Comments on: Mirabile Dictu! WSJ Points Out the Rich Getting Richer is Bad for Social Security http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html Sat, 20 Mar 2010 00:01:49 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: No new taxes « The Sinking Sun http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-54524 No new taxes « The Sinking Sun Thu, 03 Sep 2009 23:10:57 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-54524 [...] new taxes By Attica Blue By way of a post on Naked Capitalism, I found myself on the comments page of a Wall Steet Journal article about the [...] [...] new taxes By Attica Blue By way of a post on Naked Capitalism, I found myself on the comments page of a Wall Steet Journal article about the [...]

]]> By: Bruce Krasting http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50914 Bruce Krasting Tue, 21 Jul 2009 20:24:45 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50914 Boris. Oops. I am not sure what I was thinking about this am. Not payroll taxes. Sorry and thanks.<br /><br />12.4% it is and that would add up to 136 or so bil. That comes to just shy of 1% of GDP.That is not what the economy needs.<br /><br />They would accomplish the same thing (tax the wealthy) if they just eliminated benefits from those who now and and the future will have that 'wealth'.<br /><br />This proposal makes SS much bigger. Wrong direction. Boris. Oops. I am not sure what I was thinking about this am. Not payroll taxes. Sorry and thanks.

12.4% it is and that would add up to 136 or so bil. That comes to just shy of 1% of GDP.That is not what the economy needs.

They would accomplish the same thing (tax the wealthy) if they just eliminated benefits from those who now and and the future will have that 'wealth'.

This proposal makes SS much bigger. Wrong direction.

]]> By: Lord http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50883 Lord Tue, 21 Jul 2009 18:18:49 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50883 Actually, up to 85% of SS is taxable and is taxed for retirees with AGIs above about $32k. If 85% of SS is not taxed it is only because that is the number with incomes below that. I believe it is closer to 66% that is below that level. As a result there isn't much money to found here unless benefits are taxed from the first dollar, lowering their already modest incomes. Actually, up to 85% of SS is taxable and is taxed for retirees with AGIs above about $32k. If 85% of SS is not taxed it is only because that is the number with incomes below that. I believe it is closer to 66% that is below that level. As a result there isn't much money to found here unless benefits are taxed from the first dollar, lowering their already modest incomes.

]]> By: locust http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50881 locust Tue, 21 Jul 2009 17:48:02 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50881 Tie the Social Security cap to Senate salary. They vote themselves a raise, the cap goes up accordingly. Tie the Social Security cap to Senate salary. They vote themselves a raise, the cap goes up accordingly.

]]> By: Anonymous http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50879 Anonymous Tue, 21 Jul 2009 17:14:49 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50879 SS is a very special scam. it's an accounting entry from govt to govt. plus, corporates that "contribute" payroll tax actually end up paying less of corporate tax because these taxes are deductible. so real "contributions" are much smaller than they seem. fixing SS is not that easy, and a 75 years number is a fantasy. SS is a very special scam. it's an accounting entry from govt to govt. plus, corporates that "contribute" payroll tax actually end up paying less of corporate tax because these taxes are deductible. so real "contributions" are much smaller than they seem. fixing SS is not that easy, and a 75 years number is a fantasy.

]]> By: Anonymous http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50873 Anonymous Tue, 21 Jul 2009 15:52:21 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50873 <i>Eliminating the ceiling alone would mean Social Security was adequately funded for the next 75 years.</i><br /><br />At least you admit that your proposal is nothing but kicking the can down the road again. For shame. Eliminating the ceiling alone would mean Social Security was adequately funded for the next 75 years.

At least you admit that your proposal is nothing but kicking the can down the road again. For shame.

]]> By: "DoctoRx" http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50872 "DoctoRx" Tue, 21 Jul 2009 15:47:21 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50872 Of course revenues can be found to fix SS. <br /><br />My objection to some of the ideas in the post is that SS was always promoted as NOT welfare: you worked, you contributed, you earned your benefits. Thus the cap on taxing income! If a worker's benefit were indexed to contributions, that would be a different matter. <br /><br />Also: the more the government becomes beholden to the "rich" for revenue, the more we get to a California situation: what happens when the rich aren't so rich anymore? <br /><br />I therefore favor a broad-based tax. Let rates go up for all if they must. Raise the cap somewhat, of course. Remember Clinton put in a non-capped 2.9% "Medicare tax". So when top rates go to 39.6%, they will really be at 42.5%. Plus Bush I put in a phase-out on mortgage income deduction for high earners. Guess what: "Reaganomics" is already moribund.<br /><br />(Actually I think the whole idea of Social Security given coming demographics needs a TOTAL rethink.) Of course revenues can be found to fix SS.

My objection to some of the ideas in the post is that SS was always promoted as NOT welfare: you worked, you contributed, you earned your benefits. Thus the cap on taxing income! If a worker's benefit were indexed to contributions, that would be a different matter.

Also: the more the government becomes beholden to the "rich" for revenue, the more we get to a California situation: what happens when the rich aren't so rich anymore?

