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Sat Nov 17, 2012, 12:33 PM

 

The Savings to Social Security from Means Testing = Higher Costs

The report, “The Potential Savings to Social Security from Means Testing,” first describes the distribution of Social Security benefits by income level. The authors then look at the effects of phasing out benefits at rates of 10 and 20 percent of every dollar of non-Social Security income above $40,000 or $100,000 and find little in the way of potential savings to Social Security. The savings are even less when behavioral responses in the form of tax avoidance or tax evasion are factored in, since a means test would effectively be an increase in the marginal tax rate for wealthier seniors.

The data show that over 75 percent of social security benefits go to individuals with non-Social Security income of less than $20,000 and 90 percent goes to those with non-Social Security income of less than $40,000 a year as of 2009.

If means testing that phased out benefits at 10 percent were applied to those who make $100,000 a year and assuming no change in behavior, it would only save Social Security 0.74 percent of its outlays. At a 20 percent rate, this would only yield savings equal to1.33 percent of costs. If the phase out were dropped down to $40,000, hardly wealthy by any standard, the overall savings would just be 2.77 percent of costs at the 10 percent rate and only 4.65 percent of costs at the 20 percent rate. Accounting for behavioral responses would lead to even smaller savings, could cut these potential savings by half or more.

Mean testing would also raise the cost of the program. The retirement program currently has very low costs. If the administrative expenses rose to the level of the disability portion of the Social Security program, the higher costs would likely exceed any savings from a means test.

http://www.cepr.net/index.php/press-releases/press-releases/is-means-testing-an-effective-way-to-reduce-the-cost-of-social-security

67 replies, 4031 views

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Arrow 67 replies Author Time Post
Reply The Savings to Social Security from Means Testing = Higher Costs (Original post)
HiPointDem Nov 2012 OP
dawg Nov 2012 #1
HiPointDem Nov 2012 #2
RC Nov 2012 #4
Jeff In Milwaukee Nov 2012 #12
HiPointDem Nov 2012 #19
Jeff In Milwaukee Nov 2012 #31
HiPointDem Nov 2012 #39
Jeff In Milwaukee Nov 2012 #57
HiPointDem Nov 2012 #59
Jeff In Milwaukee Nov 2012 #60
HiPointDem Nov 2012 #62
Jeff In Milwaukee Nov 2012 #63
HiPointDem Nov 2012 #64
FogerRox Nov 2012 #40
StatGirl Nov 2012 #30
Jeff In Milwaukee Nov 2012 #33
FogerRox Nov 2012 #42
Jeff In Milwaukee Nov 2012 #56
David Zephyr Nov 2012 #50
David Zephyr Nov 2012 #49
JVS Nov 2012 #61
Sekhmets Daughter Nov 2012 #3
HiPointDem Nov 2012 #5
Sekhmets Daughter Nov 2012 #7
HiPointDem Nov 2012 #8
Sekhmets Daughter Nov 2012 #13
HiPointDem Nov 2012 #14
Sekhmets Daughter Nov 2012 #18
HiPointDem Nov 2012 #20
Sekhmets Daughter Nov 2012 #27
HiPointDem Nov 2012 #35
Sekhmets Daughter Nov 2012 #37
HiPointDem Nov 2012 #38
FogerRox Nov 2012 #47
FogerRox Nov 2012 #48
Live and Learn Nov 2012 #10
Sekhmets Daughter Nov 2012 #24
customerserviceguy Nov 2012 #55
Live and Learn Nov 2012 #6
Sekhmets Daughter Nov 2012 #9
Live and Learn Nov 2012 #11
Sekhmets Daughter Nov 2012 #17
Live and Learn Nov 2012 #22
Sekhmets Daughter Nov 2012 #25
HiPointDem Nov 2012 #16
Live and Learn Nov 2012 #23
Sekhmets Daughter Nov 2012 #26
David Zephyr Nov 2012 #52
FogerRox Nov 2012 #43
leftstreet Nov 2012 #15
Cleita Nov 2012 #21
woo me with science Nov 2012 #28
FogerRox Nov 2012 #44
Hamlette Nov 2012 #29
FogerRox Nov 2012 #46
customerserviceguy Nov 2012 #54
FogerRox Nov 2012 #65
customerserviceguy Nov 2012 #67
pansypoo53219 Nov 2012 #32
FogerRox Nov 2012 #45
SunSeeker Nov 2012 #34
eyewall Nov 2012 #36
HiPointDem Nov 2012 #41
FogerRox Nov 2012 #51
customerserviceguy Nov 2012 #53
mainer Nov 2012 #58
amborin Nov 2012 #66

