SS Funding Solution

[scotchtiger]

Common sense, logical solutions to our major political issues seem to evade our politicians and many pundits as well. I'll start with this issue and may roll out a few more in the coming weeks.

First, I hate taxes. Everyone who has read my posts on this board for years knows that. But there's also a reality that we face, primarily due to bad ideas and bad execution around entitlement programs and government dependence. So here we are. To solve it, I propose the following:

Raise the SS tax from 12.4% to 14%. This means most employees will see a 0.8% increase in SS taxes with their employer also getting a 0.8% increase on the matching tax.

This will raise approximately $175 billion per year based on 2025 collections. The 2025 SS annual deficit was $160 billion. This does not completely cover long-term estimates for the program however, so an additional measure is needed.

I suggest that the nerds/actuaries sit down and make minor adjustments to early collection age (62), full retirement age (67), latest collection age (70) and collection amounts to further solidify long-term solvency. This can be phased in with plenty of notice so that current recipients and those close to retirement are either unaffected or negligibly impacted.

Boom. Problem solved. Everyone pitches in. Program is secured.

I've seen other solutions like raising the income cap. This is of course really, really stupid. It already goes up a lot each year, plus payouts are capped. This is a problem for everyone to solve, not the top 5% of earners. Especially when the top 5% already pays ~60% of all federal income tax. They are doing their part. This dumb idea is kicked to the curb in favor of the far more logical one proposed above.

I really wish both parties would come together to solve problems in a reasonable way. But what we get are either bad ideas or no ideas. I think I'll do immigration next.

 

[tarheelbybirth1]

The last SS reform set a cap that covered 90% of all income. That has since dropped to 83% as income disparity has ballooned. Raise the cap back to cover 90% and cover a full 25% of the shortfall. Simple step.

 

[Palmerhawk]

Sounds like a decent concept of a plan.
I could support this band- aid.
Sheer demographics indicate by 2037-2040 the bulge of SS boomers will be coming off the rolls, which will relieve the pressure
It's that 2032- 2037 period when trust fund is depleted.
It should be a major discussion point for mid- terms but in 2028 campaign it will be front and center.
Old folks vote....ignore at your peril, 2028 candidates.

 

[scotchtiger]

The last SS reform set a cap that covered 90% of all income. That has since dropped to 83% as income disparity has ballooned. Raise the cap back to cover 90% and cover a full 25% of the shortfall. Simple step.

My solution is better.

If you raise the cap, you must also raise payout amounts at the top to account for increased contributions from higher earners. With mine, that's not necessary. You will also be disproportionately targeting hardworking families who already pay very high income tax rates.

With everyone contributing a very modest amount, the problem is solved fairly and equitably.

 

[Fasteddie24]

Kick the Illegals off that Joe Biden added.

Also, look at all of the people on disability; a lot of them shouldn't be receiving benefits.

 

[95Hawk]

Kick the Illegals off that Joe Biden added.

Also, look at all of the people on disability; a lot of them shouldn't be receiving benefits.

It must be amazing going through life so uninformed.

 

[Titanhawk]

The last SS reform set a cap that covered 90% of all income. That has since dropped to 83% as income disparity has ballooned. Raise the cap back to cover 90% and cover a full 25% of the shortfall. Simple step.

I don't know if that's a good measure or not. Is it 90%/83% of tax payers? The "top" of SS taxed wages goes up every year and is now $184,500

 

[Rifler]

My solution is better.

If you raise the cap, you must also raise payout amounts at the top to account for increased contributions from higher earners. With mine, that's not necessary. You will also be disproportionately targeting hardworking families who already pay very high income tax rates.

With everyone contributing a very modest amount, the problem is solved fairly and equitably.

I'd raise or eliminate the cap but hold payout amounts,... The benefits side of the program should not be enhanced, and very likely should be reversed somewhat...

 

[hawkeyetraveler]

Common sense, logical solutions to our major political issues seem to evade our politicians and many pundits as well. I'll start with this issue and may roll out a few more in the coming weeks.

