[jeffkrol]

Social Security has a contribution cap on the taxation side and a compensation cap on the benefit side. My only problem with lifting the contribution cap and the benefit cap in lock step is that social security is a poor retirement savings vehicle compared to other options out there. My problem with raising the contribution cap without raising the benefit cap is that it is unfair.

1) SS is as good of retirement vehicle as most can understand... and safe to boot
2)I reiterate.. Fed doesn't have to fund anything w/ taxes
3)Who said life is fair.. plenty of 99-ers are feeling that way right now.. Taking 2% from millionaires leaves them a whole s3itload of money.. Taking 2% from the lowest classes breaks them. whop cares about fair. and it's worked before (higher taxes for the uppers) and actually was the ONLY way our society worked for everyone's benefit.. FAIR???? give me a break.. ther is NOTHING in this country that is set up "fair"........

This time last year Republicans were insisting that the Bush tax cuts be made permanent without paying for a penny of the cost, even though there is no evidence that they stimulated the economy.

Saying that they are now concerned about the impact of the payroll tax cut on the deficit and its lack of stimulative effect makes Republicans sound a lot like Captain Renault in “Casablanca,” when he said he was shocked to discover gambling going on as he was handed his winnings.

Republicans like to pretend that cutting spending is economically costless, even stimulative, whereas raising taxes in any way whatsoever is so economically debilitating that it dare not be contemplated. This view is complete nonsense.

Careful studies by the Congressional Budget Office and others show that certain spending programs are highly stimulative, whereas tax cuts provide very little bang for the buck.

http://economix.blogs.nytimes.com/2011/12/06/raising-taxes-on-the-rich-not-whether-but-how/



It's not how much they spend but what they spend it on.....................

Republicans often say that tax evasion and avoidance by the wealthy would cause revenues to fall, rather than rise, if their taxes are raised. But according to the Tax Policy Center, rates higher than the current top rate of 35 percent accounted for 29 percent of individual income tax revenue as recently as 1986, during the Reagan administration.

Recent studies by Peter Diamond and Emmanuel Saez and by A.B. Atkinson and Andrew Leigh find that increasing the top income tax rate would raise net additional revenue at least until it reached 63 percent and probably much higher.

Nor is it correct that low taxes on the rich are essential for economic growth. Recent studies by Dan Andrews, Christopher Jencks and Andrew Leigh and by Thomas Piketty, Emmanuel Saez and Stefanie Stantcheva show that while tax cuts for the rich have raised their share of aggregate income, they have not raised the rate of economic growth.

There are legitimate questions about whether the temporary payroll tax cut stimulated employment or if its expiration will reduce growth, about whether a surtax on millionaires is the best way to pay for it and how much additional revenue can reasonably be expected.

But the idea that the rich cannot or should not pay more should be dismissed out of hand. They can and must pay more; the only question is how best to do it.

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Last edited by jeffkrol; 12-06-2011 at 11:06 AM.

[mikemike]

1) SS is as good of retirement vehicle as most can understand... and safe to boot
2)I reiterate.. Fed doesn't have to fund anything w/ taxes
3)Who said life is fair

1) I agree for low income/low financial skill people but when we start talking about why not extend it beyond 106K, we are generally talking about people who are either financially savvy or hire financial consultants so they would be much better served by other retirement plans and are in a position to tolerate risk.
2) Under current laws and the current social understanding of money yes it does.
3) No one, but the idea that rich people should pay higher taxes to fund expanded government services for poor people is done so under the guise that the rich should pay "their fair share." My question is where else does this kind of logic get applied?

If you want a government that is an insurance company with an army, the insured will need to pay their premiums at actuarially sound market rates that is how insurance works, that is fair. It seems the desire is now that we have spent the past 60 years building this insurance company, we should change it to a charity with an army. Charity organizations are the only ones I know of where you have rich patrons and non-rich recipients of those donations and services provided (at least thats the way its supposed to work in theory, right). Charity organizations end up going out of their way to kiss the butts and please their patrons, they are very plutocratic organizations so if that is what you want our government to be then you might want to be careful what you wish for.

