a 68% tax rate is that it will encourage avoidance, non compliance or even disincentivize work. The Laffer curve does exist, it is just exaggerated by right wing supply siders.

 

Many of those people were working minimum wage jobs, and the government has not raised the federal minimum wage in 18 years. So, basically, Trump is screwing them twice: he has not increased their salaries to compensate for inflation, and then he is going to cause Social Security to cut benefits in the future by reducing taxes on people that don't need SS as much, causing a deficit in the system, which the system rectifies by cutting benefits. BTW, we are expecting a 25% reduction in benefits in 2034 because people are living longer.

Taxing SS benefits (for wealthier people) was one way that Congress chose to deal with the imbalance caused by people living longer. You still get part of your benefits tax-free, and then pay taxes on payments greater than that maximum.

 

America has played the hokey-pokey for too long with SS.

end it.

Burn the system to the ground and let Americans figured out what they want afresh. Reasonable people can decide what a social safety net should be in this time and age.

We are going to see a massive move towards automation, robots, and AI. Americans need to prepare.

IMO, younger Americans should be trading in a future promise of “retirement” SS for a UBI now.

 

For all of its flaws SS is considered one the better and more sustainable government retirement programs in the world.

 

You wouldn’t know that from the constant attack by the MAGA. They hate FDR.

It’s a loser issue because you can’t take SS from Republicans voters that paid in. It would take a lame duck like Trump to burn it down and start afresh.

His best bet is to turn SS fund into a Sovereign Wealth Fund and use the earrings as a “Freedom Dividends” to all citizens.

America is whistling past the job grave yard and the funding of a viable SS.

 

There is no social security fund in reality. What remains is a bunch of bonds of the general fund held by the social security fund, and the general fund is a much bigger bunch of bonds held by the public.

 

No one would be paying an effective tax rate of 68% or anywhere close to it unless they have a terrible accountant. The 39.6% is the top marginal rate, as is the 14.4% for California.

 

Implementing sleep in your office? How much do you charge for naps and is it covered by my dental insurance?

 

Who knew we needed to spend $70K on special equipment when I could have gotten high end consulting from too hot…

Well played by the way!

 

Al Gore’s “lockbox” sounds pretty conservative.

 

Did I say effective tax rate? I was speaking of marginal rates.

is there a problem with my math? A tax accountant can’t just reduce marginal rates on ordinary earned income.

 

You said 'The problem with a 68% tax rate is that it will encourage avoidance, non compliance or even disincentivize work.'. No one will be paying a 68% tax rate.

 

Millions will die if you take away Social Security. Most people only have a few thousand dollars saved up for retirement. Without SS, they would run out of money in the first five years of retirement.

UBI hands money to people most physically able to earn their income. And it gives them a little less motivation to find a job or work more hours, because their basic living expenses are provided by the gov't. Not everyone has great ambitions in life. Many people would blow their UBI on lottery tickets.

 

Some more detail on the SS situation:

A Big Social Security Change Proposed by President Donald Trump May Be Bad News for Retirees

 

concepts of a plan. Will leave the details for someone else.