Response to HiPointDem (Original post)

Sat Nov 17, 2012, 12:36 PM

1. Means-testing is just a cynical ploy to undermine political support for the program ...

as a whole. A first step in the elimination or privatization of the whole enchilada. (And it was a very good enchilada - I'd hate to see it go.)

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Response to dawg (Reply #1)

Sat Nov 17, 2012, 12:38 PM

2. I agree. Disturbing to see so many democrats here at DU pushing it.

 

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Response to HiPointDem (Reply #2)

Sat Nov 17, 2012, 12:46 PM

4. Maybe too many Democrats and

 

not enough Liberals and Progressives?

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Response to RC (Reply #4)

Sat Nov 17, 2012, 01:26 PM

12. So if I'm sitting on a multi-million dollar investment portfolio

and receiving a six-figure income from those investments, should I be able to collect Social Security when I retire?

Remember that we already (sort of) means test Social Security by allowing a single person w/ less that $25K income to not pay taxes on their benefits, and then have a sliding scale under which up to 85% of the benefits are taxable.

Would you be opposed to raising the taxable amount (and the tax rate) on those seniors who are (frankly) fabulously wealthy and clearly not in need of Social Security benefits? I'm talking about the elderly one-percenters. Nobody else.

Note: Donald Trump is old enough to collect Social Security.

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Response to Jeff In Milwaukee (Reply #12)

Sat Nov 17, 2012, 01:44 PM

19. only wage income gives you social security eligibility, not capital income. so your

 

scenario about sitting on an investment & collecting income has nothing to do with social security.

donald trump isn't likely to collect either, unless he paid himself a salary. and if he paid in, who cares if he collects his lousy $2000 a month. with his lousy investments he probably needs it.

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Response to HiPointDem (Reply #19)

Sat Nov 17, 2012, 02:44 PM

31. Not correct...

To determine your base income for the purposes of calculating Social Security tax, all world-wide income is included, including income that is otherwise non-taxable. It's not just wages from salary.

Check Here

Now Donald Trump's Social Security benefit would be tied to his wages, but that would include wages from "Self- Employment" and I assume that somewhere in Donald's tangled web of finances, he was some type of self-employment income (from things like speakers fees of whatever the hell NBC is throwing down the rathole for his show).

Your benefit and the taxability of your benefit are two different issues.

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Response to Jeff In Milwaukee (Reply #31)

Sun Nov 18, 2012, 10:04 PM

39. Only wage income is subject to SS tax. If donald trump pays himself a wage, it's

 

subject to SS taxes, just as though he were paying YOU a wage.

But his capital income is not, nor is it included somewhere in the calculation of SS taxes.

That's just complete misinformation.

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Response to HiPointDem (Reply #39)

Mon Nov 19, 2012, 09:32 AM

57. We might be talking about two different things.

Let's assume (and I have no idea that this is true) that Trump has set up an LLC or Sole Proprietorship to deal with his income from books, speaking fees, and television appearances. That is ordinary income and it counts toward his eventual Social Security benefit (passive income such as interest and dividends do not). He would be paying Self-Employment Tax, which is basically Social Security taxes for persons who are self-employed.

When The Donald retires, the taxability of his Social Security benefit depends on all income -- everything. So if and when he collects Social Security, he would be paying tax on 85% of his benefit at whatever rate he pays for other ordinary income. The amount of the benefit and the extent to which it is taxable are two entirely different calculations.