[Nesster]

are in a position to tolerate risk.

And that sentence, sir, means a whole different thing to someone young(er) vs someone old(er), especially having gone through the last decade and a half.

Truth is, 'are in a position to contribute >$10-15K per year out of one's pay' is more accurate.

The demographics of the baby boom ought to have (and to a good extent did) created a bull market in assets. But it also has created a series of bubbles. At the end of it, I for one have tolerated risk AND been in a position to contribute maximums, and yet... the risk part has largely only given me a ride, rather than the risk-reward calculated returns.

One smart thing I did - inadvertently, yes, but also on purpose - was when I sold a good portion of my Janus equity funds right before the dot com crash, and invested in short term bonds, which immediately had a bull market. Inadvertent, because market timing mostly seems that way. On purpose - I wanted to make sure I held on to our daughter's college tuition. The timing was just right. The timing for our youngest is all wrong - company stock was down 90% and still is down 85%, and all the investments are wheezing.

Lessons for the young: chances are, when you most need it, your 'tolerant of risk' investment will likely be in the crapper. Also, don't invest in the same industry you work in. First, your income and job may be on their way out, and second, the stocks will be way down as well.

The pension they had around here a few years back (and then discontinued) seemed like a funny little nothing back then... now it's a good thing to have and actually amounts to something.

[jeffkrol]

1
2) Under current laws and the current social understanding of money yes it does.

Continuing w/ the illusion is like pretending the sun revolves around the earth...... Time to join the real world....and as far as I know there is no "law" involved......................Remember Reagan and Cheney.......

3)Nowhere.. works booth ways.. why sould those that can't afford taxes pay them...........any taxes.. Remember the IRS is "volunteer". (just for fun see article below)....
http://www.fff.org/freedom/0500a.asp

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Last edited by jeffkrol; 12-06-2011 at 02:39 PM.

[GeneV]

I think that to the extent that the "world doesn't work this way" it has been a world that has led to unrest and even revolution. A world where the very few claw tenaciously on to every dollar which comes past them has not been a stable one in the long term.

[Ratmagiclady]

Mikemike's also forgetting that there's more about our 'tax burdens' than just income or Social Security payments, even from his standpoint that there's something 'unfair' about people who get the most out of this country paying more of that income back in, actually as a percentage of income, the lower classes pay just as much or more when you add up all the regressive taxes: especially via state governments when they can't pass income or property or corporate taxes and instead raise sales taxes and fees: they're talking about bringing back taxing *groceries* down here, which is taking the most *directly* from the poorest.

When they start tacking fees onto all your utilities and everything related to keeping a car on the road, it may not seem like much to a wealthy person, but that's another big chunk out of poor people's budgets and the local economies both... Even *for* the wealthy all it ends up doing is meaning there's less money to be made from actual *commerce* so in order to make their piles they're just keeping on gutting local economies to make the stocks look profitable... And that can't last forever anyway. Even for them.


When it comes to notions of 'privatizing Social Security,' that's simply insane: blaming people if we don't have the 'financial skill' of stockbrokers with big lawyers when the people who made this mess are just trying to use the system to make more profits off of it, ...despite the fact that if Bush had been allowed to gamble with the Social security funds on the stock market, it's *already* have gone bust. ...doesnt' change the fact that predatory financial practices and deregulation and masses of unclear 'fine print' have *already* meant a lot of people got and do get screwed in just the same way.

It's called Social *security* not 'Socialized Corporate Profits And Take Your Chances, Granny,' ...I think half the problem here is that everyone's *already* expected to play accountant while dealing with their real jobs and families and possible disabilities, All the complications that come of someone *else* making a profit off the economics of daily life: this is one reason a 'simple' tax code is such an appealing idea, even if the effects would be even worse on most people. Cause people *don't* understand how stuff like this works. (And despite a computer age, we're *still* dealing with more complexity pushed on us *by* people who use the computers. )


I may understand economics better than most out there, but that doesn't mean that even the 'simplest' numbers and legalese don't kind of swim around on a given page when the arthritis or fatigue are bad: if they didn't I could probably *be* some kind of accountant, apart from that matter of the college degrees. Just managing my check register is something I usually have to go over three times to be sure I haven't made errors. It's one of the most daunting things about trying to run a little micro-business to try and make ends meet here. Now the big money wants to try to say 'You have to play stockbroker, or give a chunk to someone who can, too?' How's that suppopsed to work out better?

