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This is a bad proposal. Right now it would affect almost no one. You would essentially have to be earning at at the cap for your whole life and have a partner at the same level. That's the top 0.05% of couples right now.
But these caps rarely get changed or updated, so eventually this will start to affect a significant amount of middle class workers. Just look at congress making a portion of social security taxable under Reagan. At the time the threshold was set high enough to only affect a small number of recipients. Fast forward 40 years and now it's fairly common for average earners to recieve enough benefits that they surpass these once wealthy only thresholds.
This is just a veiled attempt at cutting benefits for younger Americans without blowback because it sounds like it is formed to only target the very wealthy.
And they don’t, from a demographics stand point, but I’m worried about entrenched CEOs and politicians. No one willingly gives up their place at the top.
Bullshit. I, as a Gen X, have been fighting the boomers my entire life. We have never had the numbers or any power. Even now with millennials starting to occupy both houses of congress, there are still more boomers in the senate than Gen X.
The big problem with Gen X right now isn’t them taking power but voting red. Gen X went for Trump 54-44, while for boomers it was only 50-49. Millennials and Gen Z voted for Harris by big margins. Gen X handed the election to Trump. That’s having a huge effect, regardless of whether Gen X is getting into power themselves.
> Millennials and Gen Z voted for Harris by big margins.
Gen Z voted for Harris by a significant margin (despite the fact that a small majority of men under 29 went for Trump); the margin was 58-39 for Harris. (Still, 40% of Gen Z went for Trump).
Millenials were almost evenly split, going 50-48 for Harris.
The sources I’ve seen had millennials at 51-47 and Gen Z 52-46 or 54-43. But I imagine there’s a range among different sources so entirely possible that some reported 50-48 for millennials. But the point still stands - Trump would not have won without Gen X.
I was a kid when Nixon resigned.
I was sure that with him out of the way, all the old warmongering fucks would disappear.
Alas, that mentality is a function of the human genome.
We'll always have dark triad types.
We have to build social systems that thwart them.
Our Constitution did a pretty good job of that for a long time, until MAGA infected all the GOP.
That’s not how it works though, generationally, through history. What actually happens is the trend line continues in the same way it continued before because it’s not the people who shape the positions in society it’s the positions in society that shape the people. The current younger generations just become the “greedy boomers who control everything” for the generations that come after them.
The whole “this generation is doing that to this other generation” is just rage-bait for clicks … if all the headlines just said “people with money don’t want to give it up” you’d have much lower engagement because everyone would just say; “of course they don’t!”
However, if such a cap was implemented, then it could be used if the contribution cap is lifted. That is, remove the cap so that billionaires are paying for more towards Social Security, but they do not receive more than the benefits of the cap. As time passes, adjust this cap based on cost of living requirements.
I understand that your concerns are the following, though:
They will never adjust this for cost of living.
They will never tax the rich to make them pay for Social Security programs.
People will still complain about billionaires paying taxes for something even though billionaires currently stop paying after Social Security tax after ~$187,000 of their income.
Edit: Added italics section because people were confused.
The income tax cap is $184,500. Anything higher than that is not subject to Social Security tax; therefore, /u/ocposter123 is correct to say that they do not pay into it.
A. I said "Earned Income" which IS subject to FICA
B. I'm well aware of the income cap, hence why I said they're not good enough to completely avoid it. I brought up multiple examples - Speaking engagements, classes, etc. all things that'd generate self-employment income.
So, no, the guy is NOT right to say they don't pay into it.
>>they're not that good to completely avoid earned income in some form or another.
That means - Schedule C income from speaking engagements or other activities, Self-Employment income from K1 activities or even a W-2 wage from the company they own, etc.
So no, they're not getting their money all from capital gains.
They can donate it to reduce tax liability. Everything important is capital gains and dividends. PE and VC folks do things the same way, structuring the profits as capital gains and avoiding income taxes and social security. It's the high earning salary schmucks in medicine and tech or whatever that get hammered
Sure, they can take deductions to reduce their income tax liability, but that has literally nothing to do with FICA.
>Everything important is capital gains and dividends
Again, no. Their income streams are FAR more variable than you to admit.
>PE and VC folks do things the same way
No they don't, unless they force the company to convert to a C-Corp which usually isn't always the most prudent compliance decision for a startup. Even then, those PE & VC firms pay wages to those high up or guaranteed payments.
>structuring the profits as capital gains and avoiding income taxes and social security.
That's not how that works, but alright. Like I said unless you force the company you invested in to switch to a C-Corp, you're getting flow-through income including their ordinary income generated when they are profitable.
>It's the high earning salary schmucks in medicine and tech or whatever that get hammered
Again no, you need to stop reading whatever biased sources you're getting your info from as its just not true and doesn't make sense from a tax compliance standpoint.
As I already said - these guys do speaking engagements, sell books, do interviews, sell classes, etc. that's ALL earned income that's subject to FICA. None of them are good enough to completely avoid FICA in any given year.
Directionally true-ish regarding income tax vs capital gains, but FICA is being paid by basically everyone that’s making real money, it’s just not a meaningful amount because of the caps. It’s meant to be a broad based tax. SS maxes out at like 10k/yr (or 20k if you include employer contribution).
Yes, the point is that we should remove the income tax cap so that billionaires contribute. After $184,500, they are paying nothing. If we were to remove the income tax cap, then it would be feasible to set a yearly benefits cap, even if that cap was really high.
Social Security is not an investment plan. It is an insurance policy for the government to reduce its burden to support individuals if their investments or planning fail.
That's a nightmare though because you're just putting in more money for the people that need it now and still deal with the possibility that the people pay into it now won't have social security when they get there.
If it was truly about creating something for the workers so they can have something in retirement wouldn't you be better off just having everybody save/invest their own 2% so it never goes insolvent on them?
Why do we need to prop up this system? All these suggestions of "increase taxes to make it work" but you mention cutting benefits and it's like you kicked a puppy.
What is the point of social security? Who is it supposed to benefit? The largest beneficiaries are the highest earners
Relative to what they pay yes. The problem is that the system is going bankrupt because of the ones that get the least relative benefit, but the highest quantitative benefit: the highest earners
It’s not really going bankrupt. We could cut benefits 20% and remain solvent. Or raise FICA tax by 2%. Or a variety of other solutions. But politicians are afraid to mess with Social Security and most people want someone else to pay for it.
> The problem is that the system is going bankrupt because of the ones that get the least relative benefit, but the highest quantitative benefit: the highest earners
Those that get the least benefit almost always pay in less than they get out, I'm 100% percent sure what you are saying tho. There is a minimum benefit if you work for x number of years at full time, I don't know the exact details off hand but it exists. It is a myth that social security is a 100% earned benefit, it isn't. I'm not saying I'm against this, just pointing out a fact
Also, those that pay in the least get the same Medicare benefits as those that pay in a lot more. And that doesn't even get into Medicaid or MSP
Yes but that's exactly the issue. The taxes collected do not cover the benefits paid. That's why social security is one of the largest contributors to the national debt.
Why we have a program like this for people who don't need it is beyond me
I probably will get more out than I put in, but I will not get close to the return I would have had if my contributions had simply gone into my 401k. I would have about $2 million at retirement in that scenario
You're reinforcing my point. If millionaires are not subsidizing this system and it's also worse for them than other options, what is the point of this system for that group?
Oh, I’m sure we could get much closer to that problem if we started, no? As opposed to us collectively just deciding the elderly should be sacrificed so they can have a third yacht.
If you uncap the contributions you still have a deficit. To the above posters point there’s no broad solution to the aging population issue except more people or robots.
Nope, those people will retire and collect social security, thus adding to the problem in the future. Immigration only works in this scenario IF the inflow rate exceeds the necessary rate of replacement to create more younger workers to subsidize the retired, which needs to be around 4 workers for every recipient.
By 2035 it's expected that we'll have 70 million recipients meaning we'll need 280 million workers to support them to keep the system solvent. We currently have 162 million people employed right now...there's ZERO way we're adding 118 million workers to this country in 10 years with a low rate + immigration.
To make an even bigger point - by last year we only had a population of 51 million foreign born individuals, an increase of around 5 million a decade ago.
So, that's roughly an increase of half a million per year in the population due to immigration.
There's literally zero way we're going to have enough workers, even with immigration, to fill the necessary funding gaps.
This assumes that immigrants (including their minor dependents) are net taxpayers (or close to net taxpayers). The data on this comes for ACS survey data which I don't put much faith in tbf
And this assumes that we don't bring in tons of older immigrants, which we in fact do for some really, really stupid reason
This might be a shock to you, but the US already has the most progressive tax system of any developed country in the world.
Yes, other places tax their wealthy more, but they also tax everyone more. In most norther euro countries you're in the 40% brackets before you even earn six figures.
This policy is addressing that directly though. The highest earners are also the highest beneficiaries of social security. You can't balance the budget by just looking at taxes and ignoring benefits.
I went to high school with a special needs kid who used to confuse tax rates and tax systems. That shit was hilarious. The kid would say the US has a progressive tax system when he meant the US has progressive tax rates.
A competent government which was not committed to destroying social security could fix the problem fairly easily. The Republican Party has made their whole platform depend on the United States having a bunch of mysteriously unsolvable but terrifying problems, so they've spent 50 years making sure this doesn't get fixed.
A benefit cut will have to happen because people have fewer children. There is no way around it but it doesn't really matter because a generation that chooses to not have children will not retire either. It really has nothing to do with how old you are today and everything with how many working age people there will be when you are old.
More like work until they can't anymore. Yes it sounds a bit grim but I'm not aware of any alternative. Not having children is a choice people are free to make but I'm not sure if they realize they're also choosing to forego retirement. As well as any chance of being cared for when they're old, frail and physically incapable of doing it for themselves.
Social security was basically structured so that if you lived past your expectancy (where you probably couldn't reasonably work anymore) you wouldn't be destitute.
The ages need to be raised, it's not a retirement plan to fund people for 20 years.
You may be and probably are right, but like all governments, they know what they doing but the majority won’t see it that’s all they need is the majority
You need to increase the threshold where you stop paying into SS. Right now it is at $184,500, meaning every dollar you earn after does not go towards funding SS.
Half the paper is on whether and how to index the cap.
>Just look at congress making a portion of social security taxable under Reagan. At the time the threshold was set high enough to only affect a small number of recipients. Fast forward 40 years and now it's fairly common for average earners to recieve enough benefits that they surpass these once wealthy only thresholds.
