Social Security’s Finances Erode Further and Could Spell Benefit Cuts

[WorldWatcher]

Does this include Trump's commitment to eliminate taxes on Social Security?

It should include the effects which is zero, because those taxes do not fund Social Security. They are income taxes.

The Second Quote is incorrect.

The Income Taxes paid on SS benefits go back to the SSA for payment of current benefits. Removing the Income Tax on SS will accelerate the Trust Fund shortfall because it will reduce current revenue to the SSA.

WW
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Taxation of benefits

 

[ttwtt78640]

Been in the minority in Congress .

From the 1990’s until 2023, Boomers held the most seats in Congress of ANY generation - they could have fixed SS and didn’t.

30+ years of control and no serious effort to fix the problem in all those decades?

Those congress critters have enjoyed re-election rates of over 90% by doing what they did (or didn’t do). Spending more than they dare ask for (demand in?) taxation has been (and still is) a political winner (approved by the electorate).

 

[WorldWatcher]

SS is too generous. Not the core payments but rather payments to people who didn't even work nor put money into the system. These can include spouses, ex-wifes, ex-ex-wifes, children, step-children, disabled children, etc. Over the decades we've turned a savings problem into a welfare system and now we're complaining that it's underfunded. Well Duh!!

You are confusing Social Security Retirement, Social Security Disability, and Social Security Survivor benefits. Those are different programs with different sources of funding.

WW

 

[BirdinHand]

The entire period boomers were the Congressional majority Social Security was well funded with a healthy surplus and returns.

Boomers have contributed more than they will receive.

Suggesting they should receive no benefits is the absolute worst idea ever proposed and smacks of ageism.

Bullshit.

We have known for my entire adult lifetime that SS was not going to be solvent once the Boomer generation reached retirement and have done NOTHING to address it.

 

[ttwtt78640]

Been saying that for years and they haven’t done it. And they likely won’t and will instead raise the age limit again and combine SSDI with SSI funds and then screw disabled families

So

Let it fail.

It’s 5 to 8 years from ‘doomsday’ for SS and annual federal “budget” deficits have climbed to $2T+. Perhaps it’s time the electorate decided that the ‘years of experience’ attained by their congress critters isn’t worth their (re-election) vote.

 

[BirdinHand]

It’s not that they’re Boomers, it’s that they’re politicians. Let’s not pretend that Millennials have any more courage.

The Millenials have held very little power. Only since 2020 have they had any significant representation in govt.

There is only ONE Millenial in the Senate. 66 now in the House.

Those congress critters have enjoyed re-election rates of over 90% by doing what they did (or didn’t do). Spending more than they dare ask for (demand in?) taxation has been (and still is) a political winner (approved by the electorate).

Until 2016? The Boomers were still the bulk of voters. Only since 2016 have other generations equaled or outpaced them.

 

[NJBob]

The Millenials have held very little power. Only since 2020 have they had any significant representation in govt.

There is only ONE Millenial in the Senate. 66 now in the House.

Have any of them introduced a bill to address Social Security?

 

[Lord Tammerlain]

A simple ‘fix’, to prevent exhausting the SS ‘trust me’ fund, would be to increase the SS FICA ‘payroll’ tax rate(s) from 6.2% to 7.75%.

Using liberal math, that’s only a 1.55% tax rate increase.

It is all how you define something

1 increasing to 2 is double or just 50% or just an increase of 1.

All depending on how you define the increases. All are true, but change the narrative used to push something

 

[BirdinHand]

Have any of them introduced a bill to address Social Security?

AOC has.

 

[WorldWatcher]

Bullshit.

We have known for my entire adult lifetime that SS was not going to be solvent once the Boomer generation reached retirement and have done NOTHING to address it.

Agreed.

But to give credit where it's do. It was recognized that the Boomers (us) were going to run out of SS funds. The changes made in 1983 (and tweaked in 1990'ish) were to protect SS for 50 years.

1983 + 50 = 2033

So those changes achieved what they were supposed to do.

Problem is there have been no more tweaks since.

