I imagine they are broadcasting this idea now with the idea that the "bipartisan compromise" will come in 2029 and be signed into law by a democrat president who then takes the fall for the tax hike. It'll only take a few republican defectors to pass the bill, and then they can blame it on the majority.
Frankly both Republican and Democrat presidents since the 90s could've addressed this problem. Leadership in both parties decided to kick the can until they couldn't anymore and which ever party holds the bag will take the blame.
And then came Ronald Reagan and the belief that we could have our cake and eat it too. Perfect metaphor for or fiscal policy since Reaganomics took over.
You are correct. Under Ronnie and the Treasury Secretary not only did they raise the full retirement age but they also increased the SS tax rate for both employees and employers. It was supposed to resolve SS income/output forever.
But because of the rise of the Super rich whose taxes are limited to a small % of their total income versus average workers less money is collected than expected.
Reminder, Obama tried with Boehner. I don’t remember details but the plan was to lock in w/ legislation the 10% general budget cut with a 3% tax increase. It didn’t go anywhere, attacked immediately by those right of Boehner and lost Speakership due to cooperating with Democrats.
Well, upper middle class. It's probably going to mean removing the cap, further squeezing higher earners who make their money through labor while capital ownership remains largely untouched.
Remove the cap and institute the employee portion (6.2%) on all capital gains. The rich will pay the most and SS immediately becomes solvent, indefinitely
Removing the cap will no longer make SS solvent. Maybe 20-30 years ago, but not now. They now need to raise taxes, increase retirement age, cap benefits, or some other method. The longer they wait to to implement the changes, the bigger the policies have to be to cover the deficit.
Lowering the benefit or raising the retirement age is particularly cruel because it doesn’t even come close to closing the funding gap and it disproportionately hits the people who need it most.
It's much less of a moral hazard though. It lands on the people who had the chance to change it ahead of time. It's much more just than hitting current workers.
The people it will most negatively impact (lower income) are those would never have been impacted by raising the cap. It is the high earners whom have accrued all the benefit by not closing the funding gap.
High earners are not a person or even people, It's a category that can be applied to people but it doesn't make them the same A high earning current worker is not fungible with a previously high earning current retiree. That's my point. The costs must fall on those who made the decisions (via their Democratic representatives) and who benefited from it. You can't just smash people together into broad categories across time and act like those are the same people.
I’m fascinated not only by self interest but also it’s the first time since Reagan a tough choice has to be made by the federal government it’s no longer F35’s and wars of choice
Not to be the guy that doesnt support helping folks. And i think we should raise social security.
But what a bunch of ass holes the boomers have been. Make a system to fully support them with the lowest taxes in history for their entire lieves and now that they got their cake, and they arent working but living off the system THEY built we now have to raise our taxes to support their retirement.
The extremely wealthy don't have their income (capital gains/dividends/interest/rental income/royalties) subject to SS taxes. It is high income earners (DR, Lawyers. Corporate Executives) that fight to keep the cap, especially with no increased benefits.
It's not a popular opinion, but I support letting social security just hit the cliff and watch the payments drop. Current retirees underfunded the program for their entire working lives (while living through the greatest era of prosperity in human history, no less). I don't think it is fair that, once again, they get off unscathed and pass on the bag of shit to the younger generation to deal with it.
If we want to fix it for the future, start raising social security taxes on EVERYONE so everyone can pay in for this benefit the receive in the future, probably gradual increases over the next 10-15 years to get social security back to what it was before
The lower classes cannot endure higher tax. Removing the cap and taxing capital gains for SS is the only option that doesn’t wreck the bottom half of earners
Of course they can. US tax rates are some of the lowest in the developed world, especially for low earners. Many of them even get PAID by the IRS on their federal return. It defies logic to say they can't handle a minimal tax increase to support one of our countries most valuable social programs. If citizens of every other country in the world can figure it out, surely we can in the US.
I would be ok adding it to the capital gains tax. Taxing (high earning) labor even more, when those taxpayers are already funding basically everything else in the country seems misguided.
I don’t understand your thought process. 90% of earners pay SS tax on 100% of their income. Why should the top 10% of earners not share the same burden?
They also pay the most federal tax and state tax. If we removed the cap I think it would be the biggest tax increases in decades and it would be on "earned income" so people who actually are working for it with capital gains still not taxed. Many people especially in California (37% federal, 12.3% state, 2,9% medicare, 12.4% social security, 0.9% additional medicare tax so a 65.5% tax rate for money over $640,000.
With the cap on SS that tax rate goes to 53.1% so it's a massive increase. For someone with 1,000,000 income it's an additional 101,000 in taxes about per year.
Then do they get additional social security payments when they retire? Currently with the bend points all income above about 94,000 you get only 15% of that added to your check. If you're putting in an additional 100,000 a year and they leave it how it is you'd see some social security checks going well over 10,000 a month.
If you cap the benefits you receive...well then it's a "welfare" program. Right now there is at least a "little" buy in because you do get some of your money back when you retire even if it's only 15% at the top...it's at least something. That helps politically with the buy in.
Other commentors are correct in that there will be a massive pushback against just uncapping it with or without increasing benefits. Especially without doing something with all that capital gains income which is taxed so much lower.
82% of Americans and a majority of both parties favor raising or completely eliminating the income cap. Your opinions are biased and not aligned with the vast majority of Americans.
And subjecting capital gains income to SS tax should be and is on the table in discussing correcting the SS shortfall.
Most Americans support lots of things that are wrong, often in significant majorities. For one example, banning trans athletes (or more specifically trans women) from CIS women sports. Should that be a law just because the majority support it?
Take a hypothetical. If more than 50% of Americans supported killing all 955 US billionaires and confiscating all their wealth and distributing it to each US citizen would that be OK? If not why not?
I am guessing the confusion is because you dont understand the structure of social security. It isnt a welfare program. It is an insurance program. You pay into it and you get a stipend back based on your contribution. Because of the bend point system, social security is already EXTREMELY progressive and is only surviving as well as it does because of heavy subsidies from the highest earners. The people who benefit most from social security, relative to their contribution, are those who earn the least, up to the first bend point (people earning ~15k per year in 2026). The ones who benefit the least are the people who contribute up to the cap. The ROI on the money contributed is negative, in real terms.
Expecting even more from the highest earners, who are already heavily subsidizing the program AND paying the most federal income tax is insane, particularly since the truly wealthy are making their money through capital gains, which is sheltered from all this. Increasing the cap creates even more headwinds for the laborer while the capital owner continues to run away with it, worsening income inequality even more.
Oh I understand the structure of SS. All income should be subject to SS tax. Earned and unearned. The hang up is that you don’t like that. Likely because you either, earn more than the cap, are libertarian leaning or both. Either way I don’t care and your opinions don’t align with what the vast majority of Americans think about the subject.
It's set up as an "insurance" program now and is very regressive. If we remove the cap...do we allow those who are very wealthy to "benefit" from removing the cap meaning currently they only get 15% of AIME (Average indexed monthly earnings) and this is capped at around 185,000 this year. That would mean people who are making over 1,000,000 with cap removed and same 15% bend points would get checks well over $10,000 a month when they retire assuming enough high earning years. Maybe much much more depending on your income I guess.
If we completely eliminate any benefits from contributing more money it goes from an insurance program to a welfare program.
Reality is congress likely will do nothing and let it go until funds run out in 2032 or so hoping whatever party in power has to take the political bullet for the tax increases. I'd be absolutely shocked if they really tried to fix anything.
Most republicans...maybe not all would prefer it just run out rather than raise taxes. Would still be about 78% funded but would be a large haircut.
Compared to other developed countries, like much of Europe, our middle class is way undertaxed. Look it up if you don’t believe it. The poor pay little in taxes and the rich pay more than their share - that part is quite progressive. It’s the middle class that don’t pay their way.
Yes but this funding issue has been apparent for my (36) entire life, boomers who have been in power that entire time could have solved this problem but refused to pay more taxes.
The earliest boomers were 37 in 1983. The latest were 19. The boomers were definitely the ones who started paying those higher taxes. Come on man - look at a calendar.
I am not even a boomer (gen X) and at least I can see reality.