>The Trust Fund Solutions Initiative whitepaper from CRFB outlines the Six Figure Limit (SFL) proposal, which would set a $100,000 cap on the total benefit a couple retiring at the Normal Retirement Age (NRA) can receive starting this year. The SFL would be adjusted based on marital status and claiming age, with a $50,000 limit for a single retiree. A couple in which both spouses began collecting benefits at age 70 would face a $124,000 limit, reflecting the 24% delayed retirement credit. A couple with both spouses collecting at age 62 would face a $70,000 limit, reflecting the 30% early retirement actuarial reduction. Different claiming ages would result in a blended limit.
This isn't a 100k cap on social security, it's a 50k cap on social security lol. Currently if you are sitting at the max benefit amount you get a bit under $5,200/mo, which is a little over 62k/yr. This would be an immediate 12k haircut to those people, but also a haircut for most anyone past the second bendpoint.
Furthermore, very few couples have two people that have max benefits, often it's one breadwinner with a large benefit and a spouse with a comparably smaller one. So that hypothetical couple would be taking a larger haircut as the breadwinning spouse sees a reduction while the other already has a smaller benefit.
There's lots of ways to fix the funding issues, but this seems like a pretty harsh hit for a lot of recipients that's pretending like it's only targeting super high earning couples.
People who collect early are always getting less than they get at full retirement age. Most work part time. And the benefit keeps getting recalculated to full retirement age.
The current max benefit at age 65 is ~$50,000. A person has to work their whole life earning at least $176,000 per year (inflation adjusted) to get that benefit. This is not taking from the poor.
There is no intention in the white paper to increase the cap based on inflation. It intentionally leaves it locked at $50k/person/year; that's how it "solves" the problem.
77% of the federal budget goes to old people, ~~defense~~ war, interest. You have to do something. If it's not coming from the top it's coming from bottom/everyone else through inflation. It's going to hit doubly hard in 2033 when the fund starts getting huge influx of debt to fill the gap.
You have to come at it through all angles.
You are also just wrong, the cap is the merged benefit. They don't cap one earner.
>often it's one breadwinner with a large benefit and a spouse with a comparably smaller one. So that hypothetical couple would be taking a larger haircut as the breadwinning spouse sees a reduction while the other already has a smaller benefit.
If two people together are under 100k then neither have a reduction. If someone has 60k and someone has 10k, they aren't reduced to 50k&10k(60k). They both are under 100k so no cut in benefits they get 70k. If one was 40k and one was 80k then they'd get cut to 100k. If one was 60k and one was 60k they'd get cut to 100k.
There is no way to misread what you said. You just misunderstand the proposal.
For married couples they don't look at it, at an individual level. I am 100% sure. That's how it works for anything like this, they effectively treat married couples like a single person with a combined cap of 100k.
Why wouldn't we just raise the cap on contributions for high earners? Oh wait, I know why, because their donors have captured Congress and would rather screw over millions of Americans than have higher income folks pay more.
It's also because the way it's designed is that when you raise the cap you have to pay out more to those contributors. So that part would also have to change
Yes and no. The tax is a flat percentage of labor income, but the payments are a weighted formula. Higher income folks get less of a return on the tax than lower income earners. However, addressimg both would provide better long term funding stability.
Raising contributions for high earners is much more fair than cutting benefits for huge numbers of beneficiaries. One of them impacts people who can take the hit, and the other hits people when they can least afford it.
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
Ideally you would just get rid of the cap entirely and make it actually progressive so that people with the highest incomes pay proportionately more. Doesn't seem that complicated to me.
It's complicated because people think it's something it's not. People think you pay into it and your money sits in an investment account until you retire and then your benefits come out of that. It's more similar to a ponzi scheme than that.
Also high earners are still taking out more than they put in, so they're not paying for the low earners. Younger workers are paying for current beneficiaries. Eventually it's the future generations who will get fucked
> No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment).
So what? They can afford it.
> You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax.
This is total nonsense actually. There are over 3 million individuals who make more than 250,000 USD per year. Not households, individuals. As for the rich, either way, they get in other ways when it comes to tax and we shouldnt be shy about taxing them. US taxes are exceptionally low among developed countries. Not a bad thing, but there is plenty of revenue to raise.
> Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
The horror of a top 5% household having to make some cuts.
20% of people exceed the cap over their career. It's always nice to see people willing to give themselves more by saying those who make a bit more than them should pay more. Why not just make it real welfare. You and I have to keep paying in, but you don't get a penny back if you make anything more than $10k less than June1994 does? That too would save the program.
>Here's what the researchers found for Americans by age 60. 70 percent will spend at least a year in the top 20 percent of earners
53 percent will spend at least a year in the top 10 percent
36 percent will spend at least a year in the top 5 percent
11 percent will spend at least a year in the top 1 percent
The U.S. already has the most progressive tax system among developed countries. So do you think it should be even more progressive, or are you arguing we should tax longer income more?
It can continue being just as progressive with higher taxes. The budget needs to be more balanced. That’s all there is to it, and you start by taking more from those who can most afford it.
Or cut unneeded spending. We don't need to be the world's military. We don't need to provide "aid" to so many countries. Also, there is an option on the Federal income tax forms to check a box to "donate" more toward paying down the national debt. Have you ever checked this box? If not, then who are you to say what others should give to what you determine to be a "need" that you yourself have not volunteered to support?
Of course I am taxes just like everyone else. But I am not running around demanding that everyone who makes more than me pay a higher tax rate. You are.
Yeah, I don't think anyone LIKES paying taxes but they serve a greater good mostly. I wouldn't hate it as you put it but I would probably want to see some other changes as well. I circle back to the original idea of SSI. It was meant to give our senior citizens a sense of dignity and welfare those last few years of their life. In 1950 the average life expectancy was ~68, and the collection was around 62-65.
Our average life expectancy now is ~80. That's 12 years! It's another case of the world changing but not policies. I think we should remove the cap or increase it significantly while changing the retirement age to match our current statistics of life expectancy.
This is just annoying to me because the social security benefit formula is already extremely progressive, it's a very high income replacement rate at low income levels and the opposite at higher levels (the famous 'bend points'). So this is just saying that even if you manage to earn so much income across your lifetime that, even despite the bend points being as they are, you managed to hit 6 figures, then it must not have been progressive enough.
Sir/ma'am, this is Reddit! Don't go introducing facts to the comment section that question the delusion that this would be punishing "the rich like Bezos and Musk." This is how you get downvoted.
I'm going to throw a curveball, kinda. What if we tax automated labor? The value of human workers' labor pays FICA taxes. But do the same thing with robots and AI and no FICA is paid.
Or maybe this. I never liked payroll taxes anyway, it discourages hiring workers.
Let's take FICA straight out of business profits instead.
Then all US businesses, regardless of how they operate, will be providing for social security and Medicare for all Americans, in measure to their own profits.
Then even if they automate away every job, FICA is still funded anyway. We could then standardize benefits too, instead of bothering to measure everyone's benefits to their contributions.
This also helps startups or struggling businesses a bit, since they won't have to pay payroll taxes even if they aren't profitable.
Same trick was used in 1978 when the $3,000 capital loss deduction limit was established by Congress. Back then it was a meaningful tax break for those who invested. It has not changed for 48 years and it will not change the next 48.
You know, god forbid we raise or eliminate the SS tax cap and raise more revenue. Nah, fuck those seniors (and children, disabled people) living off the gov't...
When referencing the 'cap', you must differentiate between the cap on high income earners or a cap on benefits received. The same word is used for both scenarios.
>Plenty of us plebes will be relying on capital gains for our retirements.
"Plenty of us plebes" fuck off. The average person saving for retirement is saving entirely in 401ks, IRAs, and HSAs which are all tax advantaged yet still taxed at income tax rates either on the front end or back end. Capital gains taxes won't apply to them at all and for the less than 10% of us that max out all three and have to put additional savings in taxable brokerages, we'll fucking live.
The only time the average person even has to think about capital gains is when selling a house, and that already has a huge exclusion for primary residences.
>Put an amnesty until some number like $1M and we’ve got a stew goin’.
Nah, fuck that. Capital gains are already taxed at a lower rate than earned income at every level and that needs to stop. Make capital gains brackets at least as progressive as income taxes, and then maybe, maybe you can carve out a bigger primary residence exclusion for VHCOL homes.
Until then I don't want to hear a fucking peep about cutting taxes on income that isn't earned through labor.
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
Almost no one commenting cares. In their minds, anyone who makes $10k more than they do should pay a 100% tax on that income. Most of them would gladly vote for those in HCOL areas with middle-class jobs to pay 90% income tax just to "eat the rich."
This tax is the opposite. It benefits high cost of living areas at very high income levels because of the cap.
The payments are progressive, but the tax itself is regressive. As individuals make more, the cap causes the system to change in the high-earner's favor.
Also your arguement is made up and basically the definition of a strawman.
You can start donating directly to the government. Nothing is stopping you for starting to tax yourself that extra amount today. Don’t be selfish, please let me know if you need the direct link. Happy to provide unless you are just virtue signaling
It is ONLY 6-figures IF it a COUPLE. Single retirees would be limited to $50,000 max. Do lawmakers not realize that (2) ppl have the advantage of paying (1) property tax bill, (1) of each of the utilities- light, gas, water, internet. It takes more to run a household with only 1 income.
It's never considered because it would be a structural change to the foundation of how the program works (and why it has survived for 90 years) - what people get back is determined by what they paid in. So, you not only need to eliminate the cap on contributions (which has existed since Day One), but also introduce a benefits cap to prevent massive payouts (something that has never existed).
Yes, we could do that. You could argue it's the fair thing to do.
The fact is that Social Security has a dedicated tax, a dedicated budget, a dedicated trust fund, and has lasted nearly a century because everyone who paid in gets back an individual payment based on what they paid in. You make that change, and suddenly overwhelming support isn't as likely. You can say, "who cares, it's only the Top 20% of people at various points in their life."
You're arguing to change Social Security from an earned benefit to welfare. Welfare doesn't tend to fair well in this country.
I’d argue it’s already welfare. People who pay in less and receive a lower benefit but it’s a higher percentage. They get more of their money back, in other words. So it would really just be tweaking that a bit. But even if you kept the benefit formulas exactly as they are, it would help the sustainability of the program.
I think people who’ve earned much more in their careers can afford to get a little less back in their retirement, but I realize how much high earners hate taxes and not keeping more of what they earn.
I think they’d hate more seniors being destitute which costs more money and hurts society, but some people would be happy to ignore that for more money in their pocket, I realize.