What I'm suggesting is that if you're The Donald and collecting Social Security in retirement, the ENTIRE amount should be taxable and it should be taxed at a higher rate. And I wouldn't be opposed to saying that if you income is above a certain level -- and again I'm talking about people who are massively wealthy, not an elderly retiree living on Social Security and little else -- there should be no benefits at all.

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Response to Jeff In Milwaukee (Reply #57)

Mon Nov 19, 2012, 09:57 AM

59. only if trump has himself as employee of that llc and is paying social security tax

 

on the wage he pays himself (both employee and employer portions), as you say.

all he collects is the same $2000 or so a month that someone making $90-100K a year collects, and 85% of it is taxable -- i forget what the top rate is, but let's say then that it's 30%. so he collects $1400 a month.

the downside of making all SS income taxable isn't worth the pittance of the upside. the 'savings' would be a fraction of 1%, i believe.

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Response to HiPointDem (Reply #59)

Mon Nov 19, 2012, 10:01 AM

60. LLC's are typically treated as sole proprietors (Schedule C)

But I suspect Trumps LLC is probably registered in Grand Cayman or something like that. For normal people, it would be self-employment with Self-Employment Taxes paid.

And I agree that you wouldn't collect a fortune on the taxes -- it's really more of a symbolic thing. But it also raises the question as to why people who have no financial need are allowed to collect from a program designed to prevent financial need.

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Response to Jeff In Milwaukee (Reply #60)

Mon Nov 19, 2012, 10:12 AM

62. because it's a universal system, and as such, was not designed *only* to keep

 

people from financial need (however defined).

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Response to HiPointDem (Reply #62)

Mon Nov 19, 2012, 11:05 AM

63. From FDR's signing statement...

We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.


The intent was not to provide payments to all persons, but rather to those who were at risk of povery in the old age. Furthermore, I'm not one of those "original intent" types who think we should slavishly follow the dictates of some long-dead politician or Supreme Court Justice. Does it make sense -- here and now -- for Social Security to make payments to people who clearly do not require financial assistance from the government? For the same reason that we shouldn't be giving tax breaks to corporations, does it make sense to make financial payments to a retired CEO?

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Response to Jeff In Milwaukee (Reply #63)

Mon Nov 19, 2012, 11:29 AM

64. It clearly was set up to provide payments to all persons who paid in, because that

 

was the design of the plan he signed, and that's how it worked from day one.

I'm one of those persons who likes to keep something that works better than the alternative being proposed.

As you said, there's no actual financial benefit to doing what you propose, either.

So it's all downside: decreasing the universality of the program, which is the one thing that's kept it intact all these years.

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Response to Jeff In Milwaukee (Reply #31)

Sun Nov 18, 2012, 10:09 PM

40. HiPoint is talking about FICA

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Response to Jeff In Milwaukee (Reply #12)

Sat Nov 17, 2012, 02:39 PM

30. Yes.

If you paid in, you get your money. That's the deal. Otherwise, it's welfare.

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Response to StatGirl (Reply #30)

Sat Nov 17, 2012, 02:54 PM

33. I look at it a different way...

I think of Social Security more like insurance against poverty in old age.

If you have the personal resources to live above a certain financial threshold in retirement, then you don't collect. If you don't have those resources -- or if you're widowed or orphaned for disabled at some point in your lifetime, then you're covered.

I don' t see why rich people should collect Social Security on demand any more than I should be able to collect from my car insurance even though I never had a claim or accident.

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Response to Jeff In Milwaukee (Reply #33)

Sun Nov 18, 2012, 10:12 PM

42. If you purchase retirement insurance, when you retire you get a benefit payment

regardless of the analogy you used.

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Response to FogerRox (Reply #42)

Mon Nov 19, 2012, 09:26 AM

56. It's not insurance against retirement, it's insurance against been POOR in retirement...

Not to put too fine a point on it, but the techincal name for "Social Security" is the Old Age & Survivors Insurance Trust Fund. It's insurance -- not a retirement plan.

