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People who make more than me should pay more for their insurance.

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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 09:48 PM
Original message
People who make more than me should pay more for their insurance.
If I have a policy that would pay, say 100,000 dollars at my death, someone who makes ten times as much as me should pay 10 times for that same 100,000 dollar benefit.

If Bill Gates and I buy the same car, he should be paying millions for insurance, while I pay a thousand or so a year.

At least, that is what I am understanding out of the SSI cap threads.

The problem isn't so much that there is a cap, since the benefits are also capped. To me, the problem is that the government spends it just like it was a general fund. The excess we pay now is not put into any significant interest bearing account, it is spent so that our debt doesn't look so bad. Republicans do not want to pay it back. They made fun of Al Gore's lock box. The president claims that the money is gone, replaced by worthless IOUs. They want to change the way it works so somehow they can hide from the average American that they stole their money to use for something else.

We pay in, we take out (maybe). The more we pay in, the more we take out. It should work under that principle without the funny business going on.
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 09:54 PM
Response to Original message
1. Private companies are free to try to charge you as much as they want for goods and services
they're trying to sell you (and good luck trying to set a higher price for richer people).

But when the government is trying to provide a benefit to all people that is supposed to make life less miserable and more dignified, I think it makes sense to allocate the costs and benefits in a way that makes people who do better (ie, people who benefit more from the society government creates) pay a little more so that those with less can have a little more dignity and happiness.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:02 PM
Response to Reply #1
2. While I agree with a progressive income tax rate...
I consider SSI different. I believe there is a concerted effort to convince the public they are the same thing. After all, if everyone buys into that, they can just raise the income tax rate and pay people out of the general fund. That way, no one ever has to ask, "What happened to all that extra money I paid in?"

SSI was created separately, and should have remained separate. It is insurance. I think you should pay in conmensurate with your benefit.
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:14 PM
Response to Reply #2
6. I believe it was created separately so that Republicans wouldn't kill it.
That shouldn't be a reason to continue letting the burden fall so heavily on everyone but the very wealthy to insure that there aren't a lot of miserable old starving people in America.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:32 PM
Response to Reply #6
10. The burden is not falling heavily on all but the rich.
Everyone that makes at least 97k or so pays the maximum amount for the maximum benefit. Those that don't make that much pay less for a less than maximum benefit.

You pay in more than you will likely receive, and it does pay out for some that are unable to work even though they are not retirement age.

If Warren Buffet was paying the maximum on 97k a year and getting millions each month in his envelope, I could see your point. That isn't how it works.
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:35 PM
Response to Reply #10
11. The point I'm trying to make is that it's set up the way you describe so that Republicans wouldn't
kill it, and, therefore, I think it's good for people to argue that progressivity works for SSI just the same way it works for every other government service.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:40 PM
Response to Reply #11
14. Well, are you suggesting that a national health care plan should have progressive rates?
That the rich pay millions each month in their premium because I have to pay $700?

Or should everyone pay about the same amount (and a little extra to take care of those that cannot afford it/don't work)?
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:45 PM
Response to Reply #14
15. If we had a national health care, yes I do think it should be financed out of progressive taxes.
Edited on Sat Nov-17-07 10:51 PM by 1932
A person who has no income and pays no taxes should get health care and the cost of providing everyone health care she be apportioned progressively so that everyone with income to tax feels the BURDEN equally.

Why should a superwealthy person pay at a rate that is completely inconsequential to them (an amount they'd spend in a weekend on 'women and booze' to paraphrase something Ross Feingold was told by another senator about the salary Feingold made the year before he was elected) while someone else pays at a rate that represents a significant financial sacrifice>
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:07 PM
Response to Reply #15
23. We just have to disagree on that.
On some things, you should just have to pay X to get Y. I could use your argument to say that the rich should pay more for everything. Just because something is managed by the government does not mean it has to be paid for the same way. Some taxes are paid on consumption (gasoline tax, for instance) that are supposed to be targeted to a particular benefit to those consumers (highways, bridges).

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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:21 PM
Response to Reply #23
27. We're talking public sector, not private sector. When the government gives so much...
...when it creates a landscape where a few can make a killing...those people should pay back into it at a higher rate. It's the least they can do. Even Warren Buffet agrees with that.



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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:24 PM
Response to Reply #27
29. Do away with special treatment ...
...of non-wage compensation, and the rates wouldn't need to be raised. I'm of the opinion that the top marginal rate of 35% would be fine, if all income were treated equally.
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:32 PM
Response to Reply #29
34. The top rate starts so low in the range of incomes Americans receive.
Edited on Sat Nov-17-07 11:33 PM by 1932
Maybe only a small percentage of people earn at the top rate, but the there is such a huge range from the bottom of the top tier and the top of the top tier that I don't see how 35% can make sense for all those people with such different levels of wealth.

Furthermore, I think different types of income should be taxed at different rates. Income from actual work should be taxed at a lower rate than dividend and capital gains income. I go to work and work really hard and sacrifice my time and happiness at the office, and I get taxed a LOT on that income. I did almost nothing to pick a few stocks, and I'm barely taxed on dividends and cap gains on those stocks. That should be reversed.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:39 PM
Response to Reply #34
36. I favor taxing at the same rate, to start.
But if they have to be unequal, I would have to agree with you.
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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:57 PM
Response to Reply #34
39. I see your point about wages v. dividends...
...but I still disagree that they should be taxed at a different rate. If the idea is that the burden based on ability to pay, it shouldn't matter how you got to that level, or ability to pay - the fact is, you're there, and you should be taxed accordingly.
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1932 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-18-07 01:32 AM
Response to Reply #39
40. The point is that we can't overburden activity that is productive for society.
Investing is important. But work is more important.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:36 PM
Response to Reply #27
35. Income tax is that way. Not everything has to be. SSI isn't. nt
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DURHAM D Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:07 PM
Response to Original message
3. Do you have any idea what the benefit cap is??
I tried to look it up a couple days ago and could not find it.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:10 PM
Response to Reply #3
4. I found a 2003 table.. it was about $1750/month. nt
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zalinda Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:14 PM
Response to Original message
5. First of all, Social Security was never intended to be a
"savings account". It was called Social Security Insurance for a reason, you paid in and after you retired you got a percentage of what you paid in. But, it was put in place because things happen to people and when they get old or disabled, and can't work, they have to live on something. It really should be means tested. If your income is more than x amount, you shouldn't be able to receive SSI.

After all think of all the other insurance plans that you buy into. When you no longer drive, does the car insurance company give you back all the money you've paid into the system? How about home owners insurance, when you sell your home and move in with your family, do they give you back all the money you've paid in for you house to be insured? And medical insurance, what if you find you have a terminal illness which requires no medical treatment, would you get your money back?

Social Security Insurance was developed to keep people from being homeless and going to the poor house to die (and yes, there was such a place a poor houses). You were supposed to pay into it so you would at least have a roof over your head and food in your stomach. You see, poor people have been around for a long time, and they could not save money for retirement. How it ever became an entitlement program is beyond me.

zalinda
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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:20 PM
Response to Reply #5
7. The quickest way to turn the American public against SS...
...is to do as you've suggested, and change it from what is was created as (an entitlement program) into a welfare program. One of the reasons it is so popular is because everyone realizes that they get a payback for what they put in. Turn it into a welfare system, and popular support will rapidly erode.

FDR didn't set it up to be means tested, and I think he was right to do so.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:23 PM
Response to Reply #5
8. That is my point...
by treating (and calling) it an entitlement program other than that which it really is, they do not have to account for the billions (trillions) they have misappropriated to other uses.

Your analogies are a good argument for means testing. I am not saying that is the answer, there are other insurances where you get the benefit at some time (life insurance).

All I am saying is that by treating it like it is the government's responsibility to take care of everyone after they reach retirement age is a shell game. It is like Worker's Comp. *Worker's* pay that in, we just trust the government to manage the fund in a not-for-profit maner.
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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:36 PM
Response to Reply #8
12. It is an entitlement program...
...in that if you've paid in (not including disability here, just the vanilla retirement benefit), you're entitled to a payout. Tell people that they have to pay in, but that they may or may not get a benefit, and I believe that you'll see popular support for SS go down the tubes rapidly.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:47 PM
Response to Reply #12
17. You are right. My misuse of the term.
I meant something along the lines of welfare, exactly as you say... you pay in, but may never get a benefit. I don't know what the distinction is between the way SSI works and other entitlements, but I used the wrong term. They are all entitlements.

I agree with you. SSN will probably cease to exist if it is allowed to be put in that category.

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:54 PM
Response to Reply #17
19. No worries! n/t
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Basileus Basileon Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:24 PM
Response to Original message
9. So if you find the no-cap to be no problem,
Edited on Sat Nov-17-07 10:24 PM by Basileus Basileon
do you believe we should simply move to a flat tax?
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:37 PM
Response to Reply #9
13. No, as I posted previously I am in favor of a progressive income tax.
I just object to the fact that I have paid into an gov't-managed not-for-profit insurance fund for xx years being treated like it was some sort of government handout. Throwing it in the same bucket, and treating it in the same manner as income tax is a way to make it become permanently considered a handout.

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:53 PM
Response to Reply #13
18. I'm in favor of a progressive income tax...
...but where that currently breaks down is in the way capital gains and other "non-wage" income is treated differently. To me, the current marginal rates are fine, it's the fact that non-wage income is given such preferential treatment that screws up the progressivity of the income tax.

For SS, I have no problem with the current flat rate, so long as benefits remained capped. However, if the income cap is lifted, then I think the benefit cap should be as well.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:57 PM
Response to Reply #18
21. I agree completely. Particularly on the non-wage income. nt
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:55 PM
Response to Reply #9
20. Actually, since you asked... I support a simplier tax system.
I think you should pay bracketed taxes. Not X percent on your total gross income. No one pays anything for their first 25k or so. They pay a small rate on everything over 25k and less than 50k. At 50k, the rate starts going up, and goes up the same amount for everyone.

The difference between what I would like and what is in existance now is that no one pays on the first 25k. Everyone pays the same rate on the next 25k. Everyone pays the same rate for money that you start earning when you reach that plateau, etc.

Let's say that every dollar you earn over a million is taxed at 50%.

The advantage here is that the calculation is simple, and there is no big savings if you can just shave enough off of your income to get in a lower bracket.



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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 10:59 PM
Response to Reply #20
22. That's basically the system we have now...
...except that there is tax on the first dollar of income (10%).

Our top marginal rate is 28%, but our effective rate hovers at 15%-16%.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:09 PM
Response to Reply #22
24. Then why the big tables?
I thought everything from dollar one was taxed based on your total income. Where did I get that from?

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:11 PM
Response to Reply #24
25. The big tables ...
..."do the math", so to speak, and give you the final number for that income. This link http://www.irs.gov/formspubs/article/0,,id=164272,00.ht... gives an actual breakdown of the marginal brackets.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:18 PM
Response to Reply #25
26. Cool!
So 35% is the top rate. With CEOs of the megacorporations, the table ends too soon.

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:22 PM
Response to Reply #26
28. I'm not sure I agree
If the entire income from all sources, including stock options, dividends, capital gains, etc., would be taxed at the top marginal rate of 35%, I would be fine with it. But when deferred compensation is part of the annual "salary", and that income receives special tax treatment, such as a 15% rate, then I have a problem with it.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:27 PM
Response to Reply #28
30. Who knows, until all income is taxed in the same way
just how much it will take to get us out of debt in a reasonable time and operate the government.

Thanks for the income tax education.

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:28 PM
Response to Reply #30
32. No problem!
I'm big into studying the income tax - I don't believe what anyone tells me, from either party, when it comes to taxes. Too much propaganda on both sides. I like to sit down and look at the numbers myself, to see which party is being the most truthful.
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Rabo Karabekian Donating Member (242 posts) Send PM | Profile | Ignore Sat Nov-17-07 10:45 PM
Response to Original message
16. Sliding Scale World
I like this idea, it goes beyond progressive taxation. I really think in society that everything should be sliding scale, based upon economic need. This could be a way to have capitalism one day, and a brand of socialism the next.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:27 PM
Response to Original message
31. FICA is a flat tax, a flat premium
The same percentage of income for everybody. I'd be for a flat benefit, if that would make you feel better. $2,000 a person for everyone over 65.

deal?

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FLDCVADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:30 PM
Response to Reply #31
33. Speaking *only* for myself...
...nope, no deal on that. I believe that would spell the end of support for Social Security by the public at large.
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MADem Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:40 PM
Response to Original message
37. Why would they even bother to get insurance, then?
Hell, bank your 'premium payment' for a few years, rather than pay those prices.

Life insurance and social security aren't in the same boat.

And why would anyone pay more than the car is worth for insurance, when they can pay out any needed payment in the event of accident out of their savings?

See, you're DEAD when life insurance pays out. You aren't dead when SS does.

I like Al Gore's LOCKBOX myself. Always did. He was right.
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Ravy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 11:50 PM
Response to Reply #37
38. I couldn't think of a better analogy, but dead or alive...
some are suggesting that others pay *millions* each month over a number of years to get $1,800 a month after they reach 65.

That doesn't seem fair. I can fully support justify a progressive income tax, but not for Social Security.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-18-07 02:44 AM
Response to Reply #37
41. Old Age, Disability and Survivors
It's not a retirement plan. It's insurance in the event you cannot work.
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