I therefore favor a broad-based tax. Let rates go up for all if they must. Raise the cap somewhat, of course. Remember Clinton put in a non-capped 2.9% "Medicare tax". So when top rates go to 39.6%, they will really be at 42.5%. Plus Bush I put in a phase-out on mortgage income deduction for high earners. Guess what: "Reaganomics" is already moribund.

(Actually I think the whole idea of Social Security given coming demographics needs a TOTAL rethink.)

]]> By: Boris http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50867 Boris Tue, 21 Jul 2009 14:42:02 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50867 Bruce, your numbers are off. The tax rate for Social Security is not 2.4%; it's 12.4%, split 50-50 between employer and employee (largely to hide from the employee how much it really is, as far as I can tell).<br /><br />$1.1T * 12.4% = $136 bil. The article cites this number as $115 bil a year; not sure how that adds up.<br /><br />If the article's other numbers are right, the current revenue of Social Security would be 12.4% * (1.1T) / 0.17 * 0.83 (since the percentage of wages that _is_ subject to payroll tax is claimed to be 83%). That comes out to about $665 bil a year.<br /><br />Put another way, the proposal would increase revenues by about 20% (17/0.83).<br /><br />The Social Security folks are claiming that they can get revenues to not fall behind expenditures by raising the tax rate 16% (see http://www.ssa.gov/OACT/TRSUM/index.html), so if that happens to be true the above 20% hike (or more, if the fraction of income for the high earners keeps rising) should do the trick too. Bruce, your numbers are off. The tax rate for Social Security is not 2.4%; it's 12.4%, split 50-50 between employer and employee (largely to hide from the employee how much it really is, as far as I can tell).

$1.1T * 12.4% = $136 bil. The article cites this number as $115 bil a year; not sure how that adds up.

If the article's other numbers are right, the current revenue of Social Security would be 12.4% * (1.1T) / 0.17 * 0.83 (since the percentage of wages that _is_ subject to payroll tax is claimed to be 83%). That comes out to about $665 bil a year.

Put another way, the proposal would increase revenues by about 20% (17/0.83).

The Social Security folks are claiming that they can get revenues to not fall behind expenditures by raising the tax rate 16% (see http://www.ssa.gov/OACT/TRSUM/index.html), so if that happens to be true the above 20% hike (or more, if the fraction of income for the high earners keeps rising) should do the trick too.

]]> By: Bruce Krasting http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50862 Bruce Krasting Tue, 21 Jul 2009 13:14:43 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50862 I follow these things and can't find a public source where the SSTF makes a statement, "we can fix the problem if we do away with the ceiling".<br /><br />So this information was provided to the WSJ on the side. I think that this story is one of those 'trial balloons' from DC and the WSJ is just giving it airtime. <br /><br />If that is the case then we should expect more on this from another source by Friday.<br /><br />I look at these income numbers and am puzzled. The story looks at this $1.1 trillion number for 07 as the basis for these conclusions. This is 09 folks. A lot of that 1.1T is up in smoke in 09.<br /><br />Some math $1.1 T *2.4% = $26bil<br /><br />So eliminating the ceiling adds just $26 bil to the pot.<br /><br />The SS is paying out $55 bil per month now. That number is rising with the boomers at a 10% rate.<br /><br />There is no way that an extra $26 bil a year 'fixes' this problem. That is not even close. <br /><br />Stay tuned there is more to come on this. I follow these things and can't find a public source where the SSTF makes a statement, "we can fix the problem if we do away with the ceiling".

So this information was provided to the WSJ on the side. I think that this story is one of those 'trial balloons' from DC and the WSJ is just giving it airtime.

If that is the case then we should expect more on this from another source by Friday.

I look at these income numbers and am puzzled. The story looks at this $1.1 trillion number for 07 as the basis for these conclusions. This is 09 folks. A lot of that 1.1T is up in smoke in 09.

Some math $1.1 T *2.4% = $26bil

So eliminating the ceiling adds just $26 bil to the pot.

The SS is paying out $55 bil per month now. That number is rising with the boomers at a 10% rate.

There is no way that an extra $26 bil a year 'fixes' this problem. That is not even close.

Stay tuned there is more to come on this.

]]> By: Dave L http://www.nakedcapitalism.com/2009/07/wsj-points-out-rich-getting-richer-is.html#comment-50859 Dave L Tue, 21 Jul 2009 12:51:36 +0000 http://www.nakedcapitalism.com/2009/07/mirabile-dictu-wsj-points-out-the-rich-getting-richer-is-bad-for-social-security/#comment-50859 No, the Journal isn't changing its spots. This article is from the news side, which has always operated independently from the opinion page. Look for an editorial in a day or two that takes a flatly contradictory line on this, and ignores the evidence brought forward by the paper's own reporters. No, the Journal isn't changing its spots. This article is from the news side, which has always operated independently from the opinion page. Look for an editorial in a day or two that takes a flatly contradictory line on this, and ignores the evidence brought forward by the paper's own reporters.

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