Thinking of it as a retirement plan plays right into the conservative meme that we should "privatize" Social Security because we can get a better investment from individual retirement accounts.

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Response to HiPointDem (Reply #2)

Sun Nov 18, 2012, 10:35 PM

50. Yes. Very disturbing.

FDR would have none of this. Thanks for weighing in on the side of sanity.

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Response to dawg (Reply #1)

Sun Nov 18, 2012, 10:33 PM

49. FDR would go ballistic over this.

The moment they touch this (means testing), they will be putting the poison pill to Social Security. Seriously bad.

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Response to dawg (Reply #1)

Mon Nov 19, 2012, 10:02 AM

61. I disagree. I'm taking the fact that people are seriously suggesting means-testing...

as an indicator that the intended bar will be set so low that there will be significant savings. Something along the lines of direct cut-off for anyone who is able to have income of 20k or more. Or since retirees are generally low-income but higher assets (i.e. savings, home), they might means-test for a quantity of savings and only provide a benefit after those assets have been consumed. So if a 67 year old retires with $80,000 in savings and a home worth $150,000 they might be told that they can start collecting benefits when their total assets are worth under $40,000. I'm taking their talk of means-testing as an indicator that they plan on cutting deep because if they don't cut deep it won't lower costs much.

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 12:44 PM

3. Frankly,

I think the only real way to preserve Social Security is to raise the minimum wage to a living wage, while making it impossible for corporations to outsource their jobs.

Many people suggest the contribution caps should be removed or at least raised....I think if you do that our "oh-so beleaguered" corporations will make more and more employees independent contractors who will find themselves paying the full 15.30% of the payroll tax. We have a tendency to only think of the employees contributions, but the corporations contribute as well. As they have long shown themselves to be disinterested in both their employees and the rest of the nation as a whole, I think we can expect the unintended consequences would be brutal.

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Response to Sekhmets Daughter (Reply #3)

Sat Nov 17, 2012, 12:51 PM

5. the corporate contribution is figured as part of total employee compensation &

 

the corporations get a tax deduction for it.

i'm inclined to doubt your scenario as the higher cap would only affect a small proportion of employees -- who are already having SS taken from their checks, justs in lesser amounts. So not sure why a higher cap would set off an epidemic of contractor-making.

I am in favor of a cap covering 90% of wages, as per the original design.

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Response to HiPointDem (Reply #5)

Sat Nov 17, 2012, 01:04 PM

7. A short term fix at best....

Here's why:

http://www.forbes.com/sites/joelkotkin/2012/07/25/the-rise-of-the-1099-economy-more-americans-are-becoming-their-own-bosses/

Don't you know anyone who has been turned into a "consultant" to the same company that once employed them? The tech industry comes to mind.

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Response to Sekhmets Daughter (Reply #7)

Sat Nov 17, 2012, 01:09 PM

8. of course i do. but it has little to do with social security per se.

 

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Response to HiPointDem (Reply #8)

Sat Nov 17, 2012, 01:35 PM

13. It has everything to do with social security....

What do you think will happen when fully 30% of the work force is self-employed and paying 15.30% on 90% of their income? They will start screaming to be let off the hook...

The entire problem with SS is that for too long too few people have been earning good wages.

http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph


One chart has a header explanations that makes it quite clear. Had household incomes kept pace with the economy since 1970, the median household income would be $92K, not $50K....Think about all that money not paid into SS

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Response to Sekhmets Daughter (Reply #13)

Sat Nov 17, 2012, 01:38 PM

14. i agree that the problem is wages. i disagree that social security avoidance is the primary

 

impetus behind the use of contractors.