It's a "legal" Ponzi scheme. The ones who are at the top (boomers) reap all the benefits, while the rest of the population is stuck holding the bag when the funds run out.
we now have to raise our taxes to ~~support their retirement~~ fund debt obligations.
SS isn't a handout. It's an entitlement. It's an agreement by the government to pay a specific amount based on a forced contribution. Anyone arguing to reduce that benefits is arguing for the government to default on its obligation to pay a debt.
...It's not to support boomers, it's to support ourselves in the future homie.
What do you think the actual issue being discussed is? In ten more years when the surplus fund runs out(which is the issue, it is mostly pay-go today), the youngest boomer is gonna be 71, the oldest 90something. Average age for someone alive and 61 today is 80-84.
And you realize something like 80% of boomers... rely on SS to pay necessary expenses? And they still have to pay for their part B and D medicare at the beginning of the year.
Rich boomers, especially. The widely cited main lever to pull is uncapping the tax. Most boomers didn’t benefit from the cap. Probably also need to add a couple percent to payroll tax generally, though, too.
Hard disagree. Because of the extremely progressive nature of social security and the structure of it with the bend points, rich people (including boomers) massively subsidize the program compared to lower earners.
If we are uncapping the tax, we need a way to claw back the money from current recipents that benefited from the cap when they were working.
Undet Talarico's plan, this will be a new Social Security tax applied to unearned income, specifically mom-education loans, Capital Gains and Dividends.
I would love reform of cap gains taxation generally, above/beyond SS tax.
I don’t agree re: clawbacks though. That’s now how law works. Shouldn’t be punitive against what was the law and structure at the time. Unless you’re implying the latter is the “clawback”?
You can't just blame every problem on the rich. A non worker boomer is a parasite no matter what. If anything, at least the rich boomers has assets to sell to fund his life, a poor boomer is living entirely by sucking working people dry
Congress finally faces the Social Security crisis: the fund will run out in Congress finally faces the urgency of reforming Social Security: the fund will run out in 2032 and will cause an automatic cut of 22%, which has led more legislators - including Republicans - to accept that income will have to be increased via taxes, especially by raising or eliminating the cap of $184,500 that makes average workers pay proportionally more than high incomes; proposals such as those of Moreno-Warren or Whitehouse-Boyle would generate billions and cover part of the deficit, but not everything, making it clear that mathematics and demography no longer allow continuing to postpone decisions
There's a website that allows you to play around with some variables to solve SSI and the trust fund. I was playing around and managed to "solve" the funding gap by instituting the following:
•Raise retirement to 69 and index to Life expectancy
•Slow benefits for top 20% of earners by adjusting brackets from 90/32/15 to 90/32/5
•Cap COLA for high-income beneficiaries such that they receive the same COLA as median beneficiary
•Remove tax max on SSI at the $184,500 and institute a 15% benefit credit payments above the current cap
The 69-year retirement age is wild. Nobody in my family has ever made it that far. I don't support raising the age unless we differentiate it individually on actuarial terms.
All those fixes are BS, complete moral hazard. Step one is let the current benefits be cut. The next is remove the cap, and let that support higher benefits in the future(then where they would be after the immediate cut).
They’re talking about the bend points. That proposal would mean that higher earners get less of what they put in, i.e., once their AIME goes past the second bend point their benefit will replace only 5% as opposed to 15% of those earnings.
We have to cut spending. 37% of households collecting social security have HHI > $100k. Going off the 4% rule, we are subsidizing people with over $2.5M in assets.
Yeah but I mean that's the problem, retired people are not supposed to live a nicer life than middle-aged workers. That's ahistorical and not sustainable with our demographics. Not just in the US, like the entire developed world.
You think a 2 bed 1 bath and a single car is a nicer lifestyle than the average middle aged worker?
Their HHI is lower than the median HHI for 40 year olds in their state and their social security is only that high because my father worked till 70 and delayed collecting.
Sure, if you want to make really terrible arguments, you can do that. Lifestyle is standard of living. You seem to not understand what an apples to apples comparison is. So yeah, you have a good one, there's nothing to be gained from this conversation anymore.
So someone who spent their whole lives saving towards their retirement should be punished and not given social security that was promised to them, and that they spent their lives paying into? You think all retired people should be poor? Social security payments are already tiered so that the people that earned less money get a bigger percent of their average yearly salary. You could say that's already not fair to higher earners.
Keeping a promise makes no sense if it was a promise built on implicitly taking from the future. It's way worse to keep the corrupt promise because it just creates pure moral hazard and leaves the cost on people completely separate from the decision.
This comment fundamentally misunderstands what social security is. You are proposing we fundamentally restructure the program to be a welfare program, when that is never what it has been. It's an insurance program. You pay in to it and get a stipend back based on that payment. It's literally called the Old Age, Survivors, and Disability Insurance program. That is why there is a cap. It isn't a welfare tax.
Which are funded by payroll taxes. To say the system is insolvent due to an arbitrary cap on the payroll tax that funds its payouts is silly. Also to the extent your comment is accurate - we should have gotten refunds when social security was running a surplus and Al Gore called for a lock box for those proceeds (which was never enacted). But we got no refunds and instead the government used those funds for other purposes. The cap can be raised to a higher maximum, eliminated, and/or benefits can be adjusted. There is no political will to do anything until the crisis heats up. Which is just a sign of the reckless politics of this country from both major parties.
It still isn't a welfare program. Current tax payers are not paying enough into it for the benefits. Because of the highly progressive nature of the program with the bend points, higher earners are already majorly subsidizing the program. Really everyone needs to be ok with paying higher taxes if they care about maintaining the program, or accept the fact that payments are going to be lower than they expect. Removing the cap, putting even more taxes on labor while capital ownership continues to concentrate wealth in the top fraction of a percent is not the answer.
Its extremely unlikely that there will be political will to raise capital gains tax or tax capital at rest to fund social security. That actually breaks the illusion that the program is insurance at all and makes it look exactly like welfare. I don't disagree with the argument you are making on gains going to capital over labor at all. Raising the base rate paid by employees and employer may be possible as well, but likely only in the context of also lifting the cap significantly. Just my two cents.
I don't think you know what you are talking about. I also didn't say the only required changes. Removing the tax cap will by itself ease a lot of the manufactured crisis.
Good luck explaining that here. I am not sure when an economics sub got brigaded by a bunch of people who fundamentally don't understand economic policy, but here we are.
That benefit is capped too. And high earners usually get less benefits relative to what they pay in, look up bend points and special minimum benefit.
Also, there are plenty of other regressive or functionally regressive taxes in existence, sales tax, liquor taxes, etc.
I do think there is room for some tax increase on high earners to help fix SS but those that think you can just get rid of the cap and also not have any other reforms like the retirement age going up are dreaming imo
Oh no, whatever will the higher earners do if their income is subject to the same tax as everyone else? It's simple - get rid of the income tax cap and deny benefits to individuals making more than a few hundred thousand a year. The rich really don't need social security income, but they should absolutely be paying into it more.
> whatever will the higher earners do if their income is subject to the same tax as everyone else?
They make up for it because they have to pay way more in federal income tax, the federal income tax is very progressive
> get rid of the income tax cap
There is no federal income tax cap, you either made a typo or have no idea wtf you are talking about. The federal income tax and the SS payroll tax are not the same thing.
> The rich really don't need social security income
200k in year in income isn't 'rich', matter of fact in HCOL areas is is just at the upper end of middle class
> but they should absolutely be paying into it more
See the part where I said: I do think there is room for some tax increase on high earners to help fix SS
The repeated borrowing " and not paying back" by Congress has put the strain on the system. Running a deficit, year after year, paying interest on huge debt service to billionaire mega Bankers, is the capstone on the "Pyramid " con game.
In before they broadly label it welfare and denigrate anyone who relies on it, and still win support at the polls.
Given that countless people have been banging this drum for decades, there is absolutely no scenario where they save it let alone ensure that it is adequately funded. They're just praying it runs out under a Democratic presidency.
It's not enough to just uncap it for high income earners though. Will likely need a combo of increasing retirement age, increasing taxes for everyone, plus maybe uncapping it.
