What about my question about Senate/Congress? Do they have a separate government pension? Why shouldn't they rely on SS like the rest of us? I believe they do have a separate pension, but so do many private citizens. I think federal employees also have a great pension system. SS is a safety net -- it's not meant to be your only savings / source of income, but a basic amount for those that may not have anything else.
Ideal tax rate = 17% ACROSS THE BOARD. The only exception would be those earning less than $24,000 a year. Anybody in that category pays nothing. If you take out all of the deductions which are designed to get the wealthy out of paying taxes (our Legislators are wealthy BTW)...then the 17% for the wealthy would more than make up the difference. Maybe that's not the answer...I could be wrong. But I will tell you this...look at all of your receipts, bills, car papers, etc etc etc...and add up how much of your money last year went to government. Once you pick yourself up off the floor I think you'll understand my point.
Oh my god, you guys are RELENTLESS. How can you be arguing this early on a Saturday morning?!? I've got a good 2 more hours of de-tox before I'm capable of jumping into this fray again.
Ideal tax rate = 17% ACROSS THE BOARD. The only exception would be those earning less than $24,000 a year. Anybody in that category pays nothing. If you take out all of the deductions which are designed to get the wealthy out of paying taxes (our Legislators are wealthy BTW)...then the 17% for the wealthy would more than make up the difference. Does this include the 13% Social Security tax, or is that added on? If you do this, you're going to have to have hundreds of billions in tax revenues to make up, or programs to cut. The 17% flat-tax from Bill Archer has been shot down numerous times in terms of its revenue estimates being way out of whack. What types of programs would you propose cutting? You're also going to shift a significant portion of the tax burden to the middle & lower classes - the wealthy currently pay more than 17% net after deductions. That puts more people in or near poverty, expanding welfare rolls and increasing social services costs. This puts more pressure on homeowners, parents trying to put students through school, etc (all the things which have major deductions). This also makes it even easier for the rich to get richer, the middle class to stagnate, and the poor to get poorer. (I'm just playing devil's advocate here - I don't know the "best" tax rate either - I doubt there even is one. I'm just trying to show that it's easy to say we need to cut or raise taxes, but its much more difficult in reality).
Major-- I understand that this is a lot more difficult than it seems to many people. I also believe that we should "render unto Caesar that which is Caesar's." But come on...really...you can't possibly look at how much money the average human being in this country pays to the government and think that the people are not overtaxed. Taxation at this level is a relatively new phenomenon in this country. The first income tax was levied in 1917. The first time we had a tax rate over 10% was during WW2. After the war, the rates were reduced. Since the 1950s, the tax rates have spiralled out of control. If you are in the middle class you pay AT LEAST 30% of your income to the Federal government (includes tax withholdings and SS withholdings). Then they tax your gasoline, your electricity, etc etc etc. That doesn't even touch the state and local taxation. After you include state taxation...the average American in the middle class works from January to June just to pay their taxes. IMO...that's ludicrous.
What you are not taking into account is that the extra $$$ in my pocket will be spent on consumer goods. The economy will thrive. The US will reach full employment. Government spending will go drastically down and yearly budget surpluses will return. Things will be going so well, the IRS might even send me a refund check from the surplus.
Isn't what people object to, though, that Congress doesn't even have to participate in the SS system while imposing it on the rest of us.
Congress has given themselves a nice, fat pension while the rest of us get stuck with a system that Congress doesn't feel is good enough for them. There's a shocker.
I don't really object to them setting up a private pension-- except that they determine their own salaries. Am I right in understanding that they don't pay for SS benefits? If so, that's wrong. How surprising! Am I wrong about the hospitals in Galveston and Princeton, WV? Has nobody encountered those exceptions?