First, I hate taxes. Everyone who has read my posts on this board for years knows that. But there's also a reality that we face, primarily due to bad ideas and bad execution around entitlement programs and government dependence. So here we are. To solve it, I propose the following:

Raise the SS tax from 12.4% to 14%. This means most employees will see a 0.8% increase in SS taxes with their employer also getting a 0.8% increase on the matching tax.

This will raise approximately $175 billion per year based on 2025 collections. The 2025 SS annual deficit was $160 billion. This does not completely cover long-term estimates for the program however, so an additional measure is needed.

I suggest that the nerds/actuaries sit down and make minor adjustments to early collection age (62), full retirement age (67), latest collection age (70) and collection amounts to further solidify long-term solvency. This can be phased in with plenty of notice so that current recipients and those close to retirement are either unaffected or negligibly impacted.

Boom. Problem solved. Everyone pitches in. Program is secured.

I've seen other solutions like raising the income cap. This is of course really, really stupid. It already goes up a lot each year, plus payouts are capped. This is a problem for everyone to solve, not the top 5% of earners. Especially when the top 5% already pays ~60% of all federal income tax. They are doing their part. This dumb idea is kicked to the curb in favor of the far more logical one proposed above.

I really wish both parties would come together to solve problems in a reasonable way. But what we get are either bad ideas or no ideas. I think I'll do immigration next.

You have my vote.

 

[95Hawk]

I'd raise the cap but hold payout amounts,... The benefits side of the program should not be enhanced, and very likely should be reversed somewhat...

This is what will cause a lot of politicians - financed by the wealthy - to balk at the changes. There needs to be a compromise between higher contributions = higher payouts for some.

 

[WDDT]

Let it die.

 

[Rifler]

This is what will cause a lot of politicians - financed by the wealthy - to balk at the changes. There needs to be a compromise between higher contributions = higher payouts for some.

Payouts are high enough, and most individuals making the higher contributions would already be in the category of not relying on Social Security for their retirement anyway,.. They don't really need the higher payout.

 

[95Hawk]

Payouts are high enough, and most individuals making the higher contributions would already be in the category of not relying on Social Security for their retirement anyway,.. They don't really need the higher payout.

It will never pass Congress that way when the lobbyists get involved.

 

[Hawkedup]

Common sense, logical solutions to our major political issues seem to evade our politicians and many pundits as well. I'll start with this issue and may roll out a few more in the coming weeks.

First, I hate taxes. Everyone who has read my posts on this board for years knows that. But there's also a reality that we face, primarily due to bad ideas and bad execution around entitlement programs and government dependence. So here we are. To solve it, I propose the following:

Raise the SS tax from 12.4% to 14%. This means most employees will see a 0.8% increase in SS taxes with their employer also getting a 0.8% increase on the matching tax.

This will raise approximately $175 billion per year based on 2025 collections. The 2025 SS annual deficit was $160 billion. This does not completely cover long-term estimates for the program however, so an additional measure is needed.

I suggest that the nerds/actuaries sit down and make minor adjustments to early collection age (62), full retirement age (67), latest collection age (70) and collection amounts to further solidify long-term solvency. This can be phased in with plenty of notice so that current recipients and those close to retirement are either unaffected or negligibly impacted.

Boom. Problem solved. Everyone pitches in. Program is secured.

I've seen other solutions like raising the income cap. This is of course really, really stupid. It already goes up a lot each year, plus payouts are capped. This is a problem for everyone to solve, not the top 5% of earners. Especially when the top 5% already pays ~60% of all federal income tax. They are doing their part. This dumb idea is kicked to the curb in favor of the far more logical one proposed above.

I really wish both parties would come together to solve problems in a reasonable way. But what we get are either bad ideas or no ideas. I think I'll do immigration next.

I could get on board with this. Seems easy enough.

One other suggestion for the income cap though. What if once you reach the $184,500 income limit we had somewhat of a donut hole period where you pay no additional until you reach 250k. Once you go over 250k, both the employee and employer pay an additional 1% with no added benefit. Similar to Medicare on earnings over 250k.