Doesn’t that apply to all taxes? I don’t get “more road” because I pay more taxes, or extra government services. Those benefits are capped too. We have a progressive tax system but for social security we say no, that’s progressive enough
It’s anti-progressive because high earners pay a lower effective rate. The amount of benefit you receive from a tax funded program doesn’t determine how progressive the tax is
It does when the program was purposely structured by design to have a certain level of taxes benefit a certain level of benefits. They are related, and it is highly progressive, as is the entire U.S. tax system (most progressive in the world).
Besides the obvious economic drag, at some point, it literally becomes "unfair" for those that pay almost all of the taxes versus those who pay very little of the taxes. Contrary to general "Reddit" beliefs, many people make it into higher-earning levels through great sacrifice and significant risk-taking that others are unwilling to make. Everyone who makes more money didn't just get there just through luck and evil, greedy stealing.
I pay taxes for public schools even though my kids don’t go, I pay taxes for Medicaid and Medicare but don’t benefit. I pay for roads and don’t drive. Isn’t that how all taxes are?
No. You seem intelligent and surely understand that is not how the system was designed, nor would it have ever passed had it been designed that way. It would not pass even today if it were designed in such a way, even if the American people got to decide via a referendum. Whereas, most of the other taxes you voted would.
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
You are assuming that there are more qualified people to do my job. Big shortage right now. We have been trying to hire a new partner or two for 5 years without much luck.
Do you charge whatever you want as a doctor? I thought there are reimbursement rates you’re stuck with?
Downsizing is a choice you can make. Lots of people say they will work less or move with threat of higher taxation but still choose to make more money even if they pay a higher marginal rate, when push comes to shove.
Your community is going to be screwed when you retire anyway
Hospitals subsidize us. We work for 2. We could easily drop 1 but they would not be able to replace everything we do and would be forced to cut services.
There are 6 of us in group. 4 of us will probably retire at same time in about 5 years. Unless market changes then community will lose services at that time
If you cut back on your hours, then people would take the hours. Nothing would be lost.
Also, the highest marginal rate is 37% unless you are including very high state income taxes.
We should increase the taxable income cap for contributions to Social Security. There is no legitimate argument against it except for those that want to take more than their fair share.
You're misusing that word! "Fair share" is only meant to apply to people who make more than they do. They already pay their fair share (even if, in 47% of cases, that is $0 federal income tax).
If you're already making over $630k/year you probably aren't being paid hourly, but I suppose if you were a doctor or lawyer there would likely be other junior doctors or lawyers that would be happy to take that work.
Well no, because doctors associations like the AMA intentionally gatekeep and control physician supply to keep wages high. No reason a doc in the US should make 2-3x a EU doc despite worse treatment outcomes.
MD. Self employed so paid on production. We have been trying to hire a new partner or two for five years without any luck. Turns out most of the new people coming out of training are not interested in providing all the services we provide or living in our location.
Nonsense non-solution designed to undercut Social Security in the long run. Social Security has a revenue problem, not a payout problem. The population of recipients has grown quickly while the population of supporters has declined. The solution is to add more money, not try to carve off recipients. We need to eliminate the income cap on social security taxes first and foremost.
>Social Security has a revenue problem, not a payout problem. The population of recipients has grown quickly while the population of supporters has declined.
Isn't the definition of a pay out problem then? If the natural level of payers has organically declined since inception, while the natural level of recipients has organically increased since inception then it's inherently a payout issue.
They can add more revenue, but that's not going to be the end all solution to this problem as our birth rate declined.
We’re not making less money, we’ve just moved earnings around. So demographics are irrelevant. We just need to continue to support social security even if labor’s share of earnings is declining. Otherwise we’re simply looting SS to give more welfare to rich people.
>The population of recipients has grown quickly while the population of supporters has declined
That sounds like the opposite of a revenue problem. SS was designed on the benefits principle as a state-forced retirement savings. Now, retirees are promised more benefits than their contributions afforded. The SS trust will deplete in about 6 years. The equitable solution is to give beneficiaries (especially high earners who likely don’t need high SS) less benefit, not tax current workers more.
People making over ~$200,000 pay nothing extra. If you make $100,000,000 per year, ~$99,800,000 of that income is not taxed for Social Security. We should not tax low income employees more. We should tax the rich. Propaganda encourages people to defend the rich against paying this tax and prefer the burden be shifted to those making less than $200,000.
It was started when labor had a much larger share of earnings. While yes the population of working people has declined relative to retirees, we’re making even more money. We’ve just transferred the earnings that used to go to labor, and then to SS, to wealthy people.
It’s completely reasonable to ask that they continue to fund SS in return.
No one is arguing about raising the cap on earned income taxed for SS, the argument/criticism is the claim that it's not a payment problem but a revenue problem. It's a payment problem, which you can fix in the short-term with additional revenue, but it's a permanent payment problem as the population demographics in America continue to skew older with less children/young adults to replace retirees.
This is BS. The credited amount at upper income levels is already poor (12% I think). If you want to raise the tax cap I support that even though that is still a terrible return for those who exceed the cap.
It is not intended to be an investment plan, so it does not matter about the 'return' for people that exceed the income caps. It is a tax that acts as an insurance solution for the government to support individuals that fail to plan or have bad investment outcomes.
I don't have a general objection to limiting the amount that someone can receive - there is already a limit now, though it is partially driven by the contribution cap. I also don't mind having the contribution cap lifted, even though it would impact me pretty significantly. I appreciate the value of Social Security, and that is one way to keep it solvent.
The problem with putting changing benefits is that people made life decisions based on there being no cap. Morally, any change should be made to give people 10 or 20 years to react to it. It really sucks when you have things planned out and then they would say "oooh, too bad, pulled the rug out from under you".
I am fully opposed to means testing Social Security. Eventually that will kill support for it as it will turn into a welfare program. And this level will eventually fall because that is how this works. Imagine having a significant chunk of your wages garnished for this program for life and never getting it.
The key problem with this idea isn't that it limits future benefits but that it changes SS from an actuarial insurance program into a conventional budget expenditure and that's an extremely dangerous precedent. Currently, we pay into SS and at the end we get a benefit that is calculated according to actuarial techniques to correspond to what we put in along the way. If you break that link between paid-in contributions and benefits, you're left with a government spending program like any other. That means it would forever be vulnerable to the budget squabbles and political games that the rest of the budget is exposed to.
So much consternation over a ridiculous problem. In what universe is it a good idea to only hold long duration low yield bonds your entire life to save for retirement.
> Social Security should provide a base of retirement income, not a windfall
"windfall" my ass. The highest earners are already getting screwed by SS, contributing much more than the benefit. Lower earners may have a lower benefit, but it's much closer to their contributions.
Social security is supposed to reduce poverty. Remove the contribution cap. Keep the max payout the same. It's not complicated. It keeps the program solvent.
Those who recite the "raise the cap" speaking points, have no idea what they are talking about. If that actually happened, the rich would be entitled to more of a payout. What they really mean is forcing the rich to pay more and not get nothing back. This wasn't how the program was designed.
The true fix is easy but unpopular. If you look at what the life expectancy was when this was created, we are way over that. It wasn't designed to pay for your restaurants and vacations for 25 years. We need to raise the retirement age by 1-2 years. This also has a secondary benefit to the labor market as we're not having babies anymore and the mass migration jig is up.
Wasn't a thread on this topic just shut down relatively recently in this sub? It wasn't super clear to me why that prior thread got locked, but I would reiterate that we're always talking about people's opinions (particularly vis-a-vis Americans) on economic issues that don't affect them. I did the math the last time this came up, and the mechanics of the SSA retirement benefit make it very difficult for anyone to actually receive $100,000/year in SSA cash benefits (not including valuation of Medicare etc). This version of this proposal (or at least how it's portrayed here) also eliminates any kind of moral hazard scenario where people choose an earlier SSA benefit onset because the cap eliminates the benefit of delaying retirement. A proposal like this has only a small adverse effect on a very small pool of people who are able to collect this large of an SSA benefit.
This kind of solution merits more serious consideration because it causes a relatively minimized amount of pain to a relatively contained group of individuals who are unlikely to suffer meaningfully while protecting the system for everybody.
>the mechanics of the SSA retirement benefit make it very difficult for anyone to actually receive $100,000/year in SSA cash benefits (not including valuation of Medicare etc
It's $100k cap per couple*. $50k/ person. It's a lot easier to get there
In 2019 the average SS benefit was $17,500, last year it was nearly $24,000. That was a 37% increase over 6 years, its entirely possible that trend could continue meaning the $50,000 cap may equal the average by year 30. Also cutting the benefit calculation in half is a great way to turn the middle class against the program.
If we use the social security benefit calculator, you are ALWAYS better off collecting social security as soon as possible rather than waiting, and you want to make it even worse? Social Security is 12.4 percent of paycheck pretax for all working years. If that money were in the stock market, people would get millions of dollars when they retired.
The breakeven age from early to full is usually around 77-80, but that doesn't include gains if one invests the benefits from the years before reaching full retirement age, but most would invest this in safer, lower yield investments. In general, if you're in good health, believe you will live past age 82, and don't need the money right away, it's best to wait and re-evaluate each year.
Not really. The breakeven is 80 before accounting for the time value of money, which if accounted for, would easily push it out more than two years. Plus, for most people, that extra money is more valuable at a time that they are physically able to do things than when they are stuck in a wheelchair. Finally, if you use other investments to fund those years instead of social security, you are forgoing the gains those investments were generating, which were probably higher than short-term bonds, as a portion of those long-term investments would otherwise not be needed for maybe years, allowing for a higher risk tolerance.
Bad as it sounds, when most old people run out of money during the time that they need assisted living, they just go on Medicaid. For all of the old people I have seen that have gone on Medicaid, they have actually ended up in decent assisted living/nursing homes. There is even a whole legal industry around figuring out how to use up all of your assets or how to pass them along to your children so that Medicaid can start to cover nursing home bills instead of your own personal wealth.
Social security is unsustainable and costs a fortune for those up to the upper middle class. Need to cut something, and, no, raising the cap is a terrible idea.
Well, congress could just pay back what it borrowed and poof it’s still fine. You think it’s broken because you listen to talking heads and don’t read the actual reports put out by the trust.
The white paper is well written. And it looks like a good idea although I think there is no harm in taking the taxable limit to 200k too. And future generations aren’t going to rely on it as much as past generations because they have grown up learning to invest.
That every single person does not receive the same amount from social security blew my mind when I learned about it. Nobody in their right mind would ever in a million years implement a program that inconvenient to administer.