That’s literally the only way it will get fixed. Just about everyone (except the destitute) will have to contribute to the fix. There’s literally no way the folks at the top end of the income spectrum are just going to sit back and eat a relatively large tax hike for a program that isn’t all that important to their well being. They will absolutely derail any such plan that doesn’t share the pain.
I get that people don’t like hearing that, but it’s definitely the reality. Those folks (who have disproportionate political power and influence) would 100% prefer to not pay any more and just deal with the big cut in future benefits. We all have to get used to the idea that the pain will be shared (even if the higher income people absorb a big chunk of it).
Old ppl are the plurality of voters, so of course they're going to support tax increases primarily on younger ppl to support this. It's political suicide to suggest otherwise.
I know this makes me sound crazy, but I was never too worried. DC is all about brinksmanship and this is a problem tailor made for a last minute solution.
Better to just let benefits decrease then to make any sort of radical change. If it was further out I'd say it would be best to raise retirement age or reduce cola, which would still be good changes, but they don't have enough time to come into effect while keeping benefits solvent.
Letting the social security trust fund be invested in public companies is a risky proposition that was specifically disallowed by the original lawmakers for a couple reasons:
It would be difficult to avoid corruption. The current size of the trust fund is around $2.5 Trillion dollars. That is bigger than the largest mutual fund, even the passive ones. The effects of $2.5 trillion being invested will, at a minimum, have a very positive impact on the fund that is chosen for the investment, even if it is passive. That's billions of dollars of revenue for whatever company's fund is chosen, even at the lowest expense ratio. And so, there would likely have to be a provision for spreading out the investment "fairly", or even for the government running their own fund. Even if there was wording in the law for investment in the total market, there will then still be decision makers who are actively investing and choosing winners and losers. Who is to say that friends of the administration couldn't influence a cash infusion here and there when needed?
The trust fund was also conceived as a way to increase demand for government debt. A sudden $2.5T drop in demand for government debt would likely reverberate throughout the bond market and cause some yield chaos.
Also, the social security trust fund is kind of an accident. It is the result of uneven generation sizes. In a "perfect" world with an absolutely steady number of retirees, the inflows would match the outflows exactly and there would be no need for savings. And this is because social security is not really a retirement savings plan but actually insurance against elder poverty. Therefore, it was designed to operate as insurance companies do: using inflows to fund outflows, and not allocating one's specific contributions to themselves alone, but instead spreading out the contributions using a progressive formula. You may disagree with this design, but that was the original intention and any transition to something that is more akin to a mandatory savings system like, for instance, Australia has, would require a big transition and a lot of political capital.
Norway's Government Pension Fund Global is the largest sovereign wealth fund in the world, with assets exceeding $2.1 trillion.
Why do we constantly make the arguments that the US is both so great at everything, but so incompetent that it couldn't possibly do things other nation's do to benefit its people?
Direct indexing still allows for plenty of corruption.
For instance, is it direct indexing of the total market? Or of an index like the S&P or Russell 3000? Whichever index is picked, the *private company* that curates that index will have more power. If it's total market, then who is to decide the minimum cap size limit of companies that are invested in? Lots of funny business can happen with small and micro caps when trying to "direct index" the total market. And when there is an IPO, who decides how quickly to invest in it?
The list goes on. There is also the problem of rebalancing schedules and tolerances, etc. On a very high level, it could even be argued that the choice of something like the S&P 500 over the total market could be seen as government putting its finger on the scale of the balance between big and small businesses.
It would be almost impossible to legislate complete passivity of investment decisions.
Norway has a $2.2T sovereign wealth fund invested 70% in equities. CalPERS is invested in equities and alternative investments. This is not rocket science.
Our government invested the entire social security trust in bonds for decades while the s&p500 returned 10% per year nominally. That is malpractice.
Well that's just it, though. Social security is not a sovereign wealth fund, which are most often not funded by taxes (Norway's doesn't even pay out directly to their citizens, it is used to fund the government budget). Social security is also not a pension plan like CalPERS in which your contributions are (theoretically) allocated for your future self and yourself alone. Instead, social security is an insurance program.
If you wanted legislators to pivot to a national pension or mandatory savings scheme, then there are some valid arguments for that. Australia's superannuation program has been very successful, for instance. The republicans often use this as an example of what they want in the US.
But at the moment, social security is structured as insurance, of which the trust fund is a consequence of uneven inflows and outflows due to mismatched generation sizes. Since the trust fund is not meant to build or store wealth, there is no mechanism in the law for it to be treated in any manner other than essentially a giant cash account.
Insurance companies invest the float because they are allowed to have a 20% profit margin. So there is plenty of float to invest, and plenty of margin for losses before it endangers payouts to the insured.
Social security is theoretically designed to match inflows to outflows, with minimal margin, so the very existence of the trust fund is just a side effect of that and not a core component of the program.
I agree that what u/PIKFYVE is proposing could probably be reasonably implemented with enough political capital. I'm just sharing the reasons why it hasn't yet, why the original creators of the law didn't envision the need for it, and why making such a change wouldn't just involve snapping one's fingers and just investing the trust fund, but would require a reimagining of how the entire program is structured.
My comment was referring to the decades of time where payroll tax revenue exceeded benefits. No pension/sovereign wealth fund should be invested solely in fixed income securities. But that’s what our politicians did.
I don’t share your view on the cap. But that really isn’t the point I was trying to make.
Honestly my 4 year old sheltie has more maturity than the whole population of voting Americans and congressman averaged as a whole. It appears they vote for their extinction almost every election. My dog isn't that stupid. With that said it's exactly why I studied economics, to defend myself from these people's actions. I hope you are also doing what you need to do for yourself. Voting appears to not be working.
Invest in the system and not war. Dont give us all $5000, out the 1.3T into the system. Reduce benefits to people who absolutely do not need it…or just keep doing the same think and trickling down all that lovely wealth all over us all /s
Very sad to see. Social security is nothing more than a wealth transfer from the poor to the rich. It may very well be the start of the decline of the US from being a world leader to becoming the UK
Maybe im in the minority, but I support tax hikes to make social security solvent. Without, id be poorer in retirement. Even with my 401k contributions
Lifespans have been increasing, but the retirement age has not changed. This SS has to pay benefits for longer and longer. We should index the retirement age to expected lifespan, increasing over time as lifespans increase.
These are the same solutions that have been offered for decades. The only roadblock has been complete lack of political will. Remove the cap and put in some forms of means testing to make sure those at the upper income/wealth percentiles get some amount but not more than is necessary.
The government threatening to come after young people in order to babysit boomers, who were gifted an absolutely absurd pathway to stable retirement but squandered it while telling everyone else to pull themselves up by their bootstraps, has been the modus operandi for the last 20+ years.
In other words, you should always have been saving in preparation for this. If you haven't started, it's not too late. Even just an extra 10 bucks a week put into an investment vehicle starting now could be 100k extra by the time you retire.
Boomers, including even your own parents or grandparents, were always going to come after your retirement in order to fund theirs.
> who were gifted an absolutely absurd pathway to stable retirement but squandered it while telling everyone else to pull themselves up by their bootstraps, has been the modus operandi for the last 20+ years.
>
Oh bullshit.
You are just taking your daddy issues out on an entire generation.
>while telling everyone else to pull themselves up by their bootstraps,
Sure they did, buddy. Every boomer did that.
Or maybe it was just your parents?
>> who were gifted an absolutely absurd pathway to stable retirement
Uh huh. Absolutely absurd.
TL;DR: he hates boomers because his parents were mean to him.
Means testing based on current asset value would be challenging, whereas means testing as a function of total lifetime income would be a snap. So there's your incentive. Once your lifetime income exceeds the threshold, your Social Security payments would be canceled unless you could prove you were broke for government-approved reasons, so you'd better have something saved.
Holy fuck I'm so sick of this. The only thing they need to do is remove the Caps so that everybody pays The same as a percentage of income. Right now the rich have to pay so little but no heaven forbid a republican actually call that out because then all their funding goes away cuz the only people who prop these people up are the rich
How about tax hikes on… the rich. You know the people use the most resources, take the most, and contribute the least amount to the system. Those people. Tax those people.