WW

 

[WorldWatcher]

I've come to believe that we need a re-evaluation of SS Taxes in general. The workforce and economy are very different than they were in 1935 when the system was created. Now I'm leaning more toward, making SS Tax applicable to all income the same way it is determined for Income Tax (wage, interest, dividends, short term stock commodities, and long term capital gains) as a new revenue source. As such:

• Current SS tax of 12.4% would remain (6.2% by the EE and 6.2% by the ER).
• Non-wage income would be taxed at a rate equal to 25% of the total FICA rate or another way to say it as 1/2 of the individual EE rate. That would currently be 3.1%.
• Financial institutions would be required to collect the 3.1% at the time of posting, just like employers (ERs) collect it at the time of payment.
• Because the non-wage rate is 25% of the wage rate (3.1% compared to the FICA total of 12.4%), then 25% of non-wage income would be credited to SS Income for that year.
• Current cap of 160K on wage income could remain the same.
• A cap of 40K would also apply to non-wage income. (25% taxed, so 25% of wage cap)
• The sum of the wage credit and non-wage credit is posted as the total SS Income for the year which is then used to determine SS benefit amounts.

Example:

A high wage earner makes $300K in wages, taxes are collected on wages up to $160K for a total of $19,840 in wage tax. Applicable income credited for the year for future benefits calculations is $160K. If the same person has in additional $100K of non-payroll investment income, the SS Tax would be $3,100 at 3.1%. Total SS Taxes would then be $22,940. 25% of the $100K passive income would be credited to SS Income for the year equaling $25K since the tax rate is 25% of the full FICA rate. So the individuals total SS Income credited for the year would be $160 + $25K = $185K.

A "Low Wage" earner making say $40K would pay 6.2% ($2,480) on wages. If they had $500 in interest than $3.1% = $15.50). Total SS Income for the year would then be credited as $40,125. $125 being 25% of the $500 in interest.

WW

(NOTE: This was written some time ago, so the caps are different now, but the logic applies.)

 

[ttwtt78640]

The Millenials have held very little power. Only since 2020 have they had any significant representation in govt.

There is only ONE Millenial in the Senate. 66 now in the House.

Until 2016? The Boomers were still the bulk of voters. Only since 2016 have other generations equaled or outpaced them.

Hmm… haven’t you admitted that you don’t care if SS benefits are cut? You seem to think Millennial voters or congress critters wouldn’t share your views.

 

[BirdinHand]

Agreed.

But to give credit where it's do. It was recognized that the Boomers (us) were going to run out of SS funds. The changes made in 1983 (and tweaked in 1990'ish) were to protect SS for 50 years.

1983 + 50 = 2033

So those changes achieved what they were supposed to do.

Problem is there have been no more tweaks since.

WW

Yep.

Fixed it for the Boomer generation but no one after that

Acting in their own self interests. Sort of the trade mark of the generation

 

[NJBob]

Agreed.

But to give credit where it's do. It was recognized that the Boomers (us) were going to run out of SS funds. The changes made in 1983 (and tweaked in 1990'ish) were to protect SS for 50 years.

1983 + 50 = 2033

So those changes achieved what they were supposed to do.

Problem is there have been no more tweaks since.

WW

How close were we to running out funding when the 1983 changes were made? Similar to today?

 

[NJBob]

Yep.

Fixed it for the Boomer generation but no one after that

Acting in their own self interests. Sort of the trade mark of the generation

You seem to have an issue with Boomers.

 

[BirdinHand]

Hmm… haven’t you admitted that you don’t care if SS benefits are cut? You seem to think Millennial voters or congress critters wouldn’t share your views.

I don’t care if SS disappears entirely at this juncture.

We seem to have embraced a bootstraps culture where our voters are fine with slashing Medicaid, food stamps, running up a bigger deficit so we can give the wealthiest more tax cuts (again), cutting funding for research and schools, etc.

So let’s let the old people share in some of the pain they seem more than happy to hand out to others.

 

[BirdinHand]

You seem to have an issue with Boomers.

As a generation I very much do.

Single most selfish generation in American history.

History will not look favorably upon the Boomer generation - and with good cause.

I am part of the most selfish generation in history and we should be ashamed of our legacy

I am part of the most selfish generation in history and we should be ashamed of our legacy

jeremypaxman.co.uk

How baby boomers became the most selfish generation

It's not your imagination. The baby-boomer generation is particularly more selfish than every other generation — and that all comes from one ideology.

www.businessinsider.com

They destroyed the “American dream” for the generations coming after them. They destroyed the middle class in America. They destroyed unions.