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Response to HiPointDem (Reply #14)

Sat Nov 17, 2012, 01:43 PM

18. Never said it was primary....just one more excuse

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Response to Sekhmets Daughter (Reply #18)

Sat Nov 17, 2012, 01:45 PM

20. it's an insignificant distraction

 

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Response to HiPointDem (Reply #20)

Sat Nov 17, 2012, 01:59 PM

27. You are, of course, entitled to your own opinion....

I think raising or removing the cap will have long term negative results....

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Response to Sekhmets Daughter (Reply #27)

Sat Nov 17, 2012, 03:22 PM

35. raising the cap to its original/traditional 90% is fine by me.

 

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Response to HiPointDem (Reply #35)

Sat Nov 17, 2012, 03:37 PM

37. 90% was not the original cap, btw.

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.


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Response to Sekhmets Daughter (Reply #37)

Sat Nov 17, 2012, 04:06 PM

38. actually, it was.

 

The Taxable Earnings Base Over Time

The portion of Social Security covered earnings that are subject to the payroll tax has fluctuated over time (Figure 1). When the program began in 1937, taxable earnings represented 92% of covered earnings (Table A-1).

By 1965, this ratio had dropped to its low of 71%. Prior to 1972, the taxable earnings base was updated periodically by Congress, which contributed to its dramatic
fluctuations in the 1950s and 1960s.


https://docs.google.com/viewer?a=v&q=cache:GbSbSfBDtO4J:aging.senate.gov/crs/ss9.pdf+social+security+percent+of+earnings+below+the+cap+1940+1950&hl=en&gl=us&pid=bl&srcid=ADGEESjg9dYnJjkGw6ylDGo44uRMcOv_fBsY-ZXcWjNnA427UZYVFpLlFFJzkTR0n-FRNkMaxA8hAzzFzAn6GuLbz674mjFy2tOEyqVIqaotaeCK50h7KXRFgoKuO36_SMSb5Lb40lTF&sig=AHIEtbTbEIX43tWEm5Pm21m1PeqvbGtyew

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Response to Sekhmets Daughter (Reply #37)

Sun Nov 18, 2012, 10:28 PM

47. Except it didnt

Greenspan did not anticipate the rate of increase in income disparity, so $110,100 is at about the 84%tile, 186,000 is at about the 90th%tile.

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Response to Sekhmets Daughter (Reply #13)

Sun Nov 18, 2012, 10:33 PM

48. Who pays 15.3%, there are deductions for that silly, get with the program

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Response to Sekhmets Daughter (Reply #7)

Sat Nov 17, 2012, 01:18 PM

10. I think Forbes is behind the times on this.

Turning consultant, earning big bucks and investing it in the roaring stock market was a big trend, especially for IT, during the 90s when everything. Today most of those consultants are attempting to find secure jobs.

The upturn is only due to all the employees laid off that have had no choice but to turn to consulting and taking the odd, short term projects they can find. My brother, in the Phoenix area, is one of those and trust me the endless cycle of interviewing and waiting to be hired for these short term assignments is tortuous. Most of these consultants now long for secure, full time employment with benefits.

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Response to Live and Learn (Reply #10)

Sat Nov 17, 2012, 01:50 PM

24. Of course they do....

But will they find it? I think that's the question we need answered.

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Response to HiPointDem (Reply #5)

Sun Nov 18, 2012, 11:48 PM

55. Why not remove the cap from the employer's side of FICA?

If a megabank wants to pay some idiot $10 million a year to run the place into the ground, wouldn't it be a good idea for them to pay FICA tax on the whole ten million? Cap the employee share, so that the CEO doesn't get a raised maximum benefit, but if his employer thinks he's worth that much, maybe they need to put up some payroll taxes to back that up.

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Response to Sekhmets Daughter (Reply #3)

Sat Nov 17, 2012, 12:54 PM

6. If a corporation can't afford its employees

it has no business being in business.

I am all for raising the minimum wage, penalizing corporations for outsourcing and in_sourcing and raising the cap. The next generation will need all of this to ensure SS is still around and viable for them.

I am totally against means testing. Anyone that pays in is entitled to receive their benefits.