It's not better. It's ideological from the Right, so they can take more from people who may *not* have financial acumen... Then of course say, 'This is your own fault.'


Even just the time involved in stuff like that: when people who *are* working already are working longer and longer hours for less and finding the bills and the rest are that much harder to work out, adding more burden of complexity and effort to *all those people's lives* hardly seems to be a winning equation for most of us. Maybe it's not a big deal to professional bean-counters, but they forget that not everyone and not every circumstance is the same, nor supposed to be. When people are claiming, 'Half a million a year of take-home income, really isn't that much,' there's a real perspective problem there. There's a lot of nibbling-to-death of other people's lives going on when they just put the squeeze on more and more: you know, when the prices of food and bills just keep going up and up and up, regressive taxes added on here and there: the corporations are making their record profits and just pushing more and more of the burden and privation and uncertainty and 'austerity' and stress *downward* ....then hoping to push the 'blame' anywhere but the people *doing* it.

And they don't like to say 'inflation,' but the *damn prices of everything keep going up.*

Of basic necessities, anyway. And you know it's having a suppressive effect on economies trying to recover: if people *on* Social security can't go get a beer or a cup of coffee, where are they? Not in local businesses, anyway. (One thing that spooks me lately, particularly in this town.. 'Where are the old folks?' I'm certainly getting out a lot less than I used to. ...when I do, I see the effect in local establishments: higher prices on everything and less *people*.... There's probably only so many eleven-dollar hamburgers to be bought out there anyway: certainly if I can squeeze out the few bucks for a beer out every week or two, it's a whole other matter when that beer's suddenly five or seven. ....then that business gets nothing, waitress doesn't get a tip, whatever she'd spend it on doesn't get bought... downward cycle. Quality of life goes down for everyone, (in that example, who really wants to drink an overpriced beer in a near-vacant pub, anyway,) ....and in the bargain, as part of this 'gentrification' process, you're losing social institutions and some of the better intangibles in life because what was once part of living becomes 'a luxury you can't afford.'

Which goes to the social dangers of treating everyone as though we're supposed to be spending our lives on our own against ever-tightening corporate screws. Donut shops long ago stopped being 'a neighborhood gathering place' and became 'a sales counter.' Sometimes not much more than a walk-in vending machine.

We lose more than money. We lose each other in a lot of ways. Something about our humanity. We just turn into a bunch of bills to be collected.

[mikemike]

It's called Social *security* not 'Socialized Corporate Profits And Take Your Chances, Granny,' ...I think half the problem here is that everyone's *already* expected to play accountant while dealing with their real jobs and families and possible disabilities, All the complications that come of someone *else* making a profit off the economics of daily life: this is one reason a 'simple' tax code is such an appealing idea, even if the effects would be even worse on most people. Cause people *don't* understand how stuff like this works. (And despite a computer age, we're *still* dealing with more complexity pushed on us *by* people who use the computers. )

I think there would be a great deal for individuals and society with a much simpler tax code and some of those benefits would offset problems our system creates for low income people. Low income people who aren't good with financial stuff and math are more likely to go out to a tax prep place to prepare there very simple return and recover the money they had withheld and lent to the US Government interest free then pay interest on a refund anticipation loan. A tax code simple enough that anyone with a high school diploma should be able to file their taxes would leave more money in poor people's pockets throughout the year instead of making them pay to get a windfall of the money they earned every year. It would benefit society because the accountants and tax preparers are just like the physicists working on wall street, they are generally skilled with numbers and could shift into a line of work which is more productive for society like science or engineering.

