First tax increase of 2017 announced

[Fanatical Meat]

^^Social Security is a pay as you go set up it is not like a savings plan or 401k. What you pay now supports a retired person now, it is not invested for when you retire. When you & I retire we'll be supported by people who work. That is why the Boomers are a problem. The extra taxes they paid into the funds in the 80s(?) was spent on other stuff by Regan(?).

 

[brycejones]

Isn't Social Security a private account between citizen and government?

Not even close.

https://www.nasi.org/learn/socialsecurity/overview

 

[Jaskalas]

$92,000 when someone would no longer need Social Security benefits in retirement?

For basic income the idea behind $92k is I stop giving $1 in benefit for every $4 earned over $44k. Resulting in no benefit by $92k.
Social security is different with retirement as a concept, but what else would "means testing" it be referring to, besides income while presently collecting it? In no way do I support dropping it from people who need it.

 

[MovingTarget]

"High rolling Rockefellers?" How does earning $127,200 place one in that category? For most areas that's a comfortable income but not even in the realm of "rich."

And "the time to pay up is overdue?" If someone pays the maximum tax each year for Social Security (there is no cap on the employer's contribution) how have they not "paid up?"

When most white collar professionals in your area make ~1/3 to 1/2 of that amount, yes, it most certainly make you a "high rolling Rockefeller" by comparison. We would live like kings with that salary. Regardless of what the tax code currently says, with all the gains in the economy going to the upper classes, if the upper classes don't contribute more as a whole to societal stability (of which Social Security is a prime example), they are all but ensuring that they or their children will eventually see the torches and pitchforks come out against them. The social contract in that area seems to be breaking apart.

 

[Jaskalas]

We would live like kings with that salary.

Live like kings at $130k?
Taxes and savings: Half, or $65k remaining.
Nice house $3k/mo: $29k remaining.
Family healthcare: You're broke.

 

[child of wonder]

Not even close.

https://www.nasi.org/learn/socialsecurity/overview

Sorry, I meant to say a private agreement. A bit slow today due to hangover.

 

[child of wonder]

When most white collar professionals in your area make ~1/3 to 1/2 of that amount, yes, it most certainly make you a "high rolling Rockefeller" by comparison. We would live like kings with that salary. Regardless of what the tax code currently says, with all the gains in the economy going to the upper classes, if the upper classes don't contribute more as a whole to societal stability (of which Social Security is a prime example), they are all but ensuring that they or their children will eventually see the torches and pitchforks come out against them. The social contract in that area seems to be breaking apart.

Nothing could be further from the truth. Not only do taxes drastically increase as your income passes $75,300 in a household, but you begin to lose deductions and credits along with it. Child tax credit goes away, child care deduction decreases, Lifetime Learning and American Opportunity credits disappear, student loan interest deduction, Roth IRA goes away, and the list goes on and on.

Trust me, those "high rolling Rockerfellers" that exist in the upper middle class/lower upper class range pay a huge amount of taxes and they are NOT living like kings.

My wife and I thought the same as you only 10 years ago when we were making $60k a year combined. "Those greedy people that make $100k+! They should be taxed more! With that kind of income we would live like kings!!" Then we moved up in our careers and found that we were completely off base.

 

[Jhhnn]

^^Social Security is a pay as you go set up it is not like a savings plan or 401k. What you pay now supports a retired person now, it is not invested for when you retire. When you & I retire we'll be supported by people who work. That is why the Boomers are a problem. The extra taxes they paid into the funds in the 80s(?) was spent on other stuff by Regan(?).

Please. Until just recently, SS was a giant cash cow from the 80's forward lending money to the Treasury as the resulting trust fund grew to $2.7T. That fund was established to ease the burden on younger people because of the demographic bulge of the Boomers. It was always understood that the money to honor those obligations had to come from somewhere, either from increased fund revenue or from the general fund.

We can easily raise revenues simply by collecting the employee's share of SS taxes from all income. We can create new levels of benefits far above those currently available to high earners, as well. SS will become a giant cash cow well into the future, lending money to the govt with an ever increasing trust balance that won't matter at all.