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flyingtiger188 | a day ago
This is a bad proposal. Right now it would affect almost no one. You would essentially have to be earning at at the cap for your whole life and have a partner at the same level. That's the top 0.05% of couples right now.
But these caps rarely get changed or updated, so eventually this will start to affect a significant amount of middle class workers. Just look at congress making a portion of social security taxable under Reagan. At the time the threshold was set high enough to only affect a small number of recipients. Fast forward 40 years and now it's fairly common for average earners to recieve enough benefits that they surpass these once wealthy only thresholds.
This is just a veiled attempt at cutting benefits for younger Americans without blowback because it sounds like it is formed to only target the very wealthy.
MeanCryptographer585 | a day ago
This is how social security benefits erosion is going to happen. They won’t get political blowback because the boomers won’t care.
crowcawer | a day ago
Once the boomers are gone things will be better.
It’ll be the time of reclamation
BetFinal2953 | a day ago
Not if GenX has any say about it.
And they don’t, from a demographics stand point, but I’m worried about entrenched CEOs and politicians. No one willingly gives up their place at the top.
a_library_socialist | a day ago
We just don't have the numbers.
shitty-kittie | a day ago
You have the tech Billionaires tho.
a_library_socialist | 17 hours ago
We got the guillotine https://m.youtube.com/watch?v=acT_PSAZ7BQ
Late_Shock_7651 | 11 hours ago
[ Removed by Reddit ]
crowcawer | a day ago
There are plenty of numbers. Look at Turkey.
They can’t put holes in 80% logic.
OriginalHappyFunBall | a day ago
Bullshit. I, as a Gen X, have been fighting the boomers my entire life. We have never had the numbers or any power. Even now with millennials starting to occupy both houses of congress, there are still more boomers in the senate than Gen X.
BetFinal2953 | a day ago
Yeah. The demographics are brutal against GenX taking power.
put_your_drinks_down | a day ago
The big problem with Gen X right now isn’t them taking power but voting red. Gen X went for Trump 54-44, while for boomers it was only 50-49. Millennials and Gen Z voted for Harris by big margins. Gen X handed the election to Trump. That’s having a huge effect, regardless of whether Gen X is getting into power themselves.
deathstarninja | a day ago
so disappointed in my generation.
jang859 | 22 hours ago
Was it the hair metal that did it?
thewimsey | a day ago
> Millennials and Gen Z voted for Harris by big margins.
Gen Z voted for Harris by a significant margin (despite the fact that a small majority of men under 29 went for Trump); the margin was 58-39 for Harris. (Still, 40% of Gen Z went for Trump).
Millenials were almost evenly split, going 50-48 for Harris.
put_your_drinks_down | 23 hours ago
The sources I’ve seen had millennials at 51-47 and Gen Z 52-46 or 54-43. But I imagine there’s a range among different sources so entirely possible that some reported 50-48 for millennials. But the point still stands - Trump would not have won without Gen X.
che-che-chester | 12 hours ago
We’ll be like King Charles III. Boomers will cling to power until the bitter end and then we’ll get power for like a 5-year stretch.
Spock627Corfu | a day ago
I was a kid when Nixon resigned.
I was sure that with him out of the way, all the old warmongering fucks would disappear.
Alas, that mentality is a function of the human genome.
We'll always have dark triad types.
We have to build social systems that thwart them.
Our Constitution did a pretty good job of that for a long time, until MAGA infected all the GOP.
thewimsey | a day ago
Boomers are only 20% of the population.
ReturnOfBigChungus | 23 hours ago
Yeah, but 50% of the wealth and 45% of the votes cast on average.
crowcawer | 23 hours ago
Their all in congress
Previous_Cattle_5545 | 14 hours ago
Ha! Yea, people change so much between generations.
Chris_Codes | 13 hours ago
That’s not how it works though, generationally, through history. What actually happens is the trend line continues in the same way it continued before because it’s not the people who shape the positions in society it’s the positions in society that shape the people. The current younger generations just become the “greedy boomers who control everything” for the generations that come after them.
The whole “this generation is doing that to this other generation” is just rage-bait for clicks … if all the headlines just said “people with money don’t want to give it up” you’d have much lower engagement because everyone would just say; “of course they don’t!”
crowcawer | 12 hours ago
I’m legitimately discussing the geriatric legislators who should have stepped down for the next generation.
Sure, whomever their constituents vote in will follow what their prerogative is, but it will indeed be the next generation.
Super_Mario_Luigi | 15 hours ago
This speaking point will age poorly
pm_me_your_pay_slips | a day ago
Well, that’s the idea
scoofy | 18 hours ago
It’s like people don’t understand that the population cliff is a problem for generous social safety nets.
freebytes | a day ago
However, if such a cap was implemented, then it could be used if the contribution cap is lifted. That is, remove the cap so that billionaires are paying for more towards Social Security, but they do not receive more than the benefits of the cap. As time passes, adjust this cap based on cost of living requirements.
I understand that your concerns are the following, though:
Edit: Added italics section because people were confused.
ocposter123 | a day ago
Bilionaires dont pay into social security anyways
klingma | a day ago
Yes they do, they're not that good to completely avoid earned income in some form or another.
freebytes | 23 hours ago
The income tax cap is $184,500. Anything higher than that is not subject to Social Security tax; therefore, /u/ocposter123 is correct to say that they do not pay into it.
klingma | 20 hours ago
A. I said "Earned Income" which IS subject to FICA
B. I'm well aware of the income cap, hence why I said they're not good enough to completely avoid it. I brought up multiple examples - Speaking engagements, classes, etc. all things that'd generate self-employment income.
So, no, the guy is NOT right to say they don't pay into it.
inspired2apathy | a day ago
Capital gains
klingma | a day ago
Did ya read what I said?
>>they're not that good to completely avoid earned income in some form or another.
That means - Schedule C income from speaking engagements or other activities, Self-Employment income from K1 activities or even a W-2 wage from the company they own, etc.
So no, they're not getting their money all from capital gains.
inspired2apathy | a day ago
They can donate it to reduce tax liability. Everything important is capital gains and dividends. PE and VC folks do things the same way, structuring the profits as capital gains and avoiding income taxes and social security. It's the high earning salary schmucks in medicine and tech or whatever that get hammered
klingma | 23 hours ago
>They can donate it to reduce tax liability
Sure, they can take deductions to reduce their income tax liability, but that has literally nothing to do with FICA.
>Everything important is capital gains and dividends
Again, no. Their income streams are FAR more variable than you to admit.
>PE and VC folks do things the same way
No they don't, unless they force the company to convert to a C-Corp which usually isn't always the most prudent compliance decision for a startup. Even then, those PE & VC firms pay wages to those high up or guaranteed payments.
>structuring the profits as capital gains and avoiding income taxes and social security.
That's not how that works, but alright. Like I said unless you force the company you invested in to switch to a C-Corp, you're getting flow-through income including their ordinary income generated when they are profitable.
>It's the high earning salary schmucks in medicine and tech or whatever that get hammered
Again no, you need to stop reading whatever biased sources you're getting your info from as its just not true and doesn't make sense from a tax compliance standpoint.
As I already said - these guys do speaking engagements, sell books, do interviews, sell classes, etc. that's ALL earned income that's subject to FICA. None of them are good enough to completely avoid FICA in any given year.
ReturnOfBigChungus | 23 hours ago
Directionally true-ish regarding income tax vs capital gains, but FICA is being paid by basically everyone that’s making real money, it’s just not a meaningful amount because of the caps. It’s meant to be a broad based tax. SS maxes out at like 10k/yr (or 20k if you include employer contribution).
freebytes | 23 hours ago
Yes, the point is that we should remove the income tax cap so that billionaires contribute. After $184,500, they are paying nothing. If we were to remove the income tax cap, then it would be feasible to set a yearly benefits cap, even if that cap was really high.
Longjumping-Ad514 | 22 hours ago
So I California, I get to pay the full cap but receive half the benefits great. I am not a billionaire.
TaxGuy_021 | a day ago
I will never ever agree to vote for removing the cap until and unless the trust funds are allowed to invest like other similar funds across the world.
I will not pay more into this system and will not ask anyone to pay more while the money goes to earn 2%.
freebytes | 23 hours ago
Social Security is not an investment plan. It is an insurance policy for the government to reduce its burden to support individuals if their investments or planning fail.
TaxGuy_021 | 16 hours ago
Nonsense.
Almost every similar program across the US and the world has taken advantage of the massive pool of money to invest it sensibly.
Look at Norway's sovereign wealth fund or CalPERS.
morbie5 | a day ago
Younger Americans are going to get a benefit cut in some way, there is no way around it
liroyjenkins | a day ago
We could just increase contributions by enough to balance the system. Probably about 2%.
Nobody likes that idea because everyone thinks someone else should have their taxes raised.
morbie5 | a day ago
> Nobody likes that idea because everyone thinks someone else should have their taxes raised.
And there is the problem
Draoken | a day ago
That's a nightmare though because you're just putting in more money for the people that need it now and still deal with the possibility that the people pay into it now won't have social security when they get there.
If it was truly about creating something for the workers so they can have something in retirement wouldn't you be better off just having everybody save/invest their own 2% so it never goes insolvent on them?
liroyjenkins | a day ago
There are all sorts of good options. Most probably should have been implemented decades ago.
genobeam | 12 hours ago
Why do we need to prop up this system? All these suggestions of "increase taxes to make it work" but you mention cutting benefits and it's like you kicked a puppy.
What is the point of social security? Who is it supposed to benefit? The largest beneficiaries are the highest earners
liroyjenkins | 11 hours ago
The largest beneficiaries are the lowest earners. They get much more back in comparison to what they pay in.
genobeam | 11 hours ago
Relative to what they pay yes. The problem is that the system is going bankrupt because of the ones that get the least relative benefit, but the highest quantitative benefit: the highest earners
liroyjenkins | 9 hours ago
It’s not really going bankrupt. We could cut benefits 20% and remain solvent. Or raise FICA tax by 2%. Or a variety of other solutions. But politicians are afraid to mess with Social Security and most people want someone else to pay for it.
genobeam | 8 hours ago
"could remain solvent if we did x,y, and z" and "is going bankrupt" can both be true statements
morbie5 | 8 hours ago
> The problem is that the system is going bankrupt because of the ones that get the least relative benefit, but the highest quantitative benefit: the highest earners
Those that get the least benefit almost always pay in less than they get out, I'm 100% percent sure what you are saying tho. There is a minimum benefit if you work for x number of years at full time, I don't know the exact details off hand but it exists. It is a myth that social security is a 100% earned benefit, it isn't. I'm not saying I'm against this, just pointing out a fact
Also, those that pay in the least get the same Medicare benefits as those that pay in a lot more. And that doesn't even get into Medicaid or MSP
genobeam | 8 hours ago
>Those that get the least benefit almost always pay in less than they get out so that is factually wrong.
