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Reply #12


Response to Recursion (Original post)

Fri Dec 7, 2012, 06:53 PM

12. A tax trick may also be used to reduce Social Security benefits.

 

It was first used by Reagan.

Prior to Reagan, 100% of Social Security benefits paid by the Federal government were kept by the recipients.

Reagan changed the law so that 50% of the SS benefits became subject to Federal taxation when a certain threshhold was met.

So, the Federal government made SS payouts and then took some of them back.

Clinton repeated this trick. He reduced SS benefits by increasing the tax liability on such payouts so that 85% of SS benefits became subject to taxation under similiar conditions.

With Obama, it's likely that he is going to compromise with the Republicans and reduce SS benefits by further increasing the tax liability to 100% of SS benefits under similiar conditions.

In short, one hand will give while the other hand will take away. They won't take it all. But they will take more than what they have been.

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