 

[Jhhnn]

Live like kings at $130k?
Taxes and savings: Half, or $65k remaining.
Nice house $3k/mo: $29k remaining.
Family healthcare: You're broke.

Gawd. $130K is about twice the median family income. Whining about it won't gain any sympathy, bet on that.

 

[Kwatt]

The life expectancy in 1937 was 62 and the average household was 4.1 people. Today it's 79.3 and 2.57.

The main difference is the infant mortality. Which accounts for ~16 years IIRC. Over 8% died in the first year in 1937 compared to less that 1% in 1994. Take out all of the zero's and life expectancy for a person born in 1937 and one born in 1994 is only about 2 years +-.

If you where born in 1937 and reached the age of 18 when you start really paying into SS. You would draw for almost the same amount of time as someone born in 1994.

Why the mortality rate is included for people that don't live long enough to pay into SS or draw from SS baffles me every time I see it.

The mortality for SS security should be calculated from the age in which people become eligible to draw upon it I.E. Start paying into SS.

.

 

[Mai72]

When most white collar professionals in your area make ~1/3 to 1/2 of that amount, yes, it most certainly make you a "high rolling Rockefeller" by comparison. We would live like kings with that salary. Regardless of what the tax code currently says, with all the gains in the economy going to the upper classes, if the upper classes don't contribute more as a whole to societal stability (of which Social Security is a prime example), they are all but ensuring that they or their children will eventually see the torches and pitchforks come out against them. The social contract in that area seems to be breaking apart.

No pitch forks. The wealthy are just too smart, while the middle class only care about comfort. The poor are too poor to do anything.

I don't get jealous at the wealthy. My motto is try to emulate what they do. Why should we rely on SS anyway? Do you seriously think it's going to be available when you or I retire? I'm banking on the fact that it's going to be in horrible shape in 30 years. Why rely on the government to take care of me when I'm perfectly capable of making more money and investing for the future. On my own. Most people don't even know how much money is taken out of their paychecks. IMO, it's sad.

If this also means moving out of NJ or even out of the country I'll do it. It's important to be nimble. That's just me though. I want to get the most bang for my money so if I need to relocate to SE Asia or South America I'll do it.

 

[Jaskalas]

Gawd. $130K is about twice the median family income. Whining about it won't gain any sympathy, bet on that.

I'm pointing out a fact, it's not rich. $130k and you still have to choose between a house or healthcare.

 

[Mai72]

Nothing could be further from the truth. Not only do taxes drastically increase as your income passes $75,300 in a household, but you begin to lose deductions and credits along with it. Child tax credit goes away, child care deduction decreases, Lifetime Learning and American Opportunity credits disappear, student loan interest deduction, Roth IRA goes away, and the list goes on and on.

Trust me, those "high rolling Rockerfellers" that exist in the upper middle class/lower upper class range pay a huge amount of taxes and they are NOT living like kings.

My wife and I thought the same as you only 10 years ago when we were making $60k a year combined. "Those greedy people that make $100k+! They should be taxed more! With that kind of income we would live like kings!!" Then we moved up in our careers and found that we were completely off base.

That's right. I tell people all the time that $100k isn't much money anymore. It's very difficult to have this type of conversation with people who make an average salary because for the most part they are just getting by.

The tax codes were put forth by the rich and benefit the wealthy. Why do you think they park much of their income in other vehicles such as real estate.

If I were you I'd live on $3-4k a month and bank the rest into an account that you can't touch. Keep doing that for 2-3 years and you should have nearly $100k. Look for ways to make more money and bank it all. You want to save to invest. Not save to save. Stay hungry. While you're doing this focus your attention on multi-family apartments. Do the research. When you find something take that $100k and put it down on a nice complex that has about 12-15 doors. Should cost you about $400-500k. Get a loan from the bank to cover your investment. Not all debt is equal. This is good debt. Have the tenants pay off your mortgage. Immediately you'll have positive cash flow to start paying off your mortgage and you'll have money in the bank. Grant Cardone has stated that he always expects to get 12% his first year. It only goes up year after year. Once you get yourself established buy another and then another. In no time these investments will be creating passive income.