 

[scotchtiger]

I'd raise or eliminate the cap but hold payout amounts,... The benefits side of the program should not be enhanced, and very likely should be reversed somewhat...

Ew, gross. So you want to confiscate more money from millions of hardworking Americans and offer nothing in return? I’m a hard, hard no on this approach.

 

[Rifler]

It will never pass Congress that way when the lobbyists get involved.

Perhaps,.. But as I see it beneficiaries of the program are going to have to do some of the lifting required to save Social Security,... This fix can't all happen on the receipts side of the ledger, primarily on the backs of taxpayers.

 

[fatpiggy]

Let it die.

What is your plan for old people who can not physically work? Let them rot on the street? That is not a good society.

 

[Finance85]

End early retirement at 62. Everyone has to start at 67.

 

[scotchtiger]

I could get on board with this. Seems easy enough.

One other suggestion for the income cap though. What if once you reach the $184,500 income limit we had somewhat of a donut hole period where you pay no additional until you reach 250k. Once you go over 250k, both the employee and employer pay an additional 1% with no added benefit. Similar to Medicare on earnings over 250k.

I don’t love it, but it is exponentially better than just raising or eliminating the cap.

An alternative would be something like the NIIT that Obama added, though I would set the threshold substantially higher. Maybe 1% of capital gains above $10M per year or something since everyone seems to be on board with taxing the actual rich.

 

[scotchtiger]

What is your plan for old people who can not physically work? Let them rot on the street? That is not a good society.

Yea, it’s a horrible program, but we’re stuck with it. I would love to find a way to phase off of SS over time though and replace it with a forced individual contribution account.

 

[Rifler]

since everyone seems to be on board with taxing the actual rich.

Of course they are,... given that their general definition of "actual rich" is "people richer than me".

 

[fatpiggy]

Yea, it’s a horrible program, but we’re stuck with it. I would love to find a way to phase off of SS over time though and replace it with a forced individual contribution account.

I was responding to the person who said "let it die". OK, but what's the new plan? There has to be SOME plan because we can't just have old people rotting on the street corner.

I agree i think there are way better solutions, but as far as practicality your plan is realistic and achievable.

 

[alaskanseminole]

I totally missed this thread, OP.

I wasn't trying to steal your thunder, but got the idea when replying to JHP in another DSA-themed thread this morning.

1. Social Security & Medicare -- What Should We Do With Them? - Forums

Since most of our political discussions turn into pissing matches rather than focusing on the actual issues w/ each side using the most extreme position from the other side as a weapon, let's try something different. I'm going to do a series of 10 political issues, putting three perspectives...

www.on3.com

 

[scotchtiger]

I totally missed this thread, OP.

I wasn't trying to steal your thunder, but got the idea when replying to JHP in another DSA-themed thread this morning.

1. Social Security & Medicare -- What Should We Do With Them? - Forums

Since most of our political discussions turn into pissing matches rather than focusing on the actual issues w/ each side using the most extreme position from the other side as a weapon, let's try something different. I'm going to do a series of 10 political issues, putting three perspectives...

www.on3.com

All good!

 

[Tom Paris]

This is what will cause a lot of politicians - financed by the wealthy - to balk at the changes. There needs to be a compromise between higher contributions = higher payouts for some.

I pay more into SS than Jeff Bezos and Elon Musk do, because they both take salaries that are less than mine.

 

[Tom Paris]

End early retirement at 62. Everyone has to start at 67.

Gotta love the Republican work and then die approach to saving money.

 

[scotchtiger]

I pay more into SS than Jeff Bezos and Elon Musk do, because they both take salaries that are less than mine.

And how exactly does raising SS taxes on families making $185K (what raising or eliminating the cap does) solve your issue with Jeff, Elon and the ultra rich? Because this is the only proposal I’ve seen from the left.