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Response to Live and Learn (Reply #6)

Sat Nov 17, 2012, 01:12 PM

9. They can afford it, that is not the issue.

Hell at the prices it charges, Apple can well afford to make its gadgets right here. It's all about the profit margin and share prices...always has been. Corporations will use the excuse of "higher taxes" to turn more employees into 1099 independent contractors....it also relieves them of the burden of health insurance and for those who still make contributions, 401Ks. Just look at what corporations have been doing for the past 30 years. It is not all about outsourcing.

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Response to Sekhmets Daughter (Reply #9)

Sat Nov 17, 2012, 01:23 PM

11. Corporations do so at their own risk.

Hiring independent contractors is not a great way to run a company. When they leave, they take their knowledge with them. I have had great experience in the mess contracted It workers leave behind. They don't understand the business and in efforts to meet their deadlines and take the money and run, documentation is sparse and shortcuts are taken. They leave a tangled web of a mess that the corporation will spend even more to undo when they are gone.

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Response to Live and Learn (Reply #11)

Sat Nov 17, 2012, 01:42 PM

17. They've been doing it for years....

In 2004 I wrote a mortgage for a man who had worked for GE for 22 years. They gave him a choice between becoming an independent contractor or being unemployed. He became an independent contractor, working a minimum of 40 hours a week for GE....

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Response to Sekhmets Daughter (Reply #17)

Sat Nov 17, 2012, 01:49 PM

22. That is my point. He didn't really choose to become an independent contractor

he was forced in to it. But these forced independent contractors are not happy and are turning away from the GOP.

We need to tighten the rules and enforce the regulations for hiring independent contractors. As a case in point, the man you referenced is probably being called a contractor illegally.

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Response to Live and Learn (Reply #22)

Sat Nov 17, 2012, 01:54 PM

25. For whom he votes is not the discussion....

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Response to Sekhmets Daughter (Reply #9)

Sat Nov 17, 2012, 01:41 PM

16. all those things you mention are tax deductions to employers.

 

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Response to HiPointDem (Reply #16)

Sat Nov 17, 2012, 01:50 PM

23. I'm not sure screwing up your business is really worth a tax deduction.

Last edited Sat Nov 17, 2012, 02:21 PM - Edit history (1)

edited to add: oops sorry thought you were addressing my post. No wonder I was confused by your assertion. lol

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Response to HiPointDem (Reply #16)

Sat Nov 17, 2012, 01:57 PM

26. With all those wonderful

tax breaks, why are there so many people working without benefit? No health insurance, no retirement plan or if there is a 401K the employer does not contribute to it?

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Response to Live and Learn (Reply #6)

Sun Nov 18, 2012, 10:41 PM

52. Yep.

This is the poison pill that will kill Social Security. Roosevelt knew this. Liberals should ask themselves why the Bush Cabal and the uber-rich always push this. It's the rug under everyone's feet. Means testing SS will be the beginning of its end. Progressives should not walk that plank.

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Response to Sekhmets Daughter (Reply #3)

Sun Nov 18, 2012, 10:17 PM

43. You hit the nail on the head

The SS trustees tell us widespread job creation and wage growth (fixing the economy) can get us past 2062, when the Boomers are dead. Then assests grow thru 2090.

In the low cost scenario SS is good thru 2090. TO think SS will go broke in 2037 is to believe we'll have 25 more years of recession.

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 01:39 PM

15. DURec

Interesting article

Thanks for posting this

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 01:49 PM

21. Means testing will only make those of means complain that they aren't

getting what is due to them causing the program to become further eroded and maybe even destroying it in the end. This meme is nothing but a red herring. SS has a surplus of 2+ trillion and will be able to pay full benefits for decades in the future. There is no need to means test.

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 02:02 PM

28. What is notable is the constant need to refute

right-wing "solutions" for a problem that doesn't exist.

SS is solvent. Raising the cap and increasing benefits would make it even better. This crap is being discussed only because thieves run our media and our government.

