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This is exactly how social security works now. My wages are handed to those who are retired.
This is how our entire tax structure works. Are high income earners using more government service than low income earners? No, it's the opposite, yet everyone gets taxed (and the rich get even higher rates than the poor).
Are you for some reason under the impression that avoiding taxes isn't already the focus?
That (bolded above) is true of any flat rate tax system such as sales and excise taxation. Since SS is a 'pay as you go' system there is no money to be 'invested' - FICA payroll taxes are collected from current workers and paid to support current retirees (or their surviving spouses). SS is a 'wealth transfer' system but from the working to the (elderly) retired and, as you originally noted, half is paid by the employer who is often quite rich. If you wanted to 'fix' SS in a much more progressive manner then simply make up any shortfall with general revenue which is largely from the already quite progressive federal income tax revenue.
This seems like a far more equitable solution than making poor people work more.
Why not? They earned the money and paid taxes on it, why can’t they invest it if they want to without being double taxed?
I agree, which is why raising the SS 'full benefit' age was a nutty idea. My last option, using general revenue (largely from the quite progressive federal income tax) seems like the best of them. Much of the current SS funding problem is due to the temporary 'boomer bump' and should lessen considerably in a few decades.
That's fine with me. I don't really like the idea of payroll taxes anyway.
Though I do like sales taxes, especially when necessities like food are exempt.
Social Security is supposed to be an insurance plan, not an entitlement. It's Old Age, Survivors and Disability Insurance. Again, insurance. That's what the payments are supposed to be going to. You're buying government mandated retirement insurance. It's supposed to be a product to assist, financially, in retirement. It's NOT supposed to be a retirement plan in and of itself. Unlike a tax, the contributor to Social Security gets an individual benefit based on their contribution. Treating Social Security as a tax and an entitlement is the whole reason its in as much of a mess as it is right now. Adding to that mess is TOTALLY the wrong way to go about "fixing" it.
I also like sales taxes since they apply to income from all sources as it is spent on taxable (mostly new and non-food) items. Texas manages to fund its state and local governments without any income taxation at all.
I understand, but let's look at the reality of the situation. Low to middle income workers get a far higher percentage of their income taken in payroll taxes, and they're stuck "investing" in a fund that offers a terrible return. High income earners pay a lower percentage and can invest that money, earn a better return, and pay even lower taxes on those investments.
Let's call that what it is: a wealth transfer from poor to rich.
I know it doesn't, but I was anticipating some who might retort that my idea would subsidize a luxurious lifestyle for the rich.
How about get rid of the program and allow people to keep their own money and do with as they please. This way low to middle income people have extra money that they can then invest their money like rich people do. I would prefer the freedom to make my own decisions rather than rely on the government.
It's not. Sure, lots of people pull stunts to avoid tax but their primary focus is generally making money. People like to keep the money they earn. If you tell them that they'll be making $80k/yr but they'll only get $30k because everything else is going to some "social welfare" program they're going to start wondering why they're busting their ass to make a buck and start looking at how they can get on the "benefit" side of things instead of the "provider" side.
You know, much of the current wealth of Boomers is from the capital gains that they got from home price appreciation. Seeing them wealthy and collecting social security while their kids are working hard and paying for their benefits and excluded from much of the housing market is aggravating. Things like this make me awfully sympathetic to higher tax rates on capital gains, rental income, and property.
I also like sales taxes since they apply to income from all sources as it is spent on taxable (mostly new and non-food) items. Texas manages to fund its state and local governments without any income taxation at all.
Why shouldn't middle income earners be able to do the same thing? They're taxed at a higher rate and excluded from that possibility.
How about get rid of the program and allow people to keep their own money and do with as they please. This way low to middle income people have extra money that they can then invest their money like rich people do. I would prefer the freedom to make my own decisions rather than rely on the government.
So pass a flat tax!
As I had explained earlier, those with significant other income must pay federal income tax on 50% to 85% of their SS retirement benefits which effectively reduces them. Kids paying up to 7.2% of their wage income is small price to pay to allow the elderly, which they will be one day (if lucky), to have SS as a guaranteed retirement income supplement.
I would much prefer a simple sales tax rather than a complicated income tax system. Hell, it would even reduce government overhead as they cleaned out much of the IRS.
The payroll tax system used to fund SS and Medicare is simple - you never have to file anything (unless self-employed) and your employer handles it all. The federal income tax could be made quite simple (having only two numbers) but that would remove the power of congress critters to appease 'special interests' by trading deductions, credits, exclusions and special accounting methods for campaign cash.
Do you understand why this program is called SOCIAL security?
The way you're describing it, it's a social welfare program. Let's treat it as such and have the rich contribute at the same rate as everyone else.
Yeah, and your point?
On all income? Even interest and other unearned income?
They already do relative to their benefits. The cap on SS contributions also serves as a cap on any future SS benefits.
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