In fairness, with the wealthiest Americans completely insulated from representative taxation, and the democrats likely to increase their control in Congress, the GOP are probably just happy to avoid taking the fall for SS insolvency they are largely responsible for
No one is going to raise taxes. They will just let social security lose its value and say “it is already a Socialist abomination which should be phased out…”.
How about they roll back the corporate tax cuts Trump made in both terms. Or add additional social security contribution tax to corporations. That’ll generate hundreds of billions.
Do both. And, eliminate every corporate tax loophole. And, raise corporate tax rates to about 10% above what they were in 2016. And, give the IRS authority to levy massive fines for corporate tax evasion.
Found out that there are SS offices over the world where even non US citizens can claim SS. They obviously worked in the US at some point in time but maybe SS can be restricted to folks living in the US or probably do COLA adjustments for other countries.
Folks in other countries have access to social programs there as well , so why provide them with the same $ amount as someone living here ?
Sure, one example - folks who come and work in the US on visas (like H1b) can work and qualify for social security while still being citizens of another country.
Later go back and live in their own country but still get to claim social security.
Tax hikes on the rich, MFs! Put back what you gave away and we’ll be all right but don’t touch my SS or raise my taxes cause you cut taxes for your rich friends!
churningaccount | 7 hours ago
I imagine they are broadcasting this idea now with the idea that the "bipartisan compromise" will come in 2029 and be signed into law by a democrat president who then takes the fall for the tax hike. It'll only take a few republican defectors to pass the bill, and then they can blame it on the majority.
Reesespeanuts | 6 hours ago
Frankly both Republican and Democrat presidents since the 90s could've addressed this problem. Leadership in both parties decided to kick the can until they couldn't anymore and which ever party holds the bag will take the blame.
flamehead2k1 | 6 hours ago
this has been a known problem my entire life.
the boomers of both parties kicked the can to the next generation
dittybag23 | 4 hours ago
And then came Ronald Reagan and the belief that we could have our cake and eat it too. Perfect metaphor for or fiscal policy since Reaganomics took over.
thewimsey | an hour ago
> And then came Ronald Reagan
Reagan was the last president who actually did something about SS - he was the one who raised the retirement age in 1983.
You don't have to like Reagan, and he did a lot of things I don't like.
But not WRT SS. You aren't entitled to your own facts.
juryjjury | an hour ago
You are correct. Under Ronnie and the Treasury Secretary not only did they raise the full retirement age but they also increased the SS tax rate for both employees and employers. It was supposed to resolve SS income/output forever.
But because of the rise of the Super rich whose taxes are limited to a small % of their total income versus average workers less money is collected than expected.
Cum_on_doorknob | 4 hours ago
They did. It was called “the lockbox” and it was as mocked.
sweet_cheekz | 3 hours ago
Reminder, Obama tried with Boehner. I don’t remember details but the plan was to lock in w/ legislation the 10% general budget cut with a 3% tax increase. It didn’t go anywhere, attacked immediately by those right of Boehner and lost Speakership due to cooperating with Democrats.
dogthatwonthunt | 4 hours ago
ever since Bush Sr took the blame for a needed tax hike and lost reelection over it, both parties have been gun-shy about it.
MagnusViaticus | 5 hours ago
Bush tried he got flammed
shiplax12 | an hour ago
yes for trying to privatize SS. hugely unpopular.
BlueBerry_Cream_Pie | 3 hours ago
The taxpayers will be the ones holding the bag, not the politicians nor capitalists.
Flat-Jacket-9606 | 5 hours ago
And it will be mostly put onto the middle class.
StrebLab | 5 hours ago
Well, upper middle class. It's probably going to mean removing the cap, further squeezing higher earners who make their money through labor while capital ownership remains largely untouched.
Crew_1996 | 5 hours ago
Remove the cap and institute the employee portion (6.2%) on all capital gains. The rich will pay the most and SS immediately becomes solvent, indefinitely
zekthisloser | an hour ago
Removing the cap will no longer make SS solvent. Maybe 20-30 years ago, but not now. They now need to raise taxes, increase retirement age, cap benefits, or some other method. The longer they wait to to implement the changes, the bigger the policies have to be to cover the deficit.
CaliTexan22 | 36 minutes ago
It will be a combination of those - higher taxes on employers and employees, later eligibility, reduced benefits, etc.
zekthisloser | 31 minutes ago
I agree, but I don't think they will increase the retirement age. 67 is already high, and pushing it to 68 is just crazy.
Educational-Bank-353 | 5 hours ago
Odd that they never consider doing that. Instead it's always lower the benefit, raise taxes on the working class, and raise the retirement age.
normal_man_of_mars | 4 hours ago
Lowering the benefit or raising the retirement age is particularly cruel because it doesn’t even come close to closing the funding gap and it disproportionately hits the people who need it most.
seridos | an hour ago
It's much less of a moral hazard though. It lands on the people who had the chance to change it ahead of time. It's much more just than hitting current workers.
normal_man_of_mars | 21 minutes ago
The people it will most negatively impact (lower income) are those would never have been impacted by raising the cap. It is the high earners whom have accrued all the benefit by not closing the funding gap.
seridos | 3 minutes ago
High earners are not a person or even people, It's a category that can be applied to people but it doesn't make them the same A high earning current worker is not fungible with a previously high earning current retiree. That's my point. The costs must fall on those who made the decisions (via their Democratic representatives) and who benefited from it. You can't just smash people together into broad categories across time and act like those are the same people.
fx2600 | 4 hours ago
Benefits haven't been reduced or FICA increased.
Substantial-Pear981 | 7 hours ago
I’m fascinated not only by self interest but also it’s the first time since Reagan a tough choice has to be made by the federal government it’s no longer F35’s and wars of choice
aliendepict | 7 hours ago
Not to be the guy that doesnt support helping folks. And i think we should raise social security.
But what a bunch of ass holes the boomers have been. Make a system to fully support them with the lowest taxes in history for their entire lieves and now that they got their cake, and they arent working but living off the system THEY built we now have to raise our taxes to support their retirement.
officiallyBA | 5 hours ago
It's really the extremely wealthy over the years who prevented caps from being removed and appropriate funding based on how well they prospered.
ExcellentCod2940 | 2 hours ago
The extremely wealthy don't have their income (capital gains/dividends/interest/rental income/royalties) subject to SS taxes. It is high income earners (DR, Lawyers. Corporate Executives) that fight to keep the cap, especially with no increased benefits.
StrebLab | 5 hours ago
It's not a popular opinion, but I support letting social security just hit the cliff and watch the payments drop. Current retirees underfunded the program for their entire working lives (while living through the greatest era of prosperity in human history, no less). I don't think it is fair that, once again, they get off unscathed and pass on the bag of shit to the younger generation to deal with it.
If we want to fix it for the future, start raising social security taxes on EVERYONE so everyone can pay in for this benefit the receive in the future, probably gradual increases over the next 10-15 years to get social security back to what it was before
Crew_1996 | 4 hours ago
The lower classes cannot endure higher tax. Removing the cap and taxing capital gains for SS is the only option that doesn’t wreck the bottom half of earners
StrebLab | 4 hours ago
Of course they can. US tax rates are some of the lowest in the developed world, especially for low earners. Many of them even get PAID by the IRS on their federal return. It defies logic to say they can't handle a minimal tax increase to support one of our countries most valuable social programs. If citizens of every other country in the world can figure it out, surely we can in the US.
Crew_1996 | 4 hours ago
We can figure it out. Lift the cap and tax unearned income.
StrebLab | 4 hours ago
I would be ok adding it to the capital gains tax. Taxing (high earning) labor even more, when those taxpayers are already funding basically everything else in the country seems misguided.
Crew_1996 | 4 hours ago
I don’t understand your thought process. 90% of earners pay SS tax on 100% of their income. Why should the top 10% of earners not share the same burden?
mazzmond | 3 hours ago
They also pay the most federal tax and state tax. If we removed the cap I think it would be the biggest tax increases in decades and it would be on "earned income" so people who actually are working for it with capital gains still not taxed. Many people especially in California (37% federal, 12.3% state, 2,9% medicare, 12.4% social security, 0.9% additional medicare tax so a 65.5% tax rate for money over $640,000.