Do you have a source for this? My understanding is that even high earners get more out than they put in (adjusting for inflation).
morbie5 | 7 hours ago
> My understanding is that even high earners get more out than they put in
They might but lower earners get even more out than they put in
There is the special minimum benefit:
https://www.ssa.gov/policy/docs/program-explainers/special-minimum.html
And bend points:
https://www.ssa.gov/oact/cola/bendpoints.html
Both mean that lower earners get more back than they pay relative to higher earners
genobeam | 7 hours ago
Yes but that's exactly the issue. The taxes collected do not cover the benefits paid. That's why social security is one of the largest contributors to the national debt.
Why we have a program like this for people who don't need it is beyond me
liroyjenkins | 6 hours ago
I probably will get more out than I put in, but I will not get close to the return I would have had if my contributions had simply gone into my 401k. I would have about $2 million at retirement in that scenario
genobeam | 6 hours ago
You're reinforcing my point. If millionaires are not subsidizing this system and it's also worse for them than other options, what is the point of this system for that group?
br_k_nt_eth | a day ago
There are ways around it, but they would require the top 1% contributing back to the societies that propped them up.
morbie5 | a day ago
There is room to tax the rich more and they should be be taxed more. But you can't 'tax the rich' your way out of an aging population problem.
br_k_nt_eth | a day ago
Oh, I’m sure we could get much closer to that problem if we started, no? As opposed to us collectively just deciding the elderly should be sacrificed so they can have a third yacht.
ocposter123 | a day ago
If you uncap the contributions you still have a deficit. To the above posters point there’s no broad solution to the aging population issue except more people or robots.
bobandgeorge | a day ago
Immigration, which falls under the "more people" umbrella.
klingma | a day ago
Nope, those people will retire and collect social security, thus adding to the problem in the future. Immigration only works in this scenario IF the inflow rate exceeds the necessary rate of replacement to create more younger workers to subsidize the retired, which needs to be around 4 workers for every recipient.
By 2035 it's expected that we'll have 70 million recipients meaning we'll need 280 million workers to support them to keep the system solvent. We currently have 162 million people employed right now...there's ZERO way we're adding 118 million workers to this country in 10 years with a low rate + immigration.
To make an even bigger point - by last year we only had a population of 51 million foreign born individuals, an increase of around 5 million a decade ago.
So, that's roughly an increase of half a million per year in the population due to immigration.
There's literally zero way we're going to have enough workers, even with immigration, to fill the necessary funding gaps.
morbie5 | 23 hours ago
This assumes that immigrants (including their minor dependents) are net taxpayers (or close to net taxpayers). The data on this comes for ACS survey data which I don't put much faith in tbf
And this assumes that we don't bring in tons of older immigrants, which we in fact do for some really, really stupid reason
Super_Mario_Luigi | 15 hours ago
SS was never designed to be a wealth redistribution or a lavish retirement pension
RIP_Soulja_Slim | 11 hours ago
This might be a shock to you, but the US already has the most progressive tax system of any developed country in the world.
Yes, other places tax their wealthy more, but they also tax everyone more. In most norther euro countries you're in the 40% brackets before you even earn six figures.
genobeam | 12 hours ago
This policy is addressing that directly though. The highest earners are also the highest beneficiaries of social security. You can't balance the budget by just looking at taxes and ignoring benefits.
windemotions | 11 hours ago
I went to high school with a special needs kid who used to confuse tax rates and tax systems. That shit was hilarious. The kid would say the US has a progressive tax system when he meant the US has progressive tax rates.
EconEchoes5678 | 9 hours ago
The kid was correct. See here on exhibit 10, page 23 here. See also Myth #3 here confirming this. Estimates from the ITEP, JCT, Treasury OTA, and TPC all come out similarly.
turkshead | a day ago
A competent government which was not committed to destroying social security could fix the problem fairly easily. The Republican Party has made their whole platform depend on the United States having a bunch of mysteriously unsolvable but terrifying problems, so they've spent 50 years making sure this doesn't get fixed.
phonyToughCrayBrave | a day ago
well just make sure the boomers get 2 dollars for every dollar paid into it.
Prestigious_Load1699 | 16 hours ago
Bingo.
https://www.federalbudgetinpictures.com/retirees-get-more-than-they-paid/
Super_Mario_Luigi | 15 hours ago
Like every entitlement program. Fiscal responsibility is unpopular
devliegende | a day ago
A benefit cut will have to happen because people have fewer children. There is no way around it but it doesn't really matter because a generation that chooses to not have children will not retire either. It really has nothing to do with how old you are today and everything with how many working age people there will be when you are old.
morbie5 | a day ago
> because a generation that chooses to not have children will not retire either
So you are saying we are all going to just drop dead at work?
devliegende | a day ago
More like work until they can't anymore. Yes it sounds a bit grim but I'm not aware of any alternative. Not having children is a choice people are free to make but I'm not sure if they realize they're also choosing to forego retirement. As well as any chance of being cared for when they're old, frail and physically incapable of doing it for themselves.
pants_mcgee | a day ago
That’s inevitable for most and already the case for many.
Mr_Industrial | a day ago
Mathematically, social security is structured in such a way that it needs ever increasing workers to pay into it.
Pyramid schemes are not sustainable.
ocposter123 | a day ago
This. Current retirees get 2x the benefits they paid in on average. Clearly you need ever increasing population to make that sustainable.
GhostReddit | 18 hours ago
Social security was basically structured so that if you lived past your expectancy (where you probably couldn't reasonably work anymore) you wouldn't be destitute.
The ages need to be raised, it's not a retirement plan to fund people for 20 years.
Super_Mario_Luigi | 15 hours ago
That's just codeword for saying it wasn't designed to be solvent. Hoping we'd grow enough to kick the can indefinitely
Cold_Specialist_3656 | a day ago
If we just removed the tax cap that gives a lower SS tax rate to those making over 150k, everyone over 25 would get the whole benefit.
It would reduce the funding gap by 90% if we just slightly (a few percent) raised SS tax on the top 5% of earners.
morbie5 | a day ago
> to those making over 150k
The dems in congress would never vote for that. Even most of the progressive caucus doesn't support that
liroyjenkins | a day ago
Partly because almost all of them earn more than the cap.
morbie5 | a day ago
Either way the votes ain't there
KobeBean | a day ago
You do realize that 150k is approaching the living wage for 1 adult 1 dependent (137k) in places like SF right? 150k ain’t what it used to be.
Gamer_Grease | a day ago
That isn’t true. We can simply collect enough tax revenue to pay out the benefits.
morbie5 | a day ago
> simply
lol
OriginalHappyFunBall | a day ago
Only if they are supine and do nothing to fight it. Millennials outnumber boomers and could take the power now if they had the will.
hoowins | a day ago
Exactly this.
Otis_Manchego | a day ago
Yeah, with inflation by they time Gen Z retires they will be receiving a month’s worth of benefits in a year.
If they were serious they would just remove the cap on contributions limits.
STANDARD92 | a day ago
You may be and probably are right, but like all governments, they know what they doing but the majority won’t see it that’s all they need is the majority
Relevant-Doctor187 | a day ago
Inflation would have people hitting that cap some day. That’s probably what this is about. A way to screw high earners at some point.
jasandliz | 23 hours ago
Imagine 20 years ago capping it at $50k, it makes sense only if you want to destroy it.
rtc9 | 23 hours ago
The proposal actually is to cap it at $50k for individuals now. It is only 100k for couples.
anonareyouokay | 15 hours ago
It actually affects literally no one. Right now Max benefit at age 70 is $63K.
MHanky | 13 hours ago
You need to increase the threshold where you stop paying into SS. Right now it is at $184,500, meaning every dollar you earn after does not go towards funding SS.
Noactuallyyourwrong | 11 hours ago
This is not a bug. This is very intentional and how it was designed
fec2245 | a day ago
Half the paper is on whether and how to index the cap.
>Just look at congress making a portion of social security taxable under Reagan. At the time the threshold was set high enough to only affect a small number of recipients. Fast forward 40 years and now it's fairly common for average earners to recieve enough benefits that they surpass these once wealthy only thresholds.
Good.
RIP_Soulja_Slim | a day ago
>The Trust Fund Solutions Initiative whitepaper from CRFB outlines the Six Figure Limit (SFL) proposal, which would set a $100,000 cap on the total benefit a couple retiring at the Normal Retirement Age (NRA) can receive starting this year. The SFL would be adjusted based on marital status and claiming age, with a $50,000 limit for a single retiree. A couple in which both spouses began collecting benefits at age 70 would face a $124,000 limit, reflecting the 24% delayed retirement credit. A couple with both spouses collecting at age 62 would face a $70,000 limit, reflecting the 30% early retirement actuarial reduction. Different claiming ages would result in a blended limit.
This isn't a 100k cap on social security, it's a 50k cap on social security lol. Currently if you are sitting at the max benefit amount you get a bit under $5,200/mo, which is a little over 62k/yr. This would be an immediate 12k haircut to those people, but also a haircut for most anyone past the second bendpoint.
Furthermore, very few couples have two people that have max benefits, often it's one breadwinner with a large benefit and a spouse with a comparably smaller one. So that hypothetical couple would be taking a larger haircut as the breadwinning spouse sees a reduction while the other already has a smaller benefit.
There's lots of ways to fix the funding issues, but this seems like a pretty harsh hit for a lot of recipients that's pretending like it's only targeting super high earning couples.
Ok_Grapefruit2619 | a day ago
It’s actually more than that. If you claim early at 62, it’s a $70,000 limit for a couple. So a $35k limit for a single person. That’s wild
Edit: my logic is flawed - see comments below
Valianne11111 | a day ago
People who collect early are always getting less than they get at full retirement age. Most work part time. And the benefit keeps getting recalculated to full retirement age.
Particular_Car_2499 | a day ago
The maximum possible benefit for someone claiming at age 62 in 2026 is $2,969/month or $35,628. I'd rather take a $628 haircut than a $12,000 haircut.
Ok_Grapefruit2619 | a day ago
Ooh my bad. I miscalculated then
TheGoodCod | a day ago
I guess there aren't enough impoverished Americans. Mom and Pops are already eating half portions and skipping meds.