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Response to woo me with science (Reply #28)

Sun Nov 18, 2012, 10:20 PM

44. Fix the economy, create jobs. Fixes SS.

Currently the income CAP is at $110,100, about the 84th percentile. That has fallen from 90%, which is about 186,000.

Adjust the cap to 90% where it used to be, fix the economy, and tell Chicken Little to STFU.

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 02:29 PM

29. I've been saying this for years

I work at the state "welfare" and unemployment office. The costs associated with "means testing" for the "welfare" division are quite high. We don't means test unemployment so far fewer employees etc and hence much lower cost to administer.

Additionally, social security is not in as bad a shape as "they" say. The figures we use to project solvency had been shown to be too conservative. There is a book about it, I can find the name if anyone wants.

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Response to Hamlette (Reply #29)

Sun Nov 18, 2012, 10:23 PM

46. to believe SS will go broke in 2037 you have to believe

we'll have 25 more years of recession.

I know of no economists predicting another 25 years of recession.

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Response to FogerRox (Reply #46)

Sun Nov 18, 2012, 11:43 PM

54. Your figure is old news

Even the Social Security Trustees say that full benefits will only last until 2033:

http://www.ssa.gov/oact/trsum/index.html

That's only twenty years away.

But, we don't need a recession, all we need is a decreasing number of people paying in (at lowered wages) and an increasing number of recipients as the baby boom hits the system heavily over the next couple of decades, and it will effectively be a recession as far as FICA taxes are concerned.

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Response to customerserviceguy (Reply #54)

Mon Nov 19, 2012, 11:53 AM

65. That is one of 4 scenarios the Trustees publish each year

In the low cost scenario, the Trust fund is not depleted thru 2090.

Why do you pick the scenario that requires 20 years of recession?... requires 20 years of record low growth?

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Response to FogerRox (Reply #65)

Mon Nov 19, 2012, 06:57 PM

67. Which makes my point

When you try to project anything beyond even a few years, its all garbage in, garbage out. Name any mutual fund that can do significantly better than the broad averages year after year, and maybe I'll believe that someone can make reliable long term predictions, even though their own jobs don't depend on it.

I see McJobs as the new normal, we just won't return to the high-paying manufacturing jobs that propelled the economy in the post WWII era. The recessions were brief, and after the temporary economic disruptions were over (or adjusted to), the economy was able to get back to normal again.

The retirements of the baby boomers are a much longer effect than any oil price shocks, or other sort of financial trouble we've ever faced. That wave has started washing up on the beaches of our financial future, and it shows no sign of abating any time soon.

Check out this post of mine:

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=1839696

It's hard to argue with the numbers.

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 02:51 PM

32. eliminate the top limit to fica tax.

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Response to pansypoo53219 (Reply #32)

Sun Nov 18, 2012, 10:21 PM

45. Adjust back to 90%, no reason to eliminate the income CAP

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 03:17 PM

34. There you go using math and reason again! nt

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Response to HiPointDem (Original post)

Sat Nov 17, 2012, 03:31 PM

36. Means Testing is to SS what Tort Reform is to Health Care costs.

A smokescreen that offers no real solution to anything.

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Response to eyewall (Reply #36)

Sun Nov 18, 2012, 10:10 PM

41. +1. (though it offers a solution to something for corporations)

 

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Response to HiPointDem (Original post)

Sun Nov 18, 2012, 10:36 PM

51. Excellent fact filled article, with top flight citations

KnR

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Response to HiPointDem (Original post)

Sun Nov 18, 2012, 11:38 PM

53. You're right in that means testing is expensive

But we do it anyway, only through the income tax system.

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Response to HiPointDem (Original post)

Mon Nov 19, 2012, 09:43 AM

58. Those above a certain income will just get taxed on it

Easiest way to deal with it. If you make so much money you don't need it, then you'll just pay it back as taxes.

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Response to HiPointDem (Original post)

Mon Nov 19, 2012, 12:05 PM

66. means testing is a BAD idea:

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