That's exactly what I tend to do. I have a friend whose been doing this and is retired in his mid 40s. He gets to do what he wants and when he wants to do it. Total freedom.

 

[Jhhnn]

I'm pointing out a fact, it's not rich. $130k and you still have to choose between a house or healthcare.

Bullshit. You can pull numbers out of your ass all day long & you won't convince anybody but yourself. $130K gross family income is somewhere well north of the 80th percentile. It's not like we're a nation of paupers.

 

[child of wonder]

Bullshit. You can pull numbers out of your ass all day long & you won't convince anybody but yourself. $130K gross family income is somewhere well north of the 80th percentile. It's not like we're a nation of paupers.

Here's an example of a married couple in MN, two kids, and each spouse earns $70,000 for a combined income of $140,000. Assuming they both claim two exemptions, contribute 6% to 401k, and one pays $600/mo for family health insurance that gives them $8100/mo in net income.

-$2,000 Mortgage
-$150 Cable TV and internet
-$150 Cell Phones
-$200 Electricity and Natural Gas
-$100 Car Insurance
-$400 Car payment
-$50 Water/Sewer
-$50 Life Insurance
-$300 Student Loan payment
-$100 Other various bills
-$1000 Food
-$200 Clothes
-$100 Medical expenses (prescriptions, co-pays, etc.)
-$400 Entertainment
-$200 Gasoline
-$500 Roth IRA savings
-$200 Fun money

That leaves $2,000/month to save.

Even $140k doesn't go very far. This is just a standard middle class family. A six figure income isn't what it used to be.

 

[Jhhnn]

Here's an example of a married couple in MN, two kids, and each spouse earns $70,000 for a combined income of $140,000. Assuming they both claim two exemptions, contribute 6% to 401k, and one pays $600/mo for family health insurance that gives them $8100/mo in net income.

-$2,000 Mortgage
-$150 Cable TV and internet
-$150 Cell Phones
-$200 Electricity and Natural Gas
-$100 Car Insurance
-$400 Car payment
-$50 Water/Sewer
-$50 Life Insurance
-$300 Student Loan payment
-$100 Other various bills
-$1000 Food
-$200 Clothes
-$100 Medical expenses (prescriptions, co-pays, etc.)
-$400 Entertainment
-$200 Gasoline
-$500 Roth IRA savings
-$200 Fun money

That leaves $2,000/month to save.

Even $140k doesn't go very far. This is just a standard middle class family. A six figure income isn't what it used to be.

Looks like a very nice life to median families who earn about half as much. It should, since that's right at the 90th percentile. 20-30 years of that would lead to financial independence.

 

[nickqt]

No pitch forks. The wealthy are just too smart, while the middle class only care about comfort. The poor are too poor to do anything.

I don't get jealous at the wealthy. My motto is try to emulate what they do. Why should we rely on SS anyway? Do you seriously think it's going to be available when you or I retire? I'm banking on the fact that it's going to be in horrible shape in 30 years. Why rely on the government to take care of me when I'm perfectly capable of making more money and investing for the future. On my own. Most people don't even know how much money is taken out of their paychecks. IMO, it's sad.

If this also means moving out of NJ or even out of the country I'll do it. It's important to be nimble. That's just me though. I want to get the most bang for my money so if I need to relocate to SE Asia or South America I'll do it.

SS has been 30 years from "bankruptcy" for the past 30 years.

Protips:

The Pentagon goes "bankrupt" every single year. Yet the US still finds a way to buy more bombs and bullets.

Removing the SS FICA cap means that SS is solvent for eternity.

 

[fskimospy]

Here's an example of a married couple in MN, two kids, and each spouse earns $70,000 for a combined income of $140,000. Assuming they both claim two exemptions, contribute 6% to 401k, and one pays $600/mo for family health insurance that gives them $8100/mo in net income.