But come on...really...you can't possibly look at how much money the average human being in this country pays to the government and think that the people are not overtaxed. Taxation at this level is a relatively new phenomenon in this country. The first income tax was levied in 1917. The first time we had a tax rate over 10% was during WW2. I agree that tax rates are certainly "high" - but if you compare them to most other countries, we're actually fairly low. I agree it would be nice to cut taxes, but I'm not sure what programs we'd cut. In the early 1900's, we didn't have massive defense costs, social services, any education spending, etc. Things like the Federal Highway Program (massive spending bill) didn't exist - there was no I-35 to go from Dallas to Austin. These all cost money, so I'm not sure there's an ideal solution. I think you have to strike a balance between a tax rate that's not overbearing (70% for the top income classes in the 70's is just ridiculous) and one that can provide all the common-good services we take for granted. Contrary to some of my posts bashing Bush, I'm not necessarily opposed to tax cuts - I'm opposed to them if they don't include a reasonable cut in spending to balance it. And then if the tax cut is evenly distributed between all economic classes (which is OK), I'll b**** if the spending cuts disproportionately target the lower classes who need the services the most. What you are not taking into account is that the extra $$$ in my pocket will be spent on consumer goods. The economy will thrive. The US will reach full employment. Government spending will go drastically down and yearly budget surpluses will return. Things will be going so well, the IRS might even send me a refund check from the surplus. No Worries, Surplus = Revenues - Spending. A tax rate of 0% = $0 in revenues. You can't have a Surplus with a 0% tax rate. [dammit, this is Major, not RM95]
Corporations would still pay taxes, in the Reagan Supply Side Wet Dream I noted above. It seems to me that the people who say that taxes are too high should be really saying that the federal government spending is too high. The fact that they do not is curious. Forwarding the tax cut issue without an associated fed spending cut is like a bait and switch. Everyone would like to pay less taxes. At the same time, no one would like to see government programs cut. IMO, real leaders in Washington should not focus on the tax cuts, but on the whole package of reduced taxes and reduced spending. To not do so is financially irreponsible. All this leads me to believe that the Reps are more interested in paying less taxes (since they are innately greedy and self centered) and do not care about the federal deficit, since the consequences of a growing federal deficit will not have any impact on them in their lifetime.
Actually they do. It is pretty much a fundamental tenet in conservative politics that the government spends too much money, especially on things that the constitution did not specifically mentions (i.e. social programs). The problem is that the government is run by politicians - and all politicians (IMO) get corrupted by the system. As soon as someone mentions cutting spending, all sorts of cries go up about how it will hurt "the children" (or whoever). Also, politicians all have their own pet projects they want to fund so one group doesn't really come down on another so they can all keep spending money on programs (pet projects) that schmooze their constituency. Plus, you can't run for re-election on a platform of "I didn't do anything!" So, politicians have to spend money to look like they are doing stuff to rationalize their jobs. Btw, this is one reason presidents wants a line-item veto. A lot of spending gets passed because it is included in bills that have nothing to do with the said spending! I'm just generalizing here (more like ranting). Politicians, in general (and IMO) don't have the best interests of the country in mind, but the best interests of themselves (first) and their party second.
One thing that I think should be mentioned is that under the President's plan, privatization was completely optional and there were diversification requirements for the accounts to keep them less risky. As for me, i'm still undecided on whether privatization will lead to the promised land, but I do know this; throwing more money at the current system, like Gore wanted to, so that it doesn't go belly up in 2037 is not the way to do it. There must be an honest effort at restructuring the system.
Sweet, I made a semi-intelligent post for once! BTW, I make a decent living, and only get 25% taken out of my paychecks.
Fixing SS would require all parties to have a honest discussion. SS is such a hot button political issue that it is extremely likely the discussion will get derailed rather quickly. Congress has been tap dancing around the SS bankrupcy issue for at least the last 20 years or so (this is as long as I have been paying attention). Putting the honesty filter to what you stated above, there is no SS system. SS is funded pay as you go. All SS surpluses do not go into a SS fund. The surpluses go into the general fund to make the bottom line look better every year. Accounting tricks are done as a smoke screen (like all of the Texas lottery funds going to fund schools). SS will only go belly up when the US federal government does. The 2037 year figure is BULLSH*T. SS will only go bankrupt in 2037 if SS really had its separate fund, which it does not. The most important first step to SS is to separate SS monies from the general fund. Anybody proposing anything less as a first step should not be trusted.
First of all let me say that you are right on when you bring up the honesty issue. That is by far the biggest obstacle for legitimate reform of SS. This debate will become very politicized when it really comes to the forefront of the political scene and I just hope what comes out of it is somewhat functional after tinkering from both sides. I know how political this can get as I worked last year with Sen. Moynihan and Dick Parsons on the President's Commission to Strengthen Social Security in DC. That panel, as you probably know, was a bipartisan panel that decided that privatization was the way to "save social security." While I'm not completely sold on the idea in principle, it does have its merits, and I can guarantee you our numbers weren't bullsh*t. Like everything in Washington, it just all depends on how you look at it. As for the 2037 bankruptcy thing, you are completely right in your interpretation. The system will obviously not disappear, however, it will have to be subsidized by other tax revenue after that time. The point of the current system is that it is self-sufficient and does not require supplemental revenues from anywhere. That would change in 2037. Thus, if the politicians want to keep it self-sufficient, as they have claimed they have, something must be done. Your idea of a separate fund is a hell of a great start . . .