One of my favorite quotes on software:
Programming today is a race between software engineers striving to build bigger and better idiot-proof programs, and the Universe trying to produce bigger and better idiots. So far, the Universe is winning. ~Rich Cook

[jeffkrol]

Why even bother w/ a "tax code" till the economy recovers.........

Just don't "punish" people for not collecting tax.......i.e. take away what they already have "budgeted".......

[Ratmagiclady]

I think there would be a great deal for individuals and society with a much simpler tax code and some of those benefits would offset problems our system creates for low income people. Low income people who aren't good with financial stuff and math are more likely to go out to a tax prep place to prepare there very simple return and recover the money they had withheld and lent to the US Government interest free then pay interest on a refund anticipation loan.

The only problem is, that's not actually true. Generally, the lower your income, the less complexity there is *about* it. For the most part low-income people are going to pay a company to get a loan (usually at ruinous interest) to get an advance on their withholding, *if* they have had enough taken out to be worth that to begin with: ie, if they're underemployed or otherwise not quite making ends meet. (Some urban poor are paying very high rents that eat up any kind of pay advantage, for instance)

That falls in a certain window, generally, usually working families. You won't find an H&R Block around *this* neighborhood, assuredly. Those tax prep places usually are hitting the niche when people are 'well-off' enough to be taking a few deductions, but not well-off enough to have a 'full time' accountant.'

'Simplifying the tax code' to make the poor 'Simply screwed' isn't going to help there.


Why is it so hard to understand that even the most basically-filed return for a working poor person gets you a better deal than just taking nine or ten percent off of each of your gross income *and* tacking the same on to everything you spend? That's just taking twenty percent *more* away from the poor *period.*

None of which makes trying to make everyone a gambler on the stock market with their Social Security a very sane idea. 'Social Security' is *supposed* to be about security, not some competition-ideology-for-the-additional-profit-of-big-finance. Expecting people to somehow not get even *more* screwed when what you'll have is someone making a profit off of 'finance products' for *that* captive market in hopes it'll somehow both make enough corporate profit *in addition* to trying not to be left with even less simply doesn't make sense. It didn't work in housing lending or junk bonds or taking away the benefits of a savings account in favor of making it somehow a 'fee for service' to give *banks* free loans and pay for the privilege....

And it wouldn't work with your idea.

A tax code simple enough that anyone with a high school diploma should be able to file their taxes would leave more money in poor people's pockets throughout the year instead of making them pay to get a windfall of the money they earned every year. It would benefit society because the accountants and tax preparers are just like the physicists working on wall street, they are generally skilled with numbers and could shift into a line of work which is more productive for society like science or engineering.

It would certainly be better if the best at math *weren't* putting their efforts into trying to squeeze money out of the people, but they're the reason those jobs aren't there in the first place, never mind the jobs that support the engineering products.

But that doesn't mean that tax codes *aren't* simple enough for any healthy person with a high school diploma: if you're poor enough.


The fact is, most people are kind of the opposite of me: I see systems and interactions quite well: arithmetic tends to boggle me: it's just plain a concentration problem, for the most part. And a memory one: I just can't seem to memorize things like most can. Never could. Supposedly a genius kid, ...I couldn't handle multiplication tables till I just figured out *how* to multiply. Every time. Simple things tend to be like you're the dyslexic with your life depending on transcribing legalese. I dunno if it's the PTSD, early head injuries, or just how I work, but calculation isn't a strong suit. Even the numbers in photography are all shapes to me.

Basic math education pretty much *does* handle it, or a five-minute job from one of those Wal-Mart kiosks, if necessary. The point is, you don't know. Making it a guaranteed worse situation doesn't give any benefit of simplicity, and making it a guaranteed risky thing guarantees some will lose. Which is precisely *the opposite* of what Social Security is *for.*




Making the poor just plain pay more, with nothing they can do about it, won't improve their financial acumen, and making the working classes *risk* their security on Wall Street is just plain insane greed, not understanding the reality.