With the cap on SS that tax rate goes to 53.1% so it's a massive increase. For someone with 1,000,000 income it's an additional 101,000 in taxes about per year.
Then do they get additional social security payments when they retire? Currently with the bend points all income above about 94,000 you get only 15% of that added to your check. If you're putting in an additional 100,000 a year and they leave it how it is you'd see some social security checks going well over 10,000 a month.
If you cap the benefits you receive...well then it's a "welfare" program. Right now there is at least a "little" buy in because you do get some of your money back when you retire even if it's only 15% at the top...it's at least something. That helps politically with the buy in.
Other commentors are correct in that there will be a massive pushback against just uncapping it with or without increasing benefits. Especially without doing something with all that capital gains income which is taxed so much lower.
Crew_1996 | 2 hours ago
82% of Americans and a majority of both parties favor raising or completely eliminating the income cap. Your opinions are biased and not aligned with the vast majority of Americans.
And subjecting capital gains income to SS tax should be and is on the table in discussing correcting the SS shortfall.
https://www.nasi.org/wp-content/uploads/2025/01/NASI_SocialSecurityat90.pdf
ExcellentCod2940 | an hour ago
Most Americans support lots of things that are wrong, often in significant majorities. For one example, banning trans athletes (or more specifically trans women) from CIS women sports. Should that be a law just because the majority support it?
Take a hypothetical. If more than 50% of Americans supported killing all 955 US billionaires and confiscating all their wealth and distributing it to each US citizen would that be OK? If not why not?
StrebLab | 4 hours ago
I am guessing the confusion is because you dont understand the structure of social security. It isnt a welfare program. It is an insurance program. You pay into it and you get a stipend back based on your contribution. Because of the bend point system, social security is already EXTREMELY progressive and is only surviving as well as it does because of heavy subsidies from the highest earners. The people who benefit most from social security, relative to their contribution, are those who earn the least, up to the first bend point (people earning ~15k per year in 2026). The ones who benefit the least are the people who contribute up to the cap. The ROI on the money contributed is negative, in real terms.
Expecting even more from the highest earners, who are already heavily subsidizing the program AND paying the most federal income tax is insane, particularly since the truly wealthy are making their money through capital gains, which is sheltered from all this. Increasing the cap creates even more headwinds for the laborer while the capital owner continues to run away with it, worsening income inequality even more.
Crew_1996 | 2 hours ago
Oh I understand the structure of SS. All income should be subject to SS tax. Earned and unearned. The hang up is that you don’t like that. Likely because you either, earn more than the cap, are libertarian leaning or both. Either way I don’t care and your opinions don’t align with what the vast majority of Americans think about the subject.
mazzmond | 2 hours ago
It's set up as an "insurance" program now and is very regressive. If we remove the cap...do we allow those who are very wealthy to "benefit" from removing the cap meaning currently they only get 15% of AIME (Average indexed monthly earnings) and this is capped at around 185,000 this year. That would mean people who are making over 1,000,000 with cap removed and same 15% bend points would get checks well over $10,000 a month when they retire assuming enough high earning years. Maybe much much more depending on your income I guess.
If we completely eliminate any benefits from contributing more money it goes from an insurance program to a welfare program.
Reality is congress likely will do nothing and let it go until funds run out in 2032 or so hoping whatever party in power has to take the political bullet for the tax increases. I'd be absolutely shocked if they really tried to fix anything.
Most republicans...maybe not all would prefer it just run out rather than raise taxes. Would still be about 78% funded but would be a large haircut.
ExcellentCod2940 | an hour ago
So long as they get SS credits for those payments then that would be logically consistant and equitable.
waldorflover69 | 3 hours ago
Whose boot are you slurping?
CaliTexan22 | 27 minutes ago
Compared to other developed countries, like much of Europe, our middle class is way undertaxed. Look it up if you don’t believe it. The poor pay little in taxes and the rich pay more than their share - that part is quite progressive. It’s the middle class that don’t pay their way.
https://freakonomics.com/podcast/ten-myths-about-the-u-s-tax-system/
matjoeman | 3 minutes ago
Europe has universal health care.
issadavis | 4 hours ago
We did NOT chronically underfund. The cowards and responsibility shirkers of both parties did.
hczimmx4 | 6 hours ago
Social security came before the boomers.
holymacaronibatman | 6 hours ago
Yes but this funding issue has been apparent for my (36) entire life, boomers who have been in power that entire time could have solved this problem but refused to pay more taxes.
Lord-Dongalor | 6 hours ago
We will raise revenue by cutting taxes!
thewimsey | an hour ago
> boomers who have been in power that entire time
Boomers are 20% of the population. They weren't the only people in power.
hczimmx4 | 6 hours ago
Boomers have had their social security tax and retirement age raised during their working careers. They have paid more taxes.
User-no-relation | 6 hours ago
Not really. Those changes were passed in 1983
hczimmx4 | 6 hours ago
The boomer generation is 1946 to 1964. 1983 definitively falls during their working careers.
ExcellentCod2940 | 2 hours ago
The earliest boomers were 37 in 1983. The latest were 19. The boomers were definitely the ones who started paying those higher taxes. Come on man - look at a calendar.
I am not even a boomer (gen X) and at least I can see reality.
flamehead2k1 | 5 hours ago
not enough though and we've known that for decades
hczimmx4 | 5 hours ago
The claim was boomers refused to pay more taxes. Did they have their SS taxes increased?
flamehead2k1 | 4 hours ago
I didn't make the claim and am not defending that specific claim.
I'm adding that it wasn't enough and we've known that for decades.
hczimmx4 | 4 hours ago
I disagree. It was too much. Let people keep their own money.
thewimsey | an hour ago
> Make a system to fully support them with the lowest taxes in history for their entire lieves
I'm not sure what sort of underfunded school you attended, but the boomers didn't make social security. Jesus.
bdonovan222 | 52 minutes ago
No but they sure as hell massively lowed taxs.. so the point remains valid.
Demiu | 2 hours ago
I am that asshole. There is too many old people, their percentage is too high. It is not sustainable and it's killing every developed nation.
There has to be less old people and the means to achieve it do not matter
Codex_Dev | 6 hours ago
It's a "legal" Ponzi scheme. The ones who are at the top (boomers) reap all the benefits, while the rest of the population is stuck holding the bag when the funds run out.
waldorflover69 | 3 hours ago
I can’t wait to see to see the back of that generation.
OddlyFactual1512 | an hour ago
we now have to raise our taxes to ~~support their retirement~~ fund debt obligations.
SS isn't a handout. It's an entitlement. It's an agreement by the government to pay a specific amount based on a forced contribution. Anyone arguing to reduce that benefits is arguing for the government to default on its obligation to pay a debt.
CaliTexan22 | 32 minutes ago
This isn’t intended to be welfare. Boomers didn’t design or implement the system.
We have too few workers, too many recipients living longer that projected, drawing more than they should.
This isn’t rocket science, but politicians are always afraid to make difficult decisions.
GhostofBeowulf | 6 hours ago
...It's not to support boomers, it's to support ourselves in the future homie.
What do you think the actual issue being discussed is? In ten more years when the surplus fund runs out(which is the issue, it is mostly pay-go today), the youngest boomer is gonna be 71, the oldest 90something. Average age for someone alive and 61 today is 80-84.
And you realize something like 80% of boomers... rely on SS to pay necessary expenses? And they still have to pay for their part B and D medicare at the beginning of the year.
Demiu | 2 hours ago
None of what you pay will be used to pay you in the future.
Boomers underfunded it so boomers should get their SS cut now
bfeils | 6 hours ago
Rich boomers, especially. The widely cited main lever to pull is uncapping the tax. Most boomers didn’t benefit from the cap. Probably also need to add a couple percent to payroll tax generally, though, too.
StrebLab | 5 hours ago
Hard disagree. Because of the extremely progressive nature of social security and the structure of it with the bend points, rich people (including boomers) massively subsidize the program compared to lower earners.