Then you only work through March to pay Uncle Sam...what about the rest of the money you must fork over to government? Phone taxes, cable taxes, electric taxes, car registration fees...etc etc etc? It has grown to be so much of a shakedown that the only thing missing is two Italian gentlemen in double breasted suits coming to your house to get the check.
Here's the lowdown on Congressional pensions, retirement, etc. from the National Taxpayers Union: "Members of Congress began paying into Social Security in 1983, as part of a government-wide pension overhaul. This is a requirement, and Members may not opt out of it. They then have the option of participating in one of two pension plans, depending upon when they were elected. If elected before 1984, they participate in the Civil Service Retirement System; if elected 1984 and after, they participate in the Federal Employee Retirement System. These two plans are also offered to rank and file federal employees, EXCEPT that the Congressional plan's benefit is calculated on a more generous formula than that offered to most other government workers. The "accrual rate" is much higher, and lawmakers tend to be able to retire earlier with benefits than other federal workers (as early as age 50). Also, Members of Congress may participate in the government-wide Thrift Savings Plan, which works like a federally-managed 401 (k) salary reduction plan. FERS participants are entitled to a government match of up to five percent of salary; CSRS participants may set aside part of their own salary, but they do not receive the match. In both cases, Members of Congress do contribute to their pension plans, although the rates are somewhat complicated by the fact that since 1983, lawmakers have been required to pay into Social Security. Members elected before 1984 must pay 8 percent of their salaries into the pension plan, but may elect a "Social Security offset" provision that allows them to split the pay-in (6.2 percent for Social Security and 1.8 percent for the pension.) The result is that upon retirement, Members receive a pension that is reduced by the amount of Social Security that is attributable to Congressional service. Members elected in 1984 and thereafter pay 1.3 percent towards the pension and 6.2 percent to Social Security. This only compensates for about 1/5 of the typical lifetime benefit. We cover the rest as taxpayers. With service of 20-25 years, a Member of Congress could retire with up to 80 percent of his or her final salary replaced. Of course, the only cap on how fast their benefits rise is the rate of increase in CPI. For this reason, Congressional pensions can and frequently do exceed a Member's final salary, but only after a few years in retirement, when COLAs begin to kick in. For example, a Member of Congress who could collect $5 million or more, if he or she retires in his/her fifties, lives until his/her eighties, and elects to leave a part of the pension benefit to a spouse, who then live 10 or more years longer. This could include George Mitchell, especially after his post-Congressional government service. With Cost of Living Adjustments, total payments over a lifetime can reach these levels (though the more typical payout is likely to be between $1 million and $2 million). In the final analysis, Congressional pension benefits are 2-3 times more generous than what a similarly-salaried executive could expect to receive upon retiring from the private sector."
One of the problems I have with "the saving of SS" is that the Baby Boomers bubble is made up of workers who have 20-35 years vested into the pay as you go scheme. For a privatization accounts to make sense to me, these Baby Boomers should have had private accounts from the get go. In otherwords, the Baby Boomers should have the ways and means to pay for themselves. By giving BBs private accounts now, there may not be time for the miracle of compound interest to save the day. The second problem I have with private accounts is that they are self directed (as I understand it). Most investors do not understand diversification (I am being very gentle here). Since SS is a safety net, allowing individual investors the ability to make investment decisions would be self defeating. These accounts have to be professionally managed. IRAs and 401/403 accounts are not safety nets, so self direction here is the right thing to do. And I am also not sure that the private accounts will be allowed a proper diversification, for political reasons. Lets look at a "good" diversification: 15% - Short term, federally guaranteed money market fund or US Treasuries 15% - Mid/Long term corporate bonds 15% - International mid/long term corporate bonds 20% - Large cap US stocks (like S&P 500 mutual fund) 5% - Small cap US stocks 10% - International stocks 15% - Real estate 5% - Gold 25% of the above is invested in international (non US) stocks and bonds. Politically this would be a non- starter. My solution to the SS mess would be first to build a firewall between the SS monies and the rest of the federal accounts. Second, the surplus each year would be invested in a diversified, professionally managed account. How the accounts are managed should not be a subject that could easily be politically manipulated (e.g the chairman of the House Ways and Means committee should not be able to have SS monies over invested in companies from his district). I know this is delusional since Congressmen do not give up this type of control.
do you honestly think you hurt my feelings? do you honestly think i care that much? don't flatter yourself, glynch... but as refman points out, it is one reason why your arguments aren't taken very seriously here by many...the point is, you're not arguing politics...you're labelling people and making asssumptions about people you have no idea about. i have no problem talking politics here with many people who take the opposite views...Jeff and RM95 come to mind immediately...
