Why is restoring the cut the payroll tax for social security benefits a tax increase if the money is eventually paid back to beneficiaries, and in many cases in amounts more than what is paid in.  I'm sure the argument is that you could make more money if it were invested differently.  The assumptions made about this and many other long term investments are really oppen for discussion.

I don't want to get snarky with anyone but for many, this is their retirement money and their only retirement money.  Until they means test people regarding paying people benefits, I'm in favor of as much money going into the trust fund for as long as possible, so that benefits can be paid for as long as possible.  Many people are unable to self fund their retirement and the alternatives are not pretty.

Comments

  1. Andy KrauseJanuary 3, 2013 at 9:19 PM

    I think the phrase "money is eventually paid back to beneficiaries" is not necessarily true. The trust fund is just credits issued when revenues exceed payments. The treasury must borrow funds to reclaim the credits. Beneficiaries are beginning to outnumber the ones paying in. Immigration and higher birth rates would help. Means testing indicates some payors will never benefit so that is a tax increase for them. For us, the government could just lower the benefit and presto no borrowing needed to reclaim credits. I taking my benefits now. The future for SS seems very shakey.

    ReplyDelete
  2. John AsgeirsonJanuary 4, 2013 at 4:25 PM

    There may need to be adjustments to the program to make sure the intergenerational pass through will continue. My parents received much more in benefits or cash than they ever paid into the system. Whether that will continue is dicey, but I think continuing the 2% reduction of the payroll tax would have been unwise regardless of the immediate impact that it will have on workers paychecks. Medicare is a much larger problem and more difficult problem to solve.

    ReplyDelete

Post a Comment

Popular posts from this blog

Two Months and Eight Days

Early voting and mail in voting will take place before November 5, 2024. And on a related front I hope people will notice that it does not take four years of partisan snark and sniping for the voting public to make a decision about who the next president will be.  I voted  in the Florida primary for the November Election on August 20, 2024. Locally, the mood of the electorate in Miami has changed.  A few weeks ago I just couldn't imagine a person born in 1942 running for reelection as president or a person with as much baggage as an ex-president running for office, who could legitimately be understood to be running for office as a strategy for not going to prison.  Assuming he would win, he could, stop any prosecutions and if he lost he could further question what democracy is.  And it is no surprise that the former president has started complaining about an election that hasn't happened and claiming that the opposition will have stolen the election if he does n...
Read more

Internet Dust Ups

 A high school classmate shared on FB, something from a 64 year old commercial pilot who had passed a exam to fly on of the latest jets in their fleet of aircraft.  I was also aware of an FAA rule about retirement at age 65 for commercial pilots.    In the U.S.,  there are no  FAA  age limits for pilots except for commercial airline pilots employed by airlines certificated under 14 CFR Part 121 . These airlines cannot employ pilots after they reach the age of 65. However, these pilots may stay on with a Part 121 carrier in some other role, such as flight engineers. I then went on a digression about the retirement of folks in professions like law or accounting.  From my own experience 30 years at a job or working for an employer is a very good time to start serious planning for the next chapter in your life.   And for my efforts at explaining my work history, working with folks who lost their jobs through no fault of their own.  I wa...
Read more

What Is Official These Days?

 I would guess most people would understand what Official means.  Just because a person holds a public office doesn't mean everything he might do is official and everything he might not do is official as well. “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness". from J. Kenneth Galbraith interview. And oh, by the way, moral justification at times isn't much more than a fig leaf, you can bet someone got screwed or got the proverbial get out of jail free card.
Read more