NationalCaterpillar6 | 5 hours ago
If we are uncapping the tax, we need a way to claw back the money from current recipents that benefited from the cap when they were working.
Undet Talarico's plan, this will be a new Social Security tax applied to unearned income, specifically mom-education loans, Capital Gains and Dividends.
bfeils | 4 hours ago
I would love reform of cap gains taxation generally, above/beyond SS tax.
I don’t agree re: clawbacks though. That’s now how law works. Shouldn’t be punitive against what was the law and structure at the time. Unless you’re implying the latter is the “clawback”?
Demiu | 2 hours ago
You can't just blame every problem on the rich. A non worker boomer is a parasite no matter what. If anything, at least the rich boomers has assets to sell to fund his life, a poor boomer is living entirely by sucking working people dry
fx2600 | 4 hours ago
Boomers didn't create the social security system.
[OP] Sufficient_Fuel5269 | 7 hours ago
Congress finally faces the Social Security crisis: the fund will run out in Congress finally faces the urgency of reforming Social Security: the fund will run out in 2032 and will cause an automatic cut of 22%, which has led more legislators - including Republicans - to accept that income will have to be increased via taxes, especially by raising or eliminating the cap of $184,500 that makes average workers pay proportionally more than high incomes; proposals such as those of Moreno-Warren or Whitehouse-Boyle would generate billions and cover part of the deficit, but not everything, making it clear that mathematics and demography no longer allow continuing to postpone decisions
mista_r0boto | 7 hours ago
The solution is so obvious it’s a manufactured crisis. Almost no other taxes have a max cap.
flamehead2k1 | 7 hours ago
almost no other benefits are linked to Average Indexed Monthly Earnings.
I think raising the cap will be part of a comprehensive reform plan but unlikely to be the only change
OdessyOfIllios | 5 hours ago
There's a website that allows you to play around with some variables to solve SSI and the trust fund. I was playing around and managed to "solve" the funding gap by instituting the following:
•Raise retirement to 69 and index to Life expectancy
•Slow benefits for top 20% of earners by adjusting brackets from 90/32/15 to 90/32/5
•Cap COLA for high-income beneficiaries such that they receive the same COLA as median beneficiary
•Remove tax max on SSI at the $184,500 and institute a 15% benefit credit payments above the current cap
seridos | an hour ago
So you robbed the future.
The 69-year retirement age is wild. Nobody in my family has ever made it that far. I don't support raising the age unless we differentiate it individually on actuarial terms.
All those fixes are BS, complete moral hazard. Step one is let the current benefits be cut. The next is remove the cap, and let that support higher benefits in the future(then where they would be after the immediate cut).
The retired have to bear the cost.
flamehead2k1 | 5 hours ago
maybe I'm misunderstanding your second and fourth point seem to conflict.
does it go 90/32/5/15? or is over 184k still the 5% bracket?
eeaxoe | 5 hours ago
They’re talking about the bend points. That proposal would mean that higher earners get less of what they put in, i.e., once their AIME goes past the second bend point their benefit will replace only 5% as opposed to 15% of those earnings.
flamehead2k1 | 4 hours ago
I understand that in the second point but I'm the fourth point they seem to be suggesting 15% instead of 5%
CarpBussy | 6 hours ago
We have to cut spending. 37% of households collecting social security have HHI > $100k. Going off the 4% rule, we are subsidizing people with over $2.5M in assets.
flamehead2k1 | 6 hours ago
100k isn't a crazy HHI for two retirees.
especially if you're considering social security in that HHI.
you'd also need to exclude social security to back into your 4% number
my parents HHI is 100k but about 60k of that is social security
their assets are about a million which is where the other 40k comes from.
they are comfortable but not living lavishly.
they own one car [Honda CRV], live in a 900sqft 2 bed/1 bath, and spend about 20k a year in out of pocket medical costs
seridos | 6 hours ago
Yeah but I mean that's the problem, retired people are not supposed to live a nicer life than middle-aged workers. That's ahistorical and not sustainable with our demographics. Not just in the US, like the entire developed world.
flamehead2k1 | 6 hours ago
You think a 2 bed 1 bath and a single car is a nicer lifestyle than the average middle aged worker?
Their HHI is lower than the median HHI for 40 year olds in their state and their social security is only that high because my father worked till 70 and delayed collecting.
seridos | an hour ago
Well that's one way to lie with data. You're not comparing Apple to apples.
You need to consider take home pay only, not gross. And include the monetary value of benefits such as Medicare.
flamehead2k1 | an hour ago
You said nicer lifestyle.
If you want to bring up benefits,, I can also bring up that being middle aged has benefits over being in your 70s for lifestyle.
seridos | 38 minutes ago
Sure, if you want to make really terrible arguments, you can do that. Lifestyle is standard of living. You seem to not understand what an apples to apples comparison is. So yeah, you have a good one, there's nothing to be gained from this conversation anymore.
YoghurtHistorical527 | 3 hours ago
So someone who spent their whole lives saving towards their retirement should be punished and not given social security that was promised to them, and that they spent their lives paying into? You think all retired people should be poor? Social security payments are already tiered so that the people that earned less money get a bigger percent of their average yearly salary. You could say that's already not fair to higher earners.
seridos | an hour ago
Keeping a promise makes no sense if it was a promise built on implicitly taking from the future. It's way worse to keep the corrupt promise because it just creates pure moral hazard and leaves the cost on people completely separate from the decision.
StrebLab | 5 hours ago
This comment fundamentally misunderstands what social security is. You are proposing we fundamentally restructure the program to be a welfare program, when that is never what it has been. It's an insurance program. You pay in to it and get a stipend back based on that payment. It's literally called the Old Age, Survivors, and Disability Insurance program. That is why there is a cap. It isn't a welfare tax.
mista_r0boto | 5 hours ago
Which are funded by payroll taxes. To say the system is insolvent due to an arbitrary cap on the payroll tax that funds its payouts is silly. Also to the extent your comment is accurate - we should have gotten refunds when social security was running a surplus and Al Gore called for a lock box for those proceeds (which was never enacted). But we got no refunds and instead the government used those funds for other purposes. The cap can be raised to a higher maximum, eliminated, and/or benefits can be adjusted. There is no political will to do anything until the crisis heats up. Which is just a sign of the reckless politics of this country from both major parties.
StrebLab | 5 hours ago
It still isn't a welfare program. Current tax payers are not paying enough into it for the benefits. Because of the highly progressive nature of the program with the bend points, higher earners are already majorly subsidizing the program. Really everyone needs to be ok with paying higher taxes if they care about maintaining the program, or accept the fact that payments are going to be lower than they expect. Removing the cap, putting even more taxes on labor while capital ownership continues to concentrate wealth in the top fraction of a percent is not the answer.
mista_r0boto | 5 hours ago
Its extremely unlikely that there will be political will to raise capital gains tax or tax capital at rest to fund social security. That actually breaks the illusion that the program is insurance at all and makes it look exactly like welfare. I don't disagree with the argument you are making on gains going to capital over labor at all. Raising the base rate paid by employees and employer may be possible as well, but likely only in the context of also lifting the cap significantly. Just my two cents.
CaliTexan22 | 14 minutes ago
For the years when SS ran a surplus, we banked the excess. But we’ve been drawing that down since the time SS went into deficit.
Pretty simple, really. Too few workers now paying in, recipients living longer than the projections, etc.
OddlyFactual1512 | an hour ago
>instead the government used those funds for other purposes.
That is false
mista_r0boto | an hour ago
Its not false. The treasury borrowed those funds and used them for general government expenses giving treasuries in return.
OddlyFactual1512 | an hour ago
How do you think The Treasury works if not exactly that?
CaliTexan22 | 10 minutes ago
Those treasuries are being redeemed to fund the current shortfall in the system. They’ll be all used up when that 6 year mark is reached.
Key-Organization3158 | 7 hours ago
Because it's not a tax. The benefits are capped as well. It's a security program. But the system only works with infinite growth.
farrowsharrows | 7 hours ago
No the cap should be on payout not taxes into the system.
User-NetOfInter | 7 hours ago
You’re delusional if you think that would be enough to fill the gap. Would be a rounding error.