 

[baltimorened]

Payouts are high enough, and most individuals making the higher contributions would already be in the category of not relying on Social Security for their retirement anyway,.. They don't really need the higher payout.

the max payout is only about $62000.....since when does need enter....when the program was created, need was not a factor...we shouldn't change the game in mid stream..also, don't forget, the tax on SS benefits are higher based on income.

 

[Tom Paris]

And how exactly does raising SS taxes on families making $185K (what raising or eliminating the cap does) solve your issue with Jeff, Elon and the ultra rich? Because this is the only proposal I’ve seen from the left.

I'm not arguing with you. I like your proposal. The wealthy who would oppose it don't ever have to worry about SS and they also cheat the system by being able to claim the make 50K a year while being a multi-billionaire or trillionaire, like Musk.

 

[scotchtiger]

Gotta love the Republican work and then die approach to saving money.

I plan to retire at 55 and live a long life after that. It’s not a Republican mindset to work and then die. It’s a Republican mindset that early retirement is something you should pay for by yourself.

SS is intended to be a safety net program to ensure there aren’t homeless and impoverished seniors. It’s not a retire and goof off program. You are free to do that - and I will - but that’s your personal responsibility.

 

[WDDT]

What is your plan for old people who can not physically work? Let them rot on the street? That is not a good society.

You mean people who worked their entire lives and apparently cant actually afford to retire?

 

[fatpiggy]

You mean people who worked their entire lives and apparently cant actually afford to retire?

yes. And the people who were irresponsible and did not save.

Do you want them to rot on the street corner? Will be a drag on the rest of society to have a bunch of weak feeble old people sitting on the street.

 

[GesterHawk]

I'd raise or eliminate the cap but hold payout amounts,... The benefits side of the program should not be enhanced, and very likely should be reversed somewhat...

You could do a little bit of both.
Raise the cap and a slight withholding increase.

Eventually when the Boomers are gone you could reduce the amount of yearly increases to match yearly outlays after a little cushion has been built up.

 

[GesterHawk]

Payouts are high enough, and most individuals making the higher contributions would already be in the category of not relying on Social Security for their retirement anyway,.. They don't really need the higher payout.

I like Rifler the socialist. He makes sense.

 

[Rifler]

the max payout is only about $62000.....since when does need enter....when the program was created, need was not a factor...we shouldn't change the game in mid stream..also, don't forget, the tax on SS benefits are higher based on income.

Aware of all that,... Anyone currently earning beyond the cap with less than a very substantial 401K balance is an idiot,... A max payout of $62K is more than adequate for what is supposed to be a safety net program.

 

[WDDT]

yes. And the people who were irresponsible and did not save.

Do you want them to rot on the street corner? Will be a drag on the rest of society to have a bunch of weak feeble old people sitting on the street.

If they didnt save that is a them problem. Any program provided by the government is going to be hamstrung with administrative cost. The government having a program that returns pennies on the dollar isnt justified by some people being stupid.

Darwin has been short changed.

 

[GesterHawk]

I could get on board with this. Seems easy enough.

One other suggestion for the income cap though. What if once you reach the $184,500 income limit we had somewhat of a donut hole period where you pay no additional until you reach 250k. Once you go over 250k, both the employee and employer pay an additional 1% with no added benefit. Similar to Medicare on earnings over 250k.

I'd play with that number a bit, but I don't hate it.

 

[GesterHawk]

End early retirement at 62. Everyone has to start at 67.

If you can retire at 62, you don't need Social Security for 5 years. I don't hate it.

 

[RockyMtNole]

If they didnt save that is a them problem. Any program provided by the government is going to be hamstrung with administrative cost. The government having a program that returns pennies on the dollar isnt justified by some people being stupid.

Darwin has been short changed.

I know you’re exaggerating to make a point, but you can’t really believe this. We’d have 40-50 million people homeless or starving.

 

[GesterHawk]

I was responding to the person who said "let it die". OK, but what's the new plan? There has to be SOME plan because we can't just have old people rotting on the street corner.

I agree i think there are way better solutions, but as far as practicality your plan is realistic and achievable.

Only if the people can work and contribute. Which is basically what SS is - you work and they force you to pay into it.