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PaperclipPerfector  7mo ago (text post)   29347 thread views

Culture War Roundup for the week of October 2, 2023

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I'm referencing the second of the two options they describe.

Which is taking my 2.7% return and likely driving to near zero or even negative because now I'm paying taxes on more income but only getting a benefit based on a fraction of my contributions. I'd much prefer ending universal social security and setting up a much smaller means tested welfare program for seniors.

Yes wealthy people would be paying a larger share under this sytem and the benefits would be distributed downwards, like most other taxes.

Someone making $160k/yr in NYC or SF, while very fortunate, is likely quite far from being wealthy. The New Yorker would need a roomate to afford median rent, and neither can afford the median home.

This proposal doesn't hit people making over $160k, it hits people making over $250k, about 100 stacks more and solidly in the top 5% of the nation. I empathize with their higher cost of living, but if we have a funding shortfall, who other than the most well off should we be raising taxes on first?

but if we have a funding shortfall, who other than the most well off should we be raising taxes on first?

Its always best to tax people who can't avoid the tax. Which means things like VATs, Payroll taxes, and sales taxes. All the most efficient taxes are flat or regressive. Taxing the rich is a waste of time and resources with little actual benefit to the treasury.

Its always best to tax people who can't avoid the tax. Which means things like VATs, Payroll taxes, and sales taxes.

Yes, this is a tax on payroll.

Sure, but then its still another progressive tax. Which is also a bad type of tax. The more regressive, the less it will impact economic choices.

Because the $250,000 isn't indexed to inflation it's just a slow transition into removing the cap on taxed income while providing benefits only on the social security max income. We've already increased taxes significantly to cover these future benefits. It's high time for benefit shortfalls to match funding shortfalls.

Because the $250,000 isn't indexed to inflation it's just a slow transition into removing the cap on taxed income while providing benefits only on the social security max income.

Yeah, the title of that section was "Raise the Payroll Cap", this wasn't hidden. Unpleasant decisions will half to be made either way, a decade and a half transition from the payroll cap that fundraises a trillion in the first decade off the top 5% of earners is one of the more reasonable ones I've seen.

It's high time for benefit shortfalls to match funding shortfalls.

Should we cut benefits by over almost a quarter? That's what we're on track to do currently.

Should we cut benefits by over almost a quarter? That's what we're on track to do currently.

Yes! Or more when that's necessary. I'd much prefer very low incomes were supplemented with on-budget, means tested assistance.

In practice, what does this look like? I honestly haven’t looked too much into the impact of cutting benefits (partially cause I consider it somewhat inevitable), but what are we thinking the consequences would be?

Right now our replacement rate is about 75%, cutting benefits by our projected shortfall would bring it to about 55-60%, which seems like a pretty massive drop in living standards for the quarter of Americans receiving SS.

Means testing seems maybe unnecessary given that we already have all the income data and do use it to factor in some progressivity to the payouts. We could just change the skew to slant even more towards lower income earners and away from the better off.

I would prefer if support were separated from social security. So I'd rather see something like the EITC for seniors whose AGI is below the federal poverty line get topped up to the poverty line separately.

My ideal policy would be a defined benefit national savings program something akin to superannuation with explicit government support for anyone who has AGI from all sources below the federal poverty line. So my proposed changes are an attempt to shift to something that could eventually become that.

I prefer this as it makes support explicit and easily measurable for future decision makers, the savings in the program goes to heirs if one dies before receiving some or all of it so it's fairer to people who die earlier, and having some of the money invested in equities and internationally buffers some of the monetary effects of boom generations on asset prices.

I empathize with their higher cost of living, but if we have a funding shortfall, who other than the most well off should we be raising taxes on first?

The most numerous, who already aren't paying their share of the tax burden.

From my OP:

  1. Raise Payroll Taxes - “even a modest change, such as a gradual increase of 0.3 percentage points each for employees and employers (or less than $3 per week for an average earner), could close about one-fifth of the gap.”

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