Cicero912 | 6 hours ago
It would eliminate the majority of the gap (I think like 50-60%). Gets it to like 85% funding iirc
User-NetOfInter | 45 minutes ago
Only if they do not increase payouts for those earners as well.
That’s a 13.6% income tax increase between employee and employer
farrowsharrows | 7 hours ago
I don't think you know what you are talking about. I also didn't say the only required changes. Removing the tax cap will by itself ease a lot of the manufactured crisis.
GhostofBeowulf | 6 hours ago
...The tax cap reduction would push funding out to like 2080 or some shit. You have no idea what YOU are talking about.
User-NetOfInter | an hour ago
Only if they cap benefits as well
StrebLab | 5 hours ago
Good luck explaining that here. I am not sure when an economics sub got brigaded by a bunch of people who fundamentally don't understand economic policy, but here we are.
morbie5 | 7 hours ago
> Almost no other taxes have a max cap
That benefit is capped too. And high earners usually get less benefits relative to what they pay in, look up bend points and special minimum benefit.
Also, there are plenty of other regressive or functionally regressive taxes in existence, sales tax, liquor taxes, etc.
I do think there is room for some tax increase on high earners to help fix SS but those that think you can just get rid of the cap and also not have any other reforms like the retirement age going up are dreaming imo
Test-NetConnection | 7 hours ago
Oh no, whatever will the higher earners do if their income is subject to the same tax as everyone else? It's simple - get rid of the income tax cap and deny benefits to individuals making more than a few hundred thousand a year. The rich really don't need social security income, but they should absolutely be paying into it more.
morbie5 | 6 hours ago
> whatever will the higher earners do if their income is subject to the same tax as everyone else?
They make up for it because they have to pay way more in federal income tax, the federal income tax is very progressive
> get rid of the income tax cap
There is no federal income tax cap, you either made a typo or have no idea wtf you are talking about. The federal income tax and the SS payroll tax are not the same thing.
> The rich really don't need social security income
200k in year in income isn't 'rich', matter of fact in HCOL areas is is just at the upper end of middle class
> but they should absolutely be paying into it more
See the part where I said: I do think there is room for some tax increase on high earners to help fix SS
Test-NetConnection | 4 hours ago
Only standard income is subject to social security tax, and only up to $184500. That cap needs to be removed.
morbie5 | 3 hours ago
So you admit you were wrong when you said the income tax has a cap?
> That cap needs to be removed
That is an opinion, not a fact
flamehead2k1 | 7 hours ago
Deny benefits to people who previously made a few hundred thousand a year or who make that much a year in retirement?
Those are very different groups
Test-NetConnection | 6 hours ago
Those that make it in retirement.
liquoriceclitoris | 7 hours ago
just take all the rich people's money entirely and give it to the poor people
Leading-Debate-9278 | 7 hours ago
Finally you get it.
At a certain point, they DON’T need any more, and they didn’t work for it, and don’t do anything good with it.
Outragedmoss | 7 hours ago
I don’t think you “need” a lot of things. Should the government disallow you having them if on assistance?
Troutalope1 | 7 hours ago
It's utterly fucking insane that it exists
Arrantsky | 6 hours ago
The repeated borrowing " and not paying back" by Congress has put the strain on the system. Running a deficit, year after year, paying interest on huge debt service to billionaire mega Bankers, is the capstone on the "Pyramid " con game.
nochinzilch | 5 hours ago
The third rail was not tax hikes, it was benefit reductions.
Adding characters to somehow improve the quality of the sub? Because everyone knows quantity equals quality.
makemeking706 | 7 hours ago
In before they broadly label it welfare and denigrate anyone who relies on it, and still win support at the polls.
Given that countless people have been banging this drum for decades, there is absolutely no scenario where they save it let alone ensure that it is adequately funded. They're just praying it runs out under a Democratic presidency.
AvailableYak8248 | 7 hours ago
And when the same voters complain, they will blame democrats
mazzmond | 7 hours ago
"Save Social Security" Payroll Tax Cap Proposal: Details & Analysis
It's not enough to just uncap it for high income earners though. Will likely need a combo of increasing retirement age, increasing taxes for everyone, plus maybe uncapping it.
EmergencyThing5 | 7 hours ago
That’s literally the only way it will get fixed. Just about everyone (except the destitute) will have to contribute to the fix. There’s literally no way the folks at the top end of the income spectrum are just going to sit back and eat a relatively large tax hike for a program that isn’t all that important to their well being. They will absolutely derail any such plan that doesn’t share the pain.
I get that people don’t like hearing that, but it’s definitely the reality. Those folks (who have disproportionate political power and influence) would 100% prefer to not pay any more and just deal with the big cut in future benefits. We all have to get used to the idea that the pain will be shared (even if the higher income people absorb a big chunk of it).
Ok-Post2247 | 6 hours ago
This is the only rational post about this I've seen in a long time. Everyone will end up having to give something up.
Demiu | 2 hours ago
No there are definitely other ways to fix it.
OddlyFactual1512 | an hour ago
Uncapping it covers 2/3 of the shortfall. How about we do that today, then debate how to address the other 1/3?
oboshoe | 6 hours ago
That's the plan? To make health insurance ever MORE expensive?
Gee thanks.
3RADICATE_THEM | 6 hours ago
Old ppl are the plurality of voters, so of course they're going to support tax increases primarily on younger ppl to support this. It's political suicide to suggest otherwise.
MrE134 | 6 hours ago
I know this makes me sound crazy, but I was never too worried. DC is all about brinksmanship and this is a problem tailor made for a last minute solution.
allllusernamestaken | 5 hours ago
> this is a problem tailor made for a last minute solution
The longer it takes to fix it, the more drastic the action needs to be.
N0b0me | an hour ago
Better to just let benefits decrease then to make any sort of radical change. If it was further out I'd say it would be best to raise retirement age or reduce cola, which would still be good changes, but they don't have enough time to come into effect while keeping benefits solvent.
OddlyFactual1512 | an hour ago
Or, maybe tax enough for the government to fund its obligatiion.
PIKFYVE | 7 hours ago
Incompetent politicians on both sides of the aisle who failed to invest the social security trust fund in something other than a 100% bond allocation.
churningaccount | 7 hours ago
Letting the social security trust fund be invested in public companies is a risky proposition that was specifically disallowed by the original lawmakers for a couple reasons:
Also, the social security trust fund is kind of an accident. It is the result of uneven generation sizes. In a "perfect" world with an absolutely steady number of retirees, the inflows would match the outflows exactly and there would be no need for savings. And this is because social security is not really a retirement savings plan but actually insurance against elder poverty. Therefore, it was designed to operate as insurance companies do: using inflows to fund outflows, and not allocating one's specific contributions to themselves alone, but instead spreading out the contributions using a progressive formula. You may disagree with this design, but that was the original intention and any transition to something that is more akin to a mandatory savings system like, for instance, Australia has, would require a big transition and a lot of political capital.
OddlyFactual1512 | an hour ago
Norway's Government Pension Fund Global is the largest sovereign wealth fund in the world, with assets exceeding $2.1 trillion.
Why do we constantly make the arguments that the US is both so great at everything, but so incompetent that it couldn't possibly do things other nation's do to benefit its people?
PIKFYVE | 7 hours ago
Direct Indexing would have been a very simple way to do things.
churningaccount | 7 hours ago
Direct indexing still allows for plenty of corruption.
For instance, is it direct indexing of the total market? Or of an index like the S&P or Russell 3000? Whichever index is picked, the *private company* that curates that index will have more power. If it's total market, then who is to decide the minimum cap size limit of companies that are invested in? Lots of funny business can happen with small and micro caps when trying to "direct index" the total market. And when there is an IPO, who decides how quickly to invest in it?
The list goes on. There is also the problem of rebalancing schedules and tolerances, etc. On a very high level, it could even be argued that the choice of something like the S&P 500 over the total market could be seen as government putting its finger on the scale of the balance between big and small businesses.
It would be almost impossible to legislate complete passivity of investment decisions.
PIKFYVE | 7 hours ago
Norway has a $2.2T sovereign wealth fund invested 70% in equities. CalPERS is invested in equities and alternative investments. This is not rocket science.
