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GoredHusker
Senior Contributor

Re: Neutralizing the elderly votes to allow entitlement reform

Social Security doesn't need overhauled.  It quite simply needs to keep up with the times.  When SS was implemented, the average lifespan was 60 years old while the age to draw SS was 65.  This is why there were 52 people paying into the system for each person drawing out.  Today, the average lifespan is 78 while the age to draw is still 65.  Apples to apples would have the draw age taken up to 83. 

Taxes are going to have to be raised to pay for the hole we've dug.  I'd first implement a higher gas tax.  The next tax I'd impose would be a national food tax.  Personally, I'd like to see a makeover of the tax code.  Get rid of all the taxes and simply impose a national sales tax on everything also known as a consumption tax.  Those that buy more stuff or more valuable stuff pay higher taxes.  This would take care of those deductions you hate.  I'd also venture to guess there'd be a lot less tax evasion with a standard national sales tax.  Companies like GE would get to pay their fair share as well.   

bruce MN
Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

We may need real reform for the sake of staving off a general environment of civil disorder and anarchy than anything else. Not much different here than in a number of places that have "blown" already. Only in scale...which adds to the potential difficulties.

 

http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105

kraft-t
Senior Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

Once again you want to target the working people. A consumtion tax that taxes disproportionately those of lower or modest incomes.High income folks are not usually high consumers. They may live well but a lot of their income would go untaxed. Unless of course you want to tax the things they invest in. Then it might be appropriate if they tax that $1 million dollar farm they buy at 10%. Why is it I suspect you will oppose that?

 

Perhaps tariffs are not the answer. Maybe the tax code could favor American goods. No tariffs but the code could take the deductability of foreign goods. Walmart would find it a bit costly if they couldn't deduct merchandize made in China or India. How about those cummins dielsels that are made in Brazil.

 

BTW. the age to draw full benefits on SS is older than age 65. It was 65 & a half when I started drawing and is older than that now. At age 83 there would be a very small minority drawing benefits.

Red Steele
Veteran Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

If the top 1% would pick up their toys, and move to another country so that we get 90% or whatever the deemed "fair" rate of tax on super rich people is, but had no rich people to tax....would that make everyone feel a lot better?

 

What if the article was re-written to go after the top 10%? would the editorial staff even allow it to be published?

 

Isn't convenient to pick scapegoats, and just give the real change, ie globalization just a one line mention?

 

And Globalization applies to wealthy people and tax havens, too. Check out the ultra liberal Bono and how he shields his own wealth. Or that  late Democratic icon...Ted Kennedy, and his offshore trusts.

 

Capital, like jobs, will move to the best market. Articles like this just kick more sand over the head of the ostrich.

kraft-t
Senior Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

SS and Medicare have had a surplus. meaning that their tax revenues have been more than they are paying out. The medicare surplus is exhausted in this year. SS has about 2.8 trillion in surplus.

 

Those surplus dollars are invested in US gov't securities and the money ios given back to rich people in tax cuts. With 14 trillion in debt you still insist on the tax cuts for rich folks.

 

Targeting labor is exactly right no matter who does it. A governor in wisconsin or a farmer in Wright county. You see workers as the problem when they merely want to share in the promise of America like you do.

 

Yes Bill Gates or Rush Limbaugh should draw retirement benefits if they qualify for them. Why would you exclude the people that have paid in? If it is merely going to be a forced charity, then let tax investment income as well to share in the cost of charity.

 

Means testing would surely kill SS because not many would favor a retirement plan they cannot share in.

kraft-t
Senior Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

Who is advocating a 90% tax rate. 3% additional on income above $250K is the only recommendation I have heard. In fact i would propose that every tax payer pay that 3% increase. After all we are 14 trillion in debt and I am serious about the debt.

 

I suppose exaggeration makes for great talking points but it is a damned lie.

 

Ironically, you treat the tax evaders with some degree of respect. It's those of us that could use a little help paying for the cost of government that you hold in disdain. If they are evading, give them lower taxes as if that would stop the evasion. If you taxed them 10% they would try to get by for 2%. And you think it is our fault?

schnurrbart
Veteran Advisor

Re: This is pretty deep stuff.

Admittedly, I didn't read the article until now.  Not sure I believe it because that isn't what I have read in the bill.  But not sure why you guys are dead set against even if what this guy's opinion is true.  It says you would be able to buy the insurance of your choice at the time you would be eligible for Medicare (I presume it would be at age 65)  Don't know since I didn't see where he really addressed that.  You are right about one thing though.  I'm just a poor ol' dumb hick from so. IL that doesn't know much, no education, worked for the gubbermint most my life.

schnurrbart
Veteran Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

Do you really think that millionaires would leave this country because they might have to pay a few % points more tax on income that living in this great country allowed them to make????  Maybe I did get my nickname by picking toys out of a cereal box but even I know better than that!

schnurrbart
Veteran Advisor

Re: Neutralizing the elderly votes to allow entitlement reform

I would agree to means testing but only if they did means testing at the time of collection also.  Why should I or anyone have to pay into something all their life only to be told they couldn't collect anything at 65?

GoredHusker
Senior Contributor

Re: Neutralizing the elderly votes to allow entitlement reform

How is a consumption tax targeting the working people?  Those big loopholes that you like to bring up all the time with regards to people buying machinery etc. and the in order to deduct wouldn't be a problem because they'd be paying the tax.  Big companies buying computers, machinery, fleets of vehicles, etc. would be paying a lot of taxes where they're getting deductions now.  If there were a consumption tax, maybe just maybe some if not a lot of the over leveraging that caused the 2008 financial meltdown would have been avoided.   

 

I don't understand why your answer is to always tax investments?  People take risks when investing.  Why should they pay insane taxes when their bet pays off?  I don't have a problem taxing gains more, but if gains are going to be taxed higher then investors should be able to deduct the entire amount of losses rather than the $3,000 annually.  If investment gains are taxed as ordinary income, then losses should be fully deducted.   

 

You hit the nail on the head with regards to SS.  When it was first implemented, there were very few who ever collected.  Hence,  why there were 52 paying in for every 1 collecting.  As lifespans grow, don't you think retirement age should grow as well?