Do you suppose 'they' will cut their benefits if they take a part-time job selling flowers on the street.
thri54 | a day ago
The current max benefit at age 65 is ~$50,000. A person has to work their whole life earning at least $176,000 per year (inflation adjusted) to get that benefit. This is not taking from the poor.
Valianne11111 | a day ago
That’s what I’m saying. People need to read the actual white paper because it makes sense
Least-Ad3852 | a day ago
There is no intention in the white paper to increase the cap based on inflation. It intentionally leaves it locked at $50k/person/year; that's how it "solves" the problem.
genobeam | 12 hours ago
The people with maxed benefits are far from impoverished
genobeam | 12 hours ago
Anything that tries to fix the problem is going to seem harsh, but the alternative is that we just keep growing the national debt until we default
DelphiTsar | 8 hours ago
77% of the federal budget goes to old people, ~~defense~~ war, interest. You have to do something. If it's not coming from the top it's coming from bottom/everyone else through inflation. It's going to hit doubly hard in 2033 when the fund starts getting huge influx of debt to fill the gap.
You have to come at it through all angles.
You are also just wrong, the cap is the merged benefit. They don't cap one earner.
RIP_Soulja_Slim | 7 hours ago
That's a lot of confidence for someone who didn't read the policy proposals lol
DelphiTsar | 6 hours ago
https://www.crfb.org/sixfigurelimit#:~:text=This%20Trust%20Fund%20Solutions%20Initiative,can%20receive%20starting%20this%20year.
RIP_Soulja_Slim | 6 hours ago
Yes, this clearly says it's a 50k cap on individuals lol. Did you read it?
DelphiTsar | 6 hours ago
>often it's one breadwinner with a large benefit and a spouse with a comparably smaller one. So that hypothetical couple would be taking a larger haircut as the breadwinning spouse sees a reduction while the other already has a smaller benefit.
This part you said is wrong.
RIP_Soulja_Slim | 6 hours ago
presuming an aggregate under the cap, I think you're just intentionally misreading things to argue lol.
DelphiTsar | 5 hours ago
If two people together are under 100k then neither have a reduction. If someone has 60k and someone has 10k, they aren't reduced to 50k&10k(60k). They both are under 100k so no cut in benefits they get 70k. If one was 40k and one was 80k then they'd get cut to 100k. If one was 60k and one was 60k they'd get cut to 100k.
There is no way to misread what you said. You just misunderstand the proposal.
RIP_Soulja_Slim | 5 hours ago
Lmao no, but okay bud whatever you say, I'm not gonna sit here and litigate this with a dude trying to make a fight out of their own misunderstanding.
DelphiTsar | 5 hours ago
For married couples they don't look at it, at an individual level. I am 100% sure. That's how it works for anything like this, they effectively treat married couples like a single person with a combined cap of 100k.
You are wrong.
nyckidd | a day ago
Why wouldn't we just raise the cap on contributions for high earners? Oh wait, I know why, because their donors have captured Congress and would rather screw over millions of Americans than have higher income folks pay more.
bateleark | a day ago
It's also because the way it's designed is that when you raise the cap you have to pay out more to those contributors. So that part would also have to change
Vincent_LeRoux | a day ago
Yes and no. The tax is a flat percentage of labor income, but the payments are a weighted formula. Higher income folks get less of a return on the tax than lower income earners. However, addressimg both would provide better long term funding stability.
genobeam | 12 hours ago
What's the difference though? Why is raising contributions a good solution but cutting benefits is a bad solution
nyckidd | 10 hours ago
Raising contributions for high earners is much more fair than cutting benefits for huge numbers of beneficiaries. One of them impacts people who can take the hit, and the other hits people when they can least afford it.
genobeam | 10 hours ago
Why can't you cut benefits of high earners? Why are the top 10% collecting social security at all?
nyckidd | 10 hours ago
Porque no los dos?
genobeam | 10 hours ago
For sure, both are on the table, but one seems to immediately get shot down for no good reason imo
Ok_Jackfruit_5181 | a day ago
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
nyckidd | a day ago
Ideally you would just get rid of the cap entirely and make it actually progressive so that people with the highest incomes pay proportionately more. Doesn't seem that complicated to me.
genobeam | 10 hours ago
It's complicated because people think it's something it's not. People think you pay into it and your money sits in an investment account until you retire and then your benefits come out of that. It's more similar to a ponzi scheme than that.
Also high earners are still taking out more than they put in, so they're not paying for the low earners. Younger workers are paying for current beneficiaries. Eventually it's the future generations who will get fucked
June1994 | a day ago
> No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment).
So what? They can afford it.
> You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax.
This is total nonsense actually. There are over 3 million individuals who make more than 250,000 USD per year. Not households, individuals. As for the rich, either way, they get in other ways when it comes to tax and we shouldnt be shy about taxing them. US taxes are exceptionally low among developed countries. Not a bad thing, but there is plenty of revenue to raise.
> Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
The horror of a top 5% household having to make some cuts.
morbie5 | a day ago
> There are over 3 million individuals who make more than 250,000 USD per year
Where are you getting that data, that seems low?
thewimsey | 23 hours ago
Well, technically they wrote "over" 3 million.
It looks like it's 3.6% of the population, so 6 million or so individuals.
morbie5 | 8 hours ago
Well they would also technically be correct if they said over 3 thousand lol
Least-Ad3852 | a day ago
20% of people exceed the cap over their career. It's always nice to see people willing to give themselves more by saying those who make a bit more than them should pay more. Why not just make it real welfare. You and I have to keep paying in, but you don't get a penny back if you make anything more than $10k less than June1994 does? That too would save the program.
pants_mcgee | a day ago
How about the middle where we acknowledge this is the American pension system but not a true retirement fund.
There is a minimum to keep retired workers from dying in the gutter, and people who made more can pay more.
liroyjenkins | a day ago
I love seeing someone else who understands income statistics.
10% of people will have a 1% income at some point in their lives.
https://www.cbsnews.com/news/here-are-your-odds-of-joining-the-1-percent/
>Here's what the researchers found for Americans by age 60. 70 percent will spend at least a year in the top 20 percent of earners 53 percent will spend at least a year in the top 10 percent 36 percent will spend at least a year in the top 5 percent 11 percent will spend at least a year in the top 1 percent
r8ed-arghh | 23 hours ago
The U.S. already has the most progressive tax system among developed countries. So do you think it should be even more progressive, or are you arguing we should tax longer income more?
June1994 | 22 hours ago
It can continue being just as progressive with higher taxes. The budget needs to be more balanced. That’s all there is to it, and you start by taking more from those who can most afford it.
r8ed-arghh | 22 hours ago
Or cut unneeded spending. We don't need to be the world's military. We don't need to provide "aid" to so many countries. Also, there is an option on the Federal income tax forms to check a box to "donate" more toward paying down the national debt. Have you ever checked this box? If not, then who are you to say what others should give to what you determine to be a "need" that you yourself have not volunteered to support?
June1994 | 20 hours ago
It’s not either one or the other lol.
r8ed-arghh | 20 hours ago
So, you haven't checked the box. Got it.
June1994 | 20 hours ago
Neither have you. Hence why you should be taxed.
r8ed-arghh | 20 hours ago
Of course I am taxes just like everyone else. But I am not running around demanding that everyone who makes more than me pay a higher tax rate. You are.
morbie5 | a day ago
> their donors have captured Congress
More like the people that make 200k-250k, live in higher cost blue states, and vote for dems would hate it
Least-Ad3852 | a day ago
Don't go putting that fact out there, 95% of people think this will "hurt billionaires" (even though billionaires don't earn money through working). 🤫
Constructestimator83 | a day ago
This is literally me and I have been saying for years they need to remove the income cap.
morbie5 | a day ago
You are in a minority of a minority then
liroyjenkins | a day ago
The top 5-10% of earners hold significant influence over congress. It is not just the billionaires.
nadirw91 | a day ago
Yeah, I don't think anyone LIKES paying taxes but they serve a greater good mostly. I wouldn't hate it as you put it but I would probably want to see some other changes as well. I circle back to the original idea of SSI. It was meant to give our senior citizens a sense of dignity and welfare those last few years of their life. In 1950 the average life expectancy was ~68, and the collection was around 62-65.
Our average life expectancy now is ~80. That's 12 years! It's another case of the world changing but not policies. I think we should remove the cap or increase it significantly while changing the retirement age to match our current statistics of life expectancy.
SconiGrower | a day ago
This is just annoying to me because the social security benefit formula is already extremely progressive, it's a very high income replacement rate at low income levels and the opposite at higher levels (the famous 'bend points'). So this is just saying that even if you manage to earn so much income across your lifetime that, even despite the bend points being as they are, you managed to hit 6 figures, then it must not have been progressive enough.
Least-Ad3852 | a day ago
Sir/ma'am, this is Reddit! Don't go introducing facts to the comment section that question the delusion that this would be punishing "the rich like Bezos and Musk." This is how you get downvoted.
ICLazeru | a day ago
I'm going to throw a curveball, kinda. What if we tax automated labor? The value of human workers' labor pays FICA taxes. But do the same thing with robots and AI and no FICA is paid.
Or maybe this. I never liked payroll taxes anyway, it discourages hiring workers.
Let's take FICA straight out of business profits instead.
Then all US businesses, regardless of how they operate, will be providing for social security and Medicare for all Americans, in measure to their own profits.
Then even if they automate away every job, FICA is still funded anyway. We could then standardize benefits too, instead of bothering to measure everyone's benefits to their contributions.
This also helps startups or struggling businesses a bit, since they won't have to pay payroll taxes even if they aren't profitable.
coalescence2071 | a day ago
Same trick was used in 1978 when the $3,000 capital loss deduction limit was established by Congress. Back then it was a meaningful tax break for those who invested. It has not changed for 48 years and it will not change the next 48.
rotll | a day ago
You know, god forbid we raise or eliminate the SS tax cap and raise more revenue. Nah, fuck those seniors (and children, disabled people) living off the gov't...
freebytes | a day ago
The number of people in the United States simping for billionaires puts OnlyFans to shame.
MEDICARE_FOR_ALL | a day ago
The cap just needs to be raised. Speaking as someone who would be affected by it, it makes no sense that only part of income is taxed like this.
People who make the majority of their money through Capital gains should also be taxed.
freebytes | a day ago
When referencing the 'cap', you must differentiate between the cap on high income earners or a cap on benefits received. The same word is used for both scenarios.
MEDICARE_FOR_ALL | a day ago
I'm referring to the cap on high income earners. All income should be subject to social security taxes.
klingma | a day ago
Not all income - just earned income. No reason to take 7% from a retired person with a pension or retirement.