Our government invested the entire social security trust in bonds for decades while the s&p500 returned 10% per year nominally. That is malpractice.
Jack Bogle should have ran the damn thing.
churningaccount | 6 hours ago
Well that's just it, though. Social security is not a sovereign wealth fund, which are most often not funded by taxes (Norway's doesn't even pay out directly to their citizens, it is used to fund the government budget). Social security is also not a pension plan like CalPERS in which your contributions are (theoretically) allocated for your future self and yourself alone. Instead, social security is an insurance program.
If you wanted legislators to pivot to a national pension or mandatory savings scheme, then there are some valid arguments for that. Australia's superannuation program has been very successful, for instance. The republicans often use this as an example of what they want in the US.
But at the moment, social security is structured as insurance, of which the trust fund is a consequence of uneven inflows and outflows due to mismatched generation sizes. Since the trust fund is not meant to build or store wealth, there is no mechanism in the law for it to be treated in any manner other than essentially a giant cash account.
wipeout | 6 hours ago
Insurance companies invest the float, so there is precedent for the idea u/PIKFYVE is proposing.
churningaccount | 6 hours ago
Insurance companies invest the float because they are allowed to have a 20% profit margin. So there is plenty of float to invest, and plenty of margin for losses before it endangers payouts to the insured.
Social security is theoretically designed to match inflows to outflows, with minimal margin, so the very existence of the trust fund is just a side effect of that and not a core component of the program.
I agree that what u/PIKFYVE is proposing could probably be reasonably implemented with enough political capital. I'm just sharing the reasons why it hasn't yet, why the original creators of the law didn't envision the need for it, and why making such a change wouldn't just involve snapping one's fingers and just investing the trust fund, but would require a reimagining of how the entire program is structured.
Less-Cartographer-64 | 7 hours ago
The solution is removing the income tax cap, not investing the fund in more volatile investments.
PIKFYVE | 7 hours ago
My comment was referring to the decades of time where payroll tax revenue exceeded benefits. No pension/sovereign wealth fund should be invested solely in fixed income securities. But that’s what our politicians did.
I don’t share your view on the cap. But that really isn’t the point I was trying to make.
morbie5 | 7 hours ago
The 'trust fund' was always fake, it was a political gimmick
Virtual_Magazine_860 | 5 hours ago
Honestly my 4 year old sheltie has more maturity than the whole population of voting Americans and congressman averaged as a whole. It appears they vote for their extinction almost every election. My dog isn't that stupid. With that said it's exactly why I studied economics, to defend myself from these people's actions. I hope you are also doing what you need to do for yourself. Voting appears to not be working.
IKillZombies4Cash | 4 hours ago
Invest in the system and not war. Dont give us all $5000, out the 1.3T into the system. Reduce benefits to people who absolutely do not need it…or just keep doing the same think and trickling down all that lovely wealth all over us all /s
Joltizer | an hour ago
Very sad to see. Social security is nothing more than a wealth transfer from the poor to the rich. It may very well be the start of the decline of the US from being a world leader to becoming the UK
Illustrious-Swan-638 | an hour ago
Maybe im in the minority, but I support tax hikes to make social security solvent. Without, id be poorer in retirement. Even with my 401k contributions
dt531 | 44 minutes ago
Lifespans have been increasing, but the retirement age has not changed. This SS has to pay benefits for longer and longer. We should index the retirement age to expected lifespan, increasing over time as lifespans increase.
SDAztec74 | 7 hours ago
These are the same solutions that have been offered for decades. The only roadblock has been complete lack of political will. Remove the cap and put in some forms of means testing to make sure those at the upper income/wealth percentiles get some amount but not more than is necessary.
And done.
CosmicQuantum42 | 7 hours ago
What is the incentive to save if the government is just going to reduce my SS in exchange.
boeings_door_plug | 7 hours ago
Not sure what you mean.
The government threatening to come after young people in order to babysit boomers, who were gifted an absolutely absurd pathway to stable retirement but squandered it while telling everyone else to pull themselves up by their bootstraps, has been the modus operandi for the last 20+ years.
In other words, you should always have been saving in preparation for this. If you haven't started, it's not too late. Even just an extra 10 bucks a week put into an investment vehicle starting now could be 100k extra by the time you retire.
Boomers, including even your own parents or grandparents, were always going to come after your retirement in order to fund theirs.
thewimsey | 2 hours ago
> who were gifted an absolutely absurd pathway to stable retirement but squandered it while telling everyone else to pull themselves up by their bootstraps, has been the modus operandi for the last 20+ years. >
Oh bullshit.
You are just taking your daddy issues out on an entire generation.
>while telling everyone else to pull themselves up by their bootstraps,
Sure they did, buddy. Every boomer did that.
Or maybe it was just your parents?
>> who were gifted an absolutely absurd pathway to stable retirement
Uh huh. Absolutely absurd.
TL;DR: he hates boomers because his parents were mean to him.
Steric-Repulsion | 7 hours ago
Means testing based on current asset value would be challenging, whereas means testing as a function of total lifetime income would be a snap. So there's your incentive. Once your lifetime income exceeds the threshold, your Social Security payments would be canceled unless you could prove you were broke for government-approved reasons, so you'd better have something saved.
oboshoe | 6 hours ago
which is the complete opposite of how it is now.
your plan would jack SS expenses to the moon instead of saving money.
MatthewSWFL229 | 5 hours ago
Holy fuck I'm so sick of this. The only thing they need to do is remove the Caps so that everybody pays The same as a percentage of income. Right now the rich have to pay so little but no heaven forbid a republican actually call that out because then all their funding goes away cuz the only people who prop these people up are the rich
Partisan90 | 6 hours ago
How about tax hikes on… the rich. You know the people use the most resources, take the most, and contribute the least amount to the system. Those people. Tax those people.
LeapIntoInaction | 4 hours ago
Oh please. They've been repeating this story every few years since at least the 1980s. Try to show some critical thinking skills. It's bullshit.
olionajudah | 7 hours ago
In fairness, with the wealthiest Americans completely insulated from representative taxation, and the democrats likely to increase their control in Congress, the GOP are probably just happy to avoid taking the fall for SS insolvency they are largely responsible for
coalescence2071 | 6 hours ago
No one is going to raise taxes. They will just let social security lose its value and say “it is already a Socialist abomination which should be phased out…”.
N0b0me | an hour ago
Fingers crossed
shortyman920 | 3 hours ago
How about they roll back the corporate tax cuts Trump made in both terms. Or add additional social security contribution tax to corporations. That’ll generate hundreds of billions.
And then remove the SS cap
OddlyFactual1512 | an hour ago
Do both. And, eliminate every corporate tax loophole. And, raise corporate tax rates to about 10% above what they were in 2016. And, give the IRS authority to levy massive fines for corporate tax evasion.
htffgt_js | 2 hours ago
Found out that there are SS offices over the world where even non US citizens can claim SS. They obviously worked in the US at some point in time but maybe SS can be restricted to folks living in the US or probably do COLA adjustments for other countries.
Folks in other countries have access to social programs there as well , so why provide them with the same $ amount as someone living here ?
thewimsey | an hour ago
> Folks in other countries have access to social programs there as well , so why provide them with the same $ amount as someone living here ?
Why do you assume that they have access to social programs in other countries if they are from the US?
OddlyFactual1512 | an hour ago
A: Ignorance
htffgt_js | 58 minutes ago
Sure, one example - folks who come and work in the US on visas (like H1b) can work and qualify for social security while still being citizens of another country.
Later go back and live in their own country but still get to claim social security.
JohnnyLesPaul | 5 hours ago
Tax hikes on the rich, MFs! Put back what you gave away and we’ll be all right but don’t touch my SS or raise my taxes cause you cut taxes for your rich friends!
Educational-Bank-353 | 5 hours ago
They refuse to tax billionaires but are eager to tax the retired and disabled middle class.
They're in for a surprise. Social security recipients won't stand for it. And they vote.
Joltizer | an hour ago
If you seized all of the wealth of billionaires you'd fund social security for a few months at best
At some point kids like you are going to have to grow up and make some tough decisions