quote:

Originally posted by Gustofer:
and means testing may be instituted (as it should be)

Why should it be means tested? Do you really buy into this crap?

It was sold to the American people as an insurance policy. Hell, the word insurance is right in the name. Are you also ok with other mandatory insurance policies being means tested? You wreck you car, but we need to see your tax return before we honor your claim. Really? Your house burns down, but you’ve got a good income and a bunch of assets, so you’re on your own. Oh, and don’t forget to pay that mandatory premium.

You want to means test the benefits? Fine, then give me the option to opt out of this “insurance.” Otherwise, call it what it is, a government mandated socialist redistribution system. I’m just really surprised that such leftist ideology is now accepted.

I do not support means testing of Social Security. Why turn it into a welfare program? I'm fine with wealthy and successful people collecting Social Security just like everyone else. After all, they paid in. However, I am also okay with SS benefits being subject to taxation for the higher income folks.

quote:

Originally posted by Fed161:
Why turn it into a welfare program?

It's already a welfare program.

quote:

I'm fine with wealthy and successful people collecting Social Security just like everyone else. After all, they paid in.

As am I. As long as it is only what they paid in.

quote:

Originally posted by Gustofer:

[QUOTE] As long as it is only what they paid in.

I ran the numbers and figure I'd need to live to be well North of 100 to recover what I've "invested" in Social Security since I joined the tax paying work force at age 15. I'm almost 72, work full time, and continue to pay into the system.

quote:

Originally posted by Gustofer:
Life expectancy has increased 20 years since SS was instituted. Thus the eligibility age should be increased to match that. Expecting the government to essentially pay welfare for up to 30ish years to every swinging dick in the country is ridiculous, yet it sounds like that is what you are advocating. The vast majority of people "get back" FAR more than they ever put in.

Social Security tax rate was originally 1%. It was a very small burden on workers, and only designed as a small benefit.

Today the worker is taxed at 15.3%. For the vast majority of Americans, they will pay this rate (or even higher if/when fedgov increases the rate) on their entire life's labors. It is grossly inaccurate to call it a welfare program considering how much each worker has to put in.

Though there is no simple formula to calculate the return rate, it is a big distortion to say that people "get back FAR more than they ever put in". You're ignoring what could have been earned on the money had the worker held onto it. The return on the tax is generally very low for the average person, and sometimes even negative for higher earners. For those who die before receiving any check the return is -100%.

There are also inflection points where Social Security benefits reduce for higher earners. Social Security is taxed if the retiree has income, which includes withdrawals from retirement accounts, which yet again penalizes those who were productive in their working years.

I am "getting back FAR more" than I ever put into my 401k, IRA, and home (which constitutes a major reservoir of wealth for many retirees). My actual rate of return is many times higher on those than on my Social Security.

quote:

Originally posted by Gustofer:
means testing may be instituted (as it should be)

Why should those who have paid more into SS during their lives get back less? Are you familiar with "bending the curve" or "inflection points" in the program? Higher earners pay more in taxes while they work. They typically have saved more than low earners, and thus they will have income in retirement which then triggers taxes on their Social Security benefits.

IOW, higher earners pay more while working and get progressively penalized in retirement.

How is this right or fair?

quote:

Originally posted by Fly-Sig:
Today the worker is taxed at 15.3%.

Only if self employed. Otherwise it's 7.65% for both SS and Medicare.

quote:

Originally posted by Fly-Sig:
Why should those who have paid more into SS during their lives get back less?

Why should they get back more than they put it? Because everyone else is?

quote:

Originally posted by Gustofer:

quote:

Originally posted by Fly-Sig:
Today the worker is taxed at 15.3%.

Only if self employed. Otherwise it's 7.65% for both SS and Medicare.

Tell me where the employer's contribution comes from if not from the employee's productivity. IOW, explain how the employer's contribution does not come from the employee's pay.

In my case I retired in 2017 collect SS on Medicare and work part time. I still pay SS and Medicare taxes on my earnings. And still pay for my Medicare Part B coverage.

As I see it I’m paying a tax on my present income to pay for my SS and Medicare benefits that I earned over my years working full time up to 2017. In my convoluted way of looking at it I’m paying myself to be retired!

quote:

Originally posted by Gustofer:

quote:

Originally posted by Fly-Sig:
Why should those who have paid more into SS during their lives get back less?

Why should they get back more than they put it? Because everyone else is?

Under what philosophy should the government confiscate 15% of a person's lifetime earnings and not provide a reasonable rate of return comparable to what the private sector would provide?

If a worker dies before drawing down the balance to zero, why doesn't the remainder go to his estate?

If the government is earning interest on the monies they take from workers into Social Security, why isn't the worker entitled to those earnings? This is to your repeated complaints that people are getting more back than they put in. The government mankes money on those taxes for decades, so why isn't the worker entitled to them?

Why should a person who was taxed at a higher rate due to their income while working get a lower rate of return on it than a lower wage worker? These are the inflection points in the curve, where exactly that happens - the more you earn the more taxes you pay but the less you get back.

Why should a person who has saved well for their retirement pay taxes on their Social Security benefits? Taxing the SS check is a reduction in the benefit, and it can be a big % reduction.