MEDICARE_FOR_ALL | a day ago
I'd be ok with excluding "retirement income", i.e. income from 401k or IRA or pensions.
Only "earned income" would exclude capital gains, which I think should be included.
pants_mcgee | a day ago
Plenty of us plebes will be relying on capital gains for our retirements.
Put an amnesty until some number like $1M and we’ve got a stew goin’.
MEDICARE_FOR_ALL | a day ago
Sure, I'm fine with a decently high exclusion.
Kindly-Eagle6207 | 22 hours ago
>Plenty of us plebes will be relying on capital gains for our retirements.
"Plenty of us plebes" fuck off. The average person saving for retirement is saving entirely in 401ks, IRAs, and HSAs which are all tax advantaged yet still taxed at income tax rates either on the front end or back end. Capital gains taxes won't apply to them at all and for the less than 10% of us that max out all three and have to put additional savings in taxable brokerages, we'll fucking live.
The only time the average person even has to think about capital gains is when selling a house, and that already has a huge exclusion for primary residences.
>Put an amnesty until some number like $1M and we’ve got a stew goin’.
Nah, fuck that. Capital gains are already taxed at a lower rate than earned income at every level and that needs to stop. Make capital gains brackets at least as progressive as income taxes, and then maybe, maybe you can carve out a bigger primary residence exclusion for VHCOL homes.
Until then I don't want to hear a fucking peep about cutting taxes on income that isn't earned through labor.
Sweaty_Assignment_90 | a day ago
This.
Ok_Jackfruit_5181 | a day ago
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
Least-Ad3852 | a day ago
Almost no one commenting cares. In their minds, anyone who makes $10k more than they do should pay a 100% tax on that income. Most of them would gladly vote for those in HCOL areas with middle-class jobs to pay 90% income tax just to "eat the rich."
flying_alpaca | a day ago
This tax is the opposite. It benefits high cost of living areas at very high income levels because of the cap.
The payments are progressive, but the tax itself is regressive. As individuals make more, the cap causes the system to change in the high-earner's favor.
Also your arguement is made up and basically the definition of a strawman.
LittleTension8765 | a day ago
You can start donating directly to the government. Nothing is stopping you for starting to tax yourself that extra amount today. Don’t be selfish, please let me know if you need the direct link. Happy to provide unless you are just virtue signaling
MEDICARE_FOR_ALL | a day ago
Are you a taxation is theft person?
I want social security to work and that only happens if everyone contributes.
LittleTension8765 | a day ago
One person doing their extra part is better than zero, it can start with you! Please let me know if you want a link. Thank you for your service
FoxontheRun2023 | a day ago
It is ONLY 6-figures IF it a COUPLE. Single retirees would be limited to $50,000 max. Do lawmakers not realize that (2) ppl have the advantage of paying (1) property tax bill, (1) of each of the utilities- light, gas, water, internet. It takes more to run a household with only 1 income.
bluehat9 | a day ago
Get rid of the income cap on social security tax. It’s so simple.
I don’t know why this option is never seriously considered. Why does a cap seem to be so important?
Here’s some more words for the filter.
Least-Ad3852 | a day ago
It's never considered because it would be a structural change to the foundation of how the program works (and why it has survived for 90 years) - what people get back is determined by what they paid in. So, you not only need to eliminate the cap on contributions (which has existed since Day One), but also introduce a benefits cap to prevent massive payouts (something that has never existed).
Yes, we could do that. You could argue it's the fair thing to do.
The fact is that Social Security has a dedicated tax, a dedicated budget, a dedicated trust fund, and has lasted nearly a century because everyone who paid in gets back an individual payment based on what they paid in. You make that change, and suddenly overwhelming support isn't as likely. You can say, "who cares, it's only the Top 20% of people at various points in their life."
You're arguing to change Social Security from an earned benefit to welfare. Welfare doesn't tend to fair well in this country.
bluehat9 | a day ago
I’d argue it’s already welfare. People who pay in less and receive a lower benefit but it’s a higher percentage. They get more of their money back, in other words. So it would really just be tweaking that a bit. But even if you kept the benefit formulas exactly as they are, it would help the sustainability of the program.
I think people who’ve earned much more in their careers can afford to get a little less back in their retirement, but I realize how much high earners hate taxes and not keeping more of what they earn.
I think they’d hate more seniors being destitute which costs more money and hurts society, but some people would be happy to ignore that for more money in their pocket, I realize.
phonyToughCrayBrave | a day ago
my taxes are too high already. stop wasting money on wars and start charging billionaires. there is no SS tax on passive income.
bluehat9 | a day ago
You’ll likely always feel that your taxes are too high regardless.
Why should some of your income not be subjected to social security tax but 100% of a low earner’s income be taxed?
ocposter123 | a day ago
Because benefits are capped
bluehat9 | a day ago
Doesn’t that apply to all taxes? I don’t get “more road” because I pay more taxes, or extra government services. Those benefits are capped too. We have a progressive tax system but for social security we say no, that’s progressive enough
ocposter123 | a day ago
Social security is already insanely progressive. Read about bend points.
bluehat9 | a day ago
It’s anti-progressive because high earners pay a lower effective rate. The amount of benefit you receive from a tax funded program doesn’t determine how progressive the tax is
r8ed-arghh | 22 hours ago
It does when the program was purposely structured by design to have a certain level of taxes benefit a certain level of benefits. They are related, and it is highly progressive, as is the entire U.S. tax system (most progressive in the world).
bluehat9 | 22 hours ago
So why can it not be made even more progressive?
r8ed-arghh | 22 hours ago
Besides the obvious economic drag, at some point, it literally becomes "unfair" for those that pay almost all of the taxes versus those who pay very little of the taxes. Contrary to general "Reddit" beliefs, many people make it into higher-earning levels through great sacrifice and significant risk-taking that others are unwilling to make. Everyone who makes more money didn't just get there just through luck and evil, greedy stealing.
klingma | a day ago
>but 100% of a low earner’s income be taxed?
It's technically not though - only earned income is taxed. If they have retirement, investment, etc. then it's not taxed.
bluehat9 | a day ago
True, their earnings
r8ed-arghh | 22 hours ago
Because it's a program where those taxes are to support a certain level of benefits back, and benefits are capped. How is that hard to understand?
bluehat9 | 22 hours ago
I pay taxes for public schools even though my kids don’t go, I pay taxes for Medicaid and Medicare but don’t benefit. I pay for roads and don’t drive. Isn’t that how all taxes are?
r8ed-arghh | 22 hours ago
No. You seem intelligent and surely understand that is not how the system was designed, nor would it have ever passed had it been designed that way. It would not pass even today if it were designed in such a way, even if the American people got to decide via a referendum. Whereas, most of the other taxes you voted would.
bluehat9 | 18 hours ago
Yeah people don’t remember what it was like before social security when there were homeless senior citizens dying in the streets from starvation
Ok_Jackfruit_5181 | a day ago
No, because it would hit upper middle class folks very hard and be one of the largest tax increases in history (I'm assuming you mean people who would pay above the current cap would get no additional SS payment). You would not touch the very rich as most their income is in the form of stock options and dividends, circumventing the tax. Maybe you could do a donut hole kind of surcharge on income of all kinds above say $300k. But if you hit people making around $190k with an additional 12% (yes, 12% because the employer share ultimately comes at the cost of lower wages) marginal tax, that's a massive increase and would hurt the economy.
bluehat9 | a day ago
You realize someone making 190k would pay an extra $660 a year? They are already paying those taxes on all their income below the cap.
The destruction of social security will hurt the economy much more
Least-Ad3852 | a day ago
A 1% tax increase would fix it more completely.
pants_mcgee | a day ago
Do both, and lower the maximum benefit, or just have one payout level across the board.
windemotions | 11 hours ago
Yes. I know a white nationalist who lives in the woods and uses the government to steal from his neighbors.
He's able to steal a very high income. So he opposes anything that makes society better for his victims. It's really pathetic.
I actually feel bad for him. He's never been to society before.
liroyjenkins | a day ago
Getting rid of the cap is a 12% marginal tax increase. Personally I would cut back on hours if my marginal tax rate is increased to 62%.
bluehat9 | a day ago
Just to clarify, are you including state income tax in that rate?
If you cut back your hours, there’d be more work/income for other people I suppose, so that might be a-ok
Why, philosophically, should all earned income not contribute to social security?
liroyjenkins | a day ago
You are assuming that there are more qualified people to do my job. Big shortage right now. We have been trying to hire a new partner or two for 5 years without much luck.
bluehat9 | a day ago
Then I guess your company will make less money, and you will make less than you could too. If that’s how it works out I’d be ok with that, personally.
liroyjenkins | a day ago
Actually the opposite. Shortage means we cannot be replaced and can simply charge more.
Our downsize solution is dropping clients. Which we have been avoiding because it would seriously screw over the community.
bluehat9 | a day ago
Do you charge whatever you want as a doctor? I thought there are reimbursement rates you’re stuck with?
Downsizing is a choice you can make. Lots of people say they will work less or move with threat of higher taxation but still choose to make more money even if they pay a higher marginal rate, when push comes to shove.
Your community is going to be screwed when you retire anyway
liroyjenkins | a day ago
Hospitals subsidize us. We work for 2. We could easily drop 1 but they would not be able to replace everything we do and would be forced to cut services.
There are 6 of us in group. 4 of us will probably retire at same time in about 5 years. Unless market changes then community will lose services at that time
Gamer_Grease | a day ago
Fine, more extremely high-paying jobs for young people so that we can support the program, and more leisure time for you. Win-win-win.
liroyjenkins | a day ago
You can join me. I am hiring. Not having much luck. It will take you about 10-15 years to get qualified.
freebytes | a day ago
If you cut back on your hours, then people would take the hours. Nothing would be lost.
Also, the highest marginal rate is 37% unless you are including very high state income taxes.
We should increase the taxable income cap for contributions to Social Security. There is no legitimate argument against it except for those that want to take more than their fair share.
liroyjenkins | a day ago
37 federal. 10 state. 3 Medicare. 12 social security. Adds up to 62.
Maybe we just raise everyone’s FICA tax by 2% and let everyone pay their “fair share”?
Least-Ad3852 | a day ago
You're misusing that word! "Fair share" is only meant to apply to people who make more than they do. They already pay their fair share (even if, in 47% of cases, that is $0 federal income tax).
pants_mcgee | a day ago
Sounds like perfectly fair tax rate at the max tax bracket income. Max federal tax should have more brackets that keep scaling higher as well.
woah_man | a day ago
If you're already making over $630k/year you probably aren't being paid hourly, but I suppose if you were a doctor or lawyer there would likely be other junior doctors or lawyers that would be happy to take that work.
