Biden's proposed Social Security Changes and their impact

[Mik]

Was that a Biden proposal? If not, it did not belong in the article.

[Jolly]

I'm subject to WEP, so you all can go get screwed.

But...Some modest proposals...

1. No donut hole. You pay payroll tax on every dime of earned income. Make $1M a year? Then pony up your
   $124,000. You make $$10,000 a year? Pony up your $1240. benefits will be capped at a reasonable (middle-class reasonable) amount.
2. Encourage citizens to have children. The right kind of children. Children from two-parent households. Create a huge income tax break within the system for married couples who have or who adopt children. Not single moms. Not cohabitating singles. Married people, period. And if I had my way, heterosexual married couples.
3. Raise the FRA. But...Just because somebody hasn't reached their FRA, they should have continued access to Medicare at 65. Especially Medicare Advantage plans.
4. Selective immigration. Hordes of new taxpayers are not the answer, if most of them are working in lower paying jobs. Shut the border, now. Make immigration paperwork easier, especially for people with desired skills under the age of 35, or people who are bringing enough capital into the country with the express purpose of starting a business.
5. Jobs. A lot of our problem's roots are found in a shrinking middle income class and a rise in the gibmedats. I heard Senator Scott say the other day that his mother worked 16 hours a day, many days, to put food on her table and clothes on their backs. He believes their is worth in work and important life lessons to be learned on a job. I agree. The current administration, and in fact many politicians, like the votes that money can buy. Time to stop the gravy train.

Provide opportunity, but government needs to get out of the quota and equity business. Turn all the little pigs loose at the trough, and may the best pigs win.

6. Trust-busting. I think this goes hand-in-hand with job creation and competition. There are some companies in the U.S. today, that are simply too big or control too much of a sector through predatory business practices. Time for more entrepreneurship, smaller companies and more nimble business solutions. I think this atmosphere and opportunity creates more middle class jobs, which is what is needed.

7. Investment. Allow people, if they wish, to allocate a small percentage of the Social Security tax to private investment options. When I say small, I'm talking 1%-1.5% of earned income. The investments would cover best-of-breed mutual funds, spanning everything from index funds, narrow sector funds, bonds and REI's. Let's do a trial run for a couple of decades and then evaluate how well this works.

[Axtremus]

@Mik said in Biden's proposed Social Security Changes and their impact:

Was that a Biden proposal? If not, it did not belong in the article.

The article is not a “straight fact” reporting, it has an op-ed component. Towards the end the article mentions other things that are not part of Biden’s proposal (e.g., raising the Social Security tax rate, raising retirement age, means-testing for benefits). I was pointing out that the article missed the possibility of taxing other incomes other than “earned income.”

[LuFins Dad]

Reinstate the payroll tax on earned income above $400,000: In 2023, all earned income (wages and salary but not investment income) between $0.01 and $160,200 is subject to the 12.4% payroll tax,

Stupid. No donut hole. And you also need to stop limiting the upper end on returns. If you put in, you get back. Period.

Switch the inflationary tether from the CPI-W to the CPI-E::

There is no guarantee that CPI-E is higher than CPI-W. Instead, tie it to the higher of the two.

[Jolly]

@LuFins-Dad said in Biden's proposed Social Security Changes and their impact:

And you also need to stop limiting the upper end on returns. If you put in, you get back. Period.

Dunno. It's probably that, or a means test. With the latter, an individual might get cut all the way down to $0.

[Mik]

@LuFins-Dad said in Biden's proposed Social Security Changes and their impact:

Stupid. No donut hole. And you also need to stop limiting the upper end on returns. If you put in, you get back. Period.

That would rather defeat the purpose of the increase.

[LuFins Dad]

Increase the special minimum benefit: For lifetime low-earning workers with at least 30 years of coverage, the maximum benefit in 2023 is a mere $1,033.50 per month. That's well below the federal poverty rate for a single individual of $1,215 per month. President Biden proposes raising the special minimum benefit to 125% of the federal poverty level.

No real problem with that. Except that a lot of this is so region specific. Even $1500 in this area is untenable. I can probably get buy on $1500 in western PA pretty well…

[jon-nyc]

The donut hole is unconscionable. A gift to the core democratic voting block of the mass-affluent.

[Mik]

@jon-nyc said in Biden's proposed Social Security Changes and their impact:

The donut hole is unconscionable. A gift to the core democratic voting block of the mass-affluent.

Agreed.

[Horace]

One wonders if it would have passed otherwise.

[Mik]

Yes. The rich who should be taxed are of course people with more than oneself.

[LuFins Dad]

@Mik said in Biden's proposed Social Security Changes and their impact:

@LuFins-Dad said in Biden's proposed Social Security Changes and their impact:

Stupid. No donut hole. And you also need to stop limiting the upper end on returns. If you put in, you get back. Period.

That would rather defeat the purpose of the increase.

@Mik said in Biden's proposed Social Security Changes and their impact:

@LuFins-Dad said in Biden's proposed Social Security Changes and their impact:

Stupid. No donut hole. And you also need to stop limiting the upper end on returns. If you put in, you get back. Period.

That would rather defeat the purpose of the increase.

I’d like to see the numbers… but nobody should be putting in more than they will be getting back later…

[jon-nyc]

@Horace said in Biden's proposed Social Security Changes and their impact:

One wonders if it would have passed otherwise.

Who knows. I understand their motivation, they don’t want to (visibly) raise taxes on anyone making under 400k. But the effect given that the cutoff is there already is obscene.

[LuFins Dad]

Wait, did it pass? I didn’t see that…

[LuFins Dad]

@jon-nyc said in Biden's proposed Social Security Changes and their impact:

@Horace said in Biden's proposed Social Security Changes and their impact:

One wonders if it would have passed otherwise.

Who knows. I understand their motivation, they don’t want to (visibly) raise taxes on anyone making under 400k. But the effect given that the cutoff is there already is obscene.

Why $400K? 3 years ago it was the $250K group that were evil…

[Mik]

Because he promised over and over that no one making $400K or less would see a single dollar in increased taxes.

[Doctor Phibes]

Excuse my ignorance, but what is the donut hole? It's not a term I'm familiar with.

[Horace]

@Doctor-Phibes said in Biden's proposed Social Security Changes and their impact:

Excuse my ignorance, but what is the donut hole? It's not a term I'm familiar with.

It's the part of the donut they cut out, making a small round donut. They are typically sold by the dozen at donut shops.

[jon-nyc]

So today social security tax is only paid on your first 160k or so of income (too lazy to Google).

So you pay 6% (between you and your employer) of the wages up to that number and nothing after.

There have been proposals over the year to remove the cap so everyone would pay the 6% on their entire income.

This proposal would reintroduce the tax only on marginal income over 400k.

The the result would be that people making between 160-400 essentially have an exemption from a marginal tax that those above and below have to pay.

[Mik]

I could see a reduced rate past a certain point, especially if they want to keep the maximum benefit lower.