They chased after their own individuals wealth and prosperity and pulled the ladder up behind them at every turn - and kicked the can down the road at every possible juncture. Making themselves wealthy (in comparison to earlier generations)and leaving those coming behind them with a gigantic mess to clean up.

And now, even in and approaching retirement - are only concerned about themselves.

The Boomers were the first generation in US history where those coming after them would not know a better quality of life - and that’s because of the choices THEY made. Repeatedly.

 

[ttwtt78640]

It is all how you define something

1 increasing to 2 is double or just 50% or just an increase of 1.

All depending on how you define the increases. All are true, but change the narrative used to push something

Nope, doubling of something is a 100% increase in it.

 

[WorldWatcher]

How close were we to running out funding when the 1983 changes were made? Similar to today?

To be honest I can't give a year. But it was recognized that without changes in the early 80's expenditures would exceed revenues resulting in a shortfall. I'm guessing the impact would have been felt in the late 80's early 90's. But I could be wrong on that.

WW

 

[WorldWatcher]

As a generation I very much do.

Single most selfish generation in American history.

History will not look favorably upon the Boomer generation - and with good cause.

I am part of the most selfish generation in history and we should be ashamed of our legacy

I am part of the most selfish generation in history and we should be ashamed of our legacy

jeremypaxman.co.uk

How baby boomers became the most selfish generation

It's not your imagination. The baby-boomer generation is particularly more selfish than every other generation — and that all comes from one ideology.

www.businessinsider.com

The problem isn't that we are more selfish (IMHO), the problem is there are so many of us resulting from post WWII baby boom (hence the moniker "Boomers") coupled with prosperity in that after WWII we were the only country with a manufacturing base not bombed out of existence. That took decades to change.

WW

 

[WorldWatcher]

I don’t care if SS disappears entirely at this juncture.

We seem to have embraced a bootstraps culture where our voters are fine with slashing Medicaid, food stamps, running up a bigger deficit so we can give the wealthiest more tax cuts (again), cutting funding for research and schools, etc.

So let’s let the old people share in some of the pain they seem more than happy to hand out to others.

Just curious...

Do you really believe that?

or

Is it more, let them have (the far right) have what they asked for so people can actually suffer the pain the cuts will make? Then some can point out "This is what you voted for."

WW

 

[BirdinHand]

Just curious...

Do you really believe that?

or

Is it more, let them have (the far right) have what they asked for so people can actually suffer the pain the cuts will make? Then some can point out "This is what you voted for."

WW

This is what you voted for.



(Me? I’m in favor of a UBI that would cover EVERYONE, not just retirees. And think that’s where we need to be - not debating propping up a failing system that will only benefit a select portion of the population)

 

[BirdinHand]

The problem isn't that we are more selfish (IMHO), the problem is there are so many of us resulting from post WWII baby boom (hence the moniker "Boomers") coupled with prosperity in that after WWII we were the only country with a manufacturing base not bombed out of existence. That took decades to change.

WW

No, the generation IS selfish.

The generation destroyed unions (fought for by prior generations)
The generation destroyed housing availability via zoning ordinances (after building one development after another to suit themselves)
The generation voted for one tax cut after another for the wealthy.
The generation got us engaged in one bullshit war after another.

Boomers experiences the prosperity of Post WW2 US and hoarded it to themselves.

 

[WorldWatcher]

This is what you voted for.

I didn't vote for "it" nor did I vote for the current MAGA crowd in charge.

I'm old school GOP and an anti-trumper.

(Me? I’m in favor of a UBI that would cover EVERYONE, not just retirees. And think that’s where we need to be - not debating propping up a failing system that will only benefit a select portion of the population)

Wouldn't supply and demand kick in.

If we have BUI for everyone, who pays the massive taxes to fund BUI?

WW

 

[Allan]

Bullshit.

We have known for my entire adult lifetime that SS was not going to be solvent once the Boomer generation reached retirement and have done NOTHING to address it.

SS is currently solvent and as posted earlier boomers will leave more than they take.

You want to deprive 76 million boomers of an earned benefit because you don't like how congress handled the fund.

You voted for some of those congressional members. Why shouldn't you also be denied benefits since your vote also contributed to the problem?