President to propose tax increases <shocker!>

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drebo

Diamond Member
Feb 24, 2006
7,034
1
81
Let's assume today you are 22 and fresh out of college. You are making $100,000 per year right out of college and 12.4% of your income (between you and your employer) is paid in SS tax.

Assuming you get an average raise of 3% per year and the government safely invests your SS tax and gets a 6% return every year, your SS taxes will have grown to $2.4 million by the time you reach age 70 (when you can get the maximum SS payout).

So you're 70 and you get to retire with (according to ssa.gov's quick calculator) $18,345 per month or $220,140 per year in benefits. If you live to the ripe old age of 90, SS will pay you $4.4 million during your 20 year retirement -- FAR more than what you paid in.

Where does that additional $2 million come from? Other citizens' SS taxes.

It is not just YOUR money.

The fact that SS was poorly designed has no bearing on whether or not money I paid in to it is mine or yours.

Allow people (outside of special disability cases) to draw only what they put in and the problem is fixed.
 

sactoking

Diamond Member
Sep 24, 2007
7,582
2,817
136
Here's a question, which is worse:

A) Promising not to raise taxes and then doing so, even though the overall picture has not changed?
-or-
B) Promising not to raise taxes and then vetoing every tax increase even though it means financial ruin for many sectors?

I ask b/c this is an interesting quandry. Obama, a Democrat, ran on a pledge not to raise taxes on the "middle class". The economy hasn't fundamentally changed since that promise was made, yet tax hