The Social Security Tax Increase Is Coming 18 comments
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Get ready for the social security caps to be lifted. It will represent one of the larger tax increases in US history, but it's unlikely to fix the looming Social Security's inevitable shortfall. According to the Heritage Foundation, it may delay the point at which the Social Security fund runs out of money by six or seven years.
Here is why politicians will push to raise Social Security taxes. According to the latest Congressional Budget Office report (bottom of post), the fund will be wiped out in 30 years or so, possibly even earlier. The chart below is the latest projection of the fund's capitalization from CBO.
To put it another way, the graph below shows the probability by year of the fund going into the red.
Rather than looking for more permanent solutions, taxation seems to be the way forward to fix these types of problems. At some point the US will look like France in terms of taxation levels (combining local, state, federal, and Social Security), without the great benefits the French enjoy. The Social Security tax increase, together with the healthcare reform taxes, cap & trade, etc. combined with massive state tax increases will negate much of the stimulus that has been provided. Tax hikes will make the "double dip" recession significantly more likely.
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I expect that those working will be making contributions on a greater portion of their pay. I also expect that portion of my benefit that is taxed to be greater.
We may think government should be made smaller (I do); but in the real world, it just ain't gonna happen. Too many wars, too much spent on post 9-11 and government reorganization, too much spent on 'stimulis', etc., etc., etc.
Therefore taxes must be increased. To do otherwise is unfair to our future and that of our children.
It has become quite obvious that the level of commitments made by the government to social security and medical care is unsustainable. Tax hikes alone will not over it, unless Americans are willing to accept income taxes at 50% or more. It will have to be a combination of significant increases in taxes combined with significant reductions in the commitments made to social security and medicare. Also, maybe extending the mandatory retirement age to 70+ would help ease the pain.
Either way, it would be a rude awakening for all.
Lift the cap on earnings;
Means test the benefits
This won't begin to fix the mess they've gotten us in so they will try to raise taxes to 1950 levels without deductions and impose taxes on wealth. They still follow the mantra - From each according to his ability, to each according to his needs. Socialism should be recognized as the religion it is so that it can be struck down as a violation of the First Amendment.
Remember! the Bush tax cuts are removed in 2010,( the tax is independent of the SS tax rate), and the net income to households will plummet, consumer demand will fall, S&P earnings will continue to fall, so P/E declines and markets fall....... Then the lights dim because its the last act of the play where the Witch eats the children.
Then audience discovers it is not just a play its reality.
Drawing down the trust fund really requires the govt. take cash from some other source. That is very sharp contrast to the buildup in reserves that have been the norm for the 70 years since the Social Security scheme was hatched. The pols have had 70 years of fun squandering the excess cash. Now there is the piper to be paid.
On Aug 17 12:14 PM richjoy403 wrote:
> I am a social security recipient (and a conservative). ALL of us
> will soon have increased taxes...it must be so.
>
> I expect that those working will be making contributions on a greater
> portion of their pay. I also expect that portion of my benefit that
> is taxed to be greater.
>
> We may think government should be made smaller (I do); but in the
> real world, it just ain't gonna happen. Too many wars, too much
> spent on post 9-11 and government reorganization, too much spent
> on 'stimulis', etc., etc., etc.
>
> Therefore taxes must be increased. To do otherwise is unfair to
> our future and that of our children.
Confiscatory taxation must go -- it is legalized theft and the enabler of Socialist programs in America!!!
fairtax.org
On Aug 17 01:54 PM The Geoffster wrote:
> Here's the solution the social democrats want:
> Lift the cap on earnings;
> Means test the benefits
> This won't begin to fix the mess they've gotten us in so they will
> try to raise taxes to 1950 levels without deductions and impose taxes
> on wealth. They still follow the mantra - From each according to
> his ability, to each according to his needs. Socialism should be
> recognized as the religion it is so that it can be struck down as
> a violation of the First Amendment.
Maybe the politicians assume the voters are going to throw them out in the 2010 midterms, so they might as well do as much damage before as they can before they go.
A memo obtained by the Huffington Post confirms that the White House and the pharmaceutical lobby secretly agreed to precisely the sort of wide-ranging deal that both parties have been denying over the past week.
The memo, which according to a knowledgeable health care lobbyist was prepared by a person directly involved in the negotiations, lists exactly what the White House gave up, and what it got in return.
It says the White House agreed to oppose any congressional efforts to use the government's leverage to bargain for lower drug prices or import drugs from Canada -- and also agreed not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements.
In exchange, the Pharmaceutical Researchers and Manufacturers Association (PhRMA) agreed to cut $80 billion in projected costs to taxpayers and senior citizens over ten years. Or, as the memo says: "Commitment of up to $80 billion, but not more than $80 billion."
Representatives from both the White House and PhRMA, shown the outline, adamantly denied that it reflected reality. PhRMA senior vice president Ken Johnson said that the outline "is simply not accurate." "This memo isn't accurate and does not reflect the agreement with the drug companies," said White House spokesman Reid Cherlin.
Stories in the Los Angeles Times and the New York Times last week indicated that the administration was confirming that such a deal had been made.
Critics on Capitol Hill and online responded with outrage at the reports that Obama had gone behind their backs and sold the reform movement short. Furthermore, the deal seemed to be a betrayal of several promises made by then-Sen. Obama during the presidential campaign, among them that he would use the power of government to drive down the costs of drugs to Medicare and that negotiations would be conducted in the open.
Blaming this on Obama is STUPID! We're spent ourselves into oblivion, and cutting services won't balance the budget.
It's the debt, stupid!
But I doubt they will increase middle class taxes. It is too unpopular.
Instead, I believe that Obama and the liberals will give us the VAT (value-added-tax) to pay down the deficit, fix social security and medicare, pay for the accelerating costs of national (single payer) healthcare, network to support 12+ million (freeloading) new citizen (former illegal aliens) registered Democrat voting block, and all the other socialist spending programs in Obama's agenda.
The VAT may start small (like the income tax) and then explode later to 50+% on everything we buy- permanently trashing the American standard of living.
We will get the tax cost of European socialist states without the benefits for all that they do.
On Aug 18 08:44 PM snagglesnarf wrote:
> The Social Security obligation at this point is 40 to 50 Trillion
> dollars, of which we have saved only pennies on the dollar. Even
> if we doubled the SS tax, there is no way we can meet this obligation.
> The money will increasingly come out of the general fund.
BWT one of the big reason the national debt, really the half of it the intergovernmental debt, increased so much was the baby boomer being in their peak earning years and thus highest levels of contributions to the system - causing higher surplus. Which in turn caused higher mandatory creation of government debt. Its not like this "trust Fund" can be invested anywhere else. What do people think the SS trust is some pile of money in vault - the amount is close to the entire amount currency in circulation.
And it is the republicans who are destroying our economy by letting big companies ship all the high value manufacturing jobs to places like china. We can all be barbers, but you cant eat the hair off peoples heads. Manufacturing is exactly what it is - turning things we dig out of the ground into useful products, eg cars, computers, medicines etc.
And much of our wealth is now in the hands of the Chinese. Somewhere back in school days I learned that you have to study people who are your competitors, and even enemies.
And it was Mao Tse Tung who told the world that Capitalists would sell China the rope with which they would hang us. So very true.
If we had the good mfg jobs back here there would be plenty to go around, including the compact between generations which is what Social security and Medicare is .
A compact under God that the younger generation will support those who brought them into the world, during their declining years.
Which is exactly the opposite of what the hypocrites of the family values people want to have, they'd prefer to see old people eating cat tuna. And there's all the people we see coming to the food banks for handouts _ we volunteer there - because their jobs have been stolen. Because their homes have been stolen by the crooked bankers who stole trillions on wall street, giving us the second (almost) great republican depression based on greed.
As a psychologist , one thing every one needs to understand is the principle that the wealthier people get, the less they can put themselves in other peoples shoes. Religion wise, they perfectly fit the stories from the bible of how Money is the root of all evil.
And how the republicans, our so called party of family values, subscribe to that greed of the Golden Calf.
Beware- you may well be going to hell. But at least you will have lots of company - the religious leaders who sold their soul to greed and the republican party faithful.
IF A PRIVATE COMPANY WAS RESPONSIBLE FOR THIS UPSIDE DOWN PYRAMID SYSTEM THEY WOULD JOIN MADOFF IN JAIL!!