KobeBean | a day ago
Well no, because doctors associations like the AMA intentionally gatekeep and control physician supply to keep wages high. No reason a doc in the US should make 2-3x a EU doc despite worse treatment outcomes.
liroyjenkins | a day ago
MD. Self employed so paid on production. We have been trying to hire a new partner or two for five years without any luck. Turns out most of the new people coming out of training are not interested in providing all the services we provide or living in our location.
Gamer_Grease | a day ago
Nonsense non-solution designed to undercut Social Security in the long run. Social Security has a revenue problem, not a payout problem. The population of recipients has grown quickly while the population of supporters has declined. The solution is to add more money, not try to carve off recipients. We need to eliminate the income cap on social security taxes first and foremost.
klingma | a day ago
>Social Security has a revenue problem, not a payout problem. The population of recipients has grown quickly while the population of supporters has declined.
Isn't the definition of a pay out problem then? If the natural level of payers has organically declined since inception, while the natural level of recipients has organically increased since inception then it's inherently a payout issue.
They can add more revenue, but that's not going to be the end all solution to this problem as our birth rate declined.
ocposter123 | a day ago
No we need to cut benefits. You can’t tax your way out of a demographic spiral unless you want to destroy society.
Gamer_Grease | a day ago
We’re not making less money, we’ve just moved earnings around. So demographics are irrelevant. We just need to continue to support social security even if labor’s share of earnings is declining. Otherwise we’re simply looting SS to give more welfare to rich people.
thri54 | a day ago
>The population of recipients has grown quickly while the population of supporters has declined
That sounds like the opposite of a revenue problem. SS was designed on the benefits principle as a state-forced retirement savings. Now, retirees are promised more benefits than their contributions afforded. The SS trust will deplete in about 6 years. The equitable solution is to give beneficiaries (especially high earners who likely don’t need high SS) less benefit, not tax current workers more.
freebytes | 22 hours ago
People making over ~$200,000 pay nothing extra. If you make $100,000,000 per year, ~$99,800,000 of that income is not taxed for Social Security. We should not tax low income employees more. We should tax the rich. Propaganda encourages people to defend the rich against paying this tax and prefer the burden be shifted to those making less than $200,000.
Gamer_Grease | a day ago
It was started when labor had a much larger share of earnings. While yes the population of working people has declined relative to retirees, we’re making even more money. We’ve just transferred the earnings that used to go to labor, and then to SS, to wealthy people.
It’s completely reasonable to ask that they continue to fund SS in return.
klingma | a day ago
No one is arguing about raising the cap on earned income taxed for SS, the argument/criticism is the claim that it's not a payment problem but a revenue problem. It's a payment problem, which you can fix in the short-term with additional revenue, but it's a permanent payment problem as the population demographics in America continue to skew older with less children/young adults to replace retirees.
Simple-Television424 | a day ago
This is BS. The credited amount at upper income levels is already poor (12% I think). If you want to raise the tax cap I support that even though that is still a terrible return for those who exceed the cap.
freebytes | 22 hours ago
It is not intended to be an investment plan, so it does not matter about the 'return' for people that exceed the income caps. It is a tax that acts as an insurance solution for the government to support individuals that fail to plan or have bad investment outcomes.
Simple-Television424 | 11 hours ago
I know it isn’t an investment plan. I support the insurance plan. I support raising the tax cap but not capping the payments.
MoonBatsRule | a day ago
I don't have a general objection to limiting the amount that someone can receive - there is already a limit now, though it is partially driven by the contribution cap. I also don't mind having the contribution cap lifted, even though it would impact me pretty significantly. I appreciate the value of Social Security, and that is one way to keep it solvent.
The problem with putting changing benefits is that people made life decisions based on there being no cap. Morally, any change should be made to give people 10 or 20 years to react to it. It really sucks when you have things planned out and then they would say "oooh, too bad, pulled the rug out from under you".
YellingatClouds86 | a day ago
I am fully opposed to means testing Social Security. Eventually that will kill support for it as it will turn into a welfare program. And this level will eventually fall because that is how this works. Imagine having a significant chunk of your wages garnished for this program for life and never getting it.
klingma | 20 hours ago
>Eventually that will kill support for it as it will turn into a welfare program.
It already is a welfare program...
Social Security pays out Survivor Benefits, Disability, and retirees. Many retirees rely on social security.
So, it's very much a welfare program at this point.
NYDCResident | 9 hours ago
The key problem with this idea isn't that it limits future benefits but that it changes SS from an actuarial insurance program into a conventional budget expenditure and that's an extremely dangerous precedent. Currently, we pay into SS and at the end we get a benefit that is calculated according to actuarial techniques to correspond to what we put in along the way. If you break that link between paid-in contributions and benefits, you're left with a government spending program like any other. That means it would forever be vulnerable to the budget squabbles and political games that the rest of the budget is exposed to.
No-Understanding9064 | a day ago
So much consternation over a ridiculous problem. In what universe is it a good idea to only hold long duration low yield bonds your entire life to save for retirement.
tantalor | a day ago
> Social Security should provide a base of retirement income, not a windfall
"windfall" my ass. The highest earners are already getting screwed by SS, contributing much more than the benefit. Lower earners may have a lower benefit, but it's much closer to their contributions.
Least-Ad3852 | a day ago
🤫 facts🤫
Much-Instruction-807 | 21 hours ago
Social security is supposed to reduce poverty. Remove the contribution cap. Keep the max payout the same. It's not complicated. It keeps the program solvent.
Super_Mario_Luigi | 15 hours ago
Those who recite the "raise the cap" speaking points, have no idea what they are talking about. If that actually happened, the rich would be entitled to more of a payout. What they really mean is forcing the rich to pay more and not get nothing back. This wasn't how the program was designed.
The true fix is easy but unpopular. If you look at what the life expectancy was when this was created, we are way over that. It wasn't designed to pay for your restaurants and vacations for 25 years. We need to raise the retirement age by 1-2 years. This also has a secondary benefit to the labor market as we're not having babies anymore and the mass migration jig is up.
half_regard | 14 hours ago
This is a Very Bad Post.
themiracy | a day ago
Wasn't a thread on this topic just shut down relatively recently in this sub? It wasn't super clear to me why that prior thread got locked, but I would reiterate that we're always talking about people's opinions (particularly vis-a-vis Americans) on economic issues that don't affect them. I did the math the last time this came up, and the mechanics of the SSA retirement benefit make it very difficult for anyone to actually receive $100,000/year in SSA cash benefits (not including valuation of Medicare etc). This version of this proposal (or at least how it's portrayed here) also eliminates any kind of moral hazard scenario where people choose an earlier SSA benefit onset because the cap eliminates the benefit of delaying retirement. A proposal like this has only a small adverse effect on a very small pool of people who are able to collect this large of an SSA benefit.
This kind of solution merits more serious consideration because it causes a relatively minimized amount of pain to a relatively contained group of individuals who are unlikely to suffer meaningfully while protecting the system for everybody.
AdPuzzleheaded1495 | a day ago
It seems like they are capping it now so when inflation kicks in the people 40-50 years plus from retirement are fucked.
Edit: Also it may solve the cutting social security benefits without blowing up their chances of getting re-elected.
ExaminationDecent660 | a day ago
>the mechanics of the SSA retirement benefit make it very difficult for anyone to actually receive $100,000/year in SSA cash benefits (not including valuation of Medicare etc
It's $100k cap per couple*. $50k/ person. It's a lot easier to get there
Ketaskooter | a day ago
In 2019 the average SS benefit was $17,500, last year it was nearly $24,000. That was a 37% increase over 6 years, its entirely possible that trend could continue meaning the $50,000 cap may equal the average by year 30. Also cutting the benefit calculation in half is a great way to turn the middle class against the program.
ClubZealousideal9784 | a day ago
If we use the social security benefit calculator, you are ALWAYS better off collecting social security as soon as possible rather than waiting, and you want to make it even worse? Social Security is 12.4 percent of paycheck pretax for all working years. If that money were in the stock market, people would get millions of dollars when they retired.
OddlyFactual1512 | a day ago
The breakeven age from early to full is usually around 77-80, but that doesn't include gains if one invests the benefits from the years before reaching full retirement age, but most would invest this in safer, lower yield investments. In general, if you're in good health, believe you will live past age 82, and don't need the money right away, it's best to wait and re-evaluate each year.
r8ed-arghh | 22 hours ago
Not really. The breakeven is 80 before accounting for the time value of money, which if accounted for, would easily push it out more than two years. Plus, for most people, that extra money is more valuable at a time that they are physically able to do things than when they are stuck in a wheelchair. Finally, if you use other investments to fund those years instead of social security, you are forgoing the gains those investments were generating, which were probably higher than short-term bonds, as a portion of those long-term investments would otherwise not be needed for maybe years, allowing for a higher risk tolerance.
1-Dollar-Doge-Coins | 21 hours ago
> that extra money is more valuable at a time that they are physically able to do things than when they are stuck in a wheelchair.
You don't think you'll need more money when your health starts going downhill?
r8ed-arghh | 21 hours ago
Bad as it sounds, when most old people run out of money during the time that they need assisted living, they just go on Medicaid. For all of the old people I have seen that have gone on Medicaid, they have actually ended up in decent assisted living/nursing homes. There is even a whole legal industry around figuring out how to use up all of your assets or how to pass them along to your children so that Medicaid can start to cover nursing home bills instead of your own personal wealth.
bf-es | 13 hours ago
Let’s just eliminate the cap on social security taxes to solve the problem. Much better than denying people the benefits they’ve paid into and earned.
Ok_Jackfruit_5181 | a day ago
Social security is unsustainable and costs a fortune for those up to the upper middle class. Need to cut something, and, no, raising the cap is a terrible idea.
halfbakedalaska | a day ago
Let’s cut it when you retire.
AstroRanger36 | a day ago
Well, congress could just pay back what it borrowed and poof it’s still fine. You think it’s broken because you listen to talking heads and don’t read the actual reports put out by the trust.
Valianne11111 | a day ago
The white paper is well written. And it looks like a good idea although I think there is no harm in taking the taxable limit to 200k too. And future generations aren’t going to rely on it as much as past generations because they have grown up learning to invest.
durrtyurr | a day ago
That every single person does not receive the same amount from social security blew my mind when I learned about it. Nobody in their right mind would ever in a million years implement a program that inconvenient to administer.