-$2,000 Mortgage
-$150 Cable TV and internet
-$150 Cell Phones
-$200 Electricity and Natural Gas
-$100 Car Insurance
-$400 Car payment
-$50 Water/Sewer
-$50 Life Insurance
-$300 Student Loan payment
-$100 Other various bills
-$1000 Food
-$200 Clothes
-$100 Medical expenses (prescriptions, co-pays, etc.)
-$400 Entertainment
-$200 Gasoline
-$500 Roth IRA savings
-$200 Fun money

That leaves $2,000/month to save.

Even $140k doesn't go very far. This is just a standard middle class family. A six figure income isn't what it used to be.

So you're basically saying you don't have any money after you spend all your money.

 

[Jhhnn]

SS has been 30 years from "bankruptcy" for the past 30 years.

Protips:

The Pentagon goes "bankrupt" every single year. Yet the US still finds a way to buy more bombs and bullets.

Removing the SS FICA cap means that SS is solvent for eternity.

Well, yeh, but Repubs would lose one of their perpetual points of fear mongering & tearing down the govt.

 

[FelixDeCat]

Well, yeh, but Repubs would lose one of their perpetual points of fear mongering & tearing down the govt.

Oh please.

 

[FelixDeCat]

lol

 

[ivwshane]

Here's an example of a married couple in MN, two kids, and each spouse earns $70,000 for a combined income of $140,000. Assuming they both claim two exemptions, contribute 6% to 401k, and one pays $600/mo for family health insurance that gives them $8100/mo in net income.

-$2,000 Mortgage
-$150 Cable TV and internet
-$150 Cell Phones
-$200 Electricity and Natural Gas
-$100 Car Insurance
-$400 Car payment
-$50 Water/Sewer
-$50 Life Insurance
-$300 Student Loan payment
-$100 Other various bills
-$1000 Food
-$200 Clothes
-$100 Medical expenses (prescriptions, co-pays, etc.)
-$400 Entertainment
-$200 Gasoline
-$500 Roth IRA savings
-$200 Fun money

That leaves $2,000/month to save.

Even $140k doesn't go very far. This is just a standard middle class family. A six figure income isn't what it used to be.

Just a point of fact: $500 Roth Ira savings is SAVINGS. So $2500 to go towards "savings", and that ignores the 6% 401k you mentioned. Shit! If the idiot baby boomer generation were doing this shit already we'd have a booming economy with millennial's sitting pretty! Boomers would retire at the normal age, if not sooner, and everyone else would move up the ladder.

 

[Jaskalas]

A $2000 mortgage? Do you really need to live in a $640,000 McMansion?

$150 cable? Who watches TV anymore?

$400 car payment? Pay cash for used ones. For $3,000 to $4,000 cash there are plenty to chose from. And $400 will only pay for one new car anyway.

Haggling over simple luxuries does not strike me as Rockefeller rich.
And that mortgage price you cite is extremely low. I know a $350,000 house that costs at least $3000/mo counting taxes and insurance.

 

[Mai72]

A $2000 mortgage? Do you really need to live in a $640,000 McMansion?

$150 cable? Who watches TV anymore?

$400 car payment? Pay cash for used ones. For $3,000 to $4,000 cash there are plenty to chose from. And $400 will only pay for one new car anyway.

My parents lived in a home and their mortgage was $2300 a month. It wasnt even close to being a McMansion.

You'll find that for most people the issue isn't cutting expenses. It's making money. What if he made $300k a year? The $2000 mortgage, 400 car payment and $150 cable bill would be non issues.

Also, maybe you didn't realize this but people get smaller. You turn into a little mouse. Cut this. Save that. Live in this little area for cheap because you can't afford it. Don't you want abundance? Have so much that you can live your life the way you want? Without compromising.

 

[Ackmed]

I agree with Mai72. And just because someone doesn't watch TV, doesn't mean others don't.

Those who have a generous income should not receive additional funds from the government.
In terms of allocation of resources, there are plenty of other people who need it more.

As for what is taxable... it makes no sense for there to be an upper limit.

I don't agree with this. The proposed numbers differentiate across the map too. That kind of money is probably nothing in certain cities, yet far more in others.

Not only that, people who do well in life because they tried harder, who perhaps went to school should not have to pay more just because they make more.