12.8% of $128,000 is a lot of money. And the return on your investment sucks. And then Uncle Sam wants to tax SS again. What is so hard to understand?
And the blessing of living in and doing business in the USA is an amazing thing, well worth the extension of paying SS taxes on income above that threshold. It is a lot of money, but that just means that my parents go on 1 or 2 less ridiculous nudey-yacht vacations per year.
That is some pretty high premiums to pay into a supposedly insurance program that you may get mean tested out when you get to a point to collect the payout. I am ok with removing the cap, but lets not keep pretending that this is a retirement insurance program.
Simple: Your tax money goes in and then when they give it back they can get taxed 'again'. There was a time when SS benefits weren't taxed.
If you don't like Social Security, that's a valid opinion shared by 10s and 10s of thoughtful people. @Daqip was asking why there was a cutoff on SS taxes at $128,000. If you want to tackle that idea, I'd be curious to hear it, for real. If not, and you just want to obfuscate some more, as is your wont, then I'll assume you are just rehashing conservative talking points from the 1960s.
It is not that I don't like SS, I just don't think it is very good at either of two goals it promises.... a mandatory retirement program and a social disability insurance program. I wish people like you understood the premise FDR put down when he started the program. Then you might understand why simply lifting the cap isn't the simple answer. If you want to discuss it you'll have to wait until tomorrow. It is late here on the east coast.
Why did I check "ignored content" in this thread? Simple: of course, it is not "taxed" when it goes in, as it is the tax on gross income. Your "tax money" (as you call it) goes in because that is how taxation work. When we want to invest in anything, we have to put money into it in order to pay for it. That is how taxation works. Well, it was not taxed the first time (as it is tax), so it cannot be taxed "again." It is not like the sales tax, the gas tax, the utility taxes or any of the myriad of other taxes we pay on goods and services. Those things are "taxed" on our after tax income. Those may be considered "double taxation." Social Security is not and cannot be so considered, since it is simply not the case. That really started with St. Reagan in 1983 and the 1983 Amendments to Social Security. Oh, those goddamned tax and spend fiscal conservative Republicans. And for the large majority of Social Security recipients, that time is NOW. There is no federal income tax on Social Security payments, at least not on the first $25,000 of "combined income" for single people and $37,000 for married couples filing jointly. "Combined income" means HALF of Social Security, taxable interest, and any additional income you receive. If the combined income is more than $34,000 for a single person, then up to 85% of Social Security may be subject to the tax. In almost no instance (other than, perhaps, married couples filing separately) is 100% Social Security subject to income tax. So, your general premise is simply false. The maximum Social Security payment is $2,687 per month. The average monthly Social Security payment is $1,342.00 per month. It can be higher if you delay retirement until 70, but 98% of people do not do that. For people living on just Social Security (43% of single recipients live on Social Security to the tune of at least 90% of their monthly revenue), it is highly unlikely that any Social Security will be federally taxed. Oh, and only 13 states tax Social Security payments. The states that tax Social Security benefits are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia. So, other than being almost completely wrong in everything you say, we agree with you, little fishy. Back to ignore with you. P.S., for your reading pleasure, I provide the following links (also, where I received most of the stats above, note there are slight variations in the "average" Social Security amounts between various sources): https://faq.ssa.gov/link/portal/340.../must-i-pay-taxes-on-social-security-benefits https://www.ssa.gov/policy/docs/statcomps/supplement/2016/5a.html#table5.a1.1 http://time.com/money/4644332/maximum-social-security-benefit-2017/ https://www.investopedia.com/ask/an...al-security-benefits-taxable-after-age-62.asp https://www.ssa.gov/history/taxationofbenefits.html https://www.washingtonpost.com/news...social-security-alone/?utm_term=.ef417a8544ba
Saying it is not very good about either of the two goals it promises seems to be the very definition of not liking something. I do fully understand the premise FDR put down...and that premise has changed over time. People are living longer. People are less likely to be in organized labor. People are less likely to have employer sponsored retirement. It depends on the question. If the question is: "How can we easily create stability in Social Security and make certain that it is funded indefinitely?" Lifting the cap is the simple, and correct, answer. If the question is: "How many flavors of ice cream can someone cram up their butt?" Lifting the cap would not be a simple, or appropriate, answer.
I don't give a shit if the Social Security Reform Act of 1983 was passed during Reagan's term. The notion that SS benefits should be taxed is just wrong. SS is an old age insurance policy. And in 83 they only taxed 50% of the money and rationalized it that the employer contribution should be taxable. In 1993 "Saint Bubba" let them tax 85% of the money. It is all bull shit because they've spent the money. If SSA was a real insurance company people would be going to jail.
There is a CAP on how much benefit you will receive in Social Security, so the theory goes that there should be a cap on how much you have to put in. But that thinks of S.S. like if this was still what it was original intended to be, an insurance program, but we jumped that shark long time ago and the program has changed beyond that.
And that theory is extremely, fatally flawed. 1) They can raise the CAP on "how much" you receive. 2) There are many cases of people who might have money now, but won't when they retire. If they paid a fair share into Social Security now, they would receive more in the end. 3) There are many, many, many situations when someone does not get out what that person put in. It is not a zero-sum game. However, even thinking of it as an insurance program (in the traditional sense) Social Security still makes sense. I am not married and do not have dependents (especially dependents with disabilities). I have been paying into Social Security for almost 40 years. If I die any time between now and 67, all of the money I have paid into Social Security (probably well over $150,000) would be redistributed. And, I am just fine with that. It is part of living in an organized society. On the other hand, I might become disabled and unable to work next month. Then SSDI would support me for the next 20 years or so, until Social Security retirement took over. Or, I live to 105 and receive Social Security for the over 30 years. Odds are, I would receive more than I paid into the system. Just like my house has never burned down, or had an ambulance emergency, but I still pay my taxes which support the fire department. I also pay home owners insurance, even though I never intend to collect on in (although I have made two small claims in the 20 years I have owned my house). I don't have kids, but pay my property taxes, which support the schools (even though the little shitheads from the school down the street trample on our hyacinths and tulips in the spring). We all pay for things through our taxes that we do not use or from which we do not directly benefit. It is all part of the "common good" of being in this country.
Well most people died before collecting, specifically poor people doing dangerous work, so the only people that collected in the insurance in case you do not die were the few that made it to that age. So the system was designed with that "unfairness" in mind.
An argument that it's not double taxation: "Therefore, if the ratio of lifetime contributions to benefits is less than 15 percent, then up to 85 percent of benefit income can be taxed without risk of double taxation." https://www.ssa.gov/policy/docs/issuepapers/ip2015-02.html
It hardly matters M, taxing SS benefits isn't going to make the system anymore solvent than sending seniors off to Mexico.
Nuffin wrong on going to Mexico. My wife and I took a drive from the top end of WA state to Cabo. I did some on line research and found a woman dentist who did her schooling and has her degree from the US. With the crowns, partial and extraction. A 6 week vacation and an 8K mile drive, hotels and gas. I was still over 50% better off than it would have cost me here. 6 years later and I haven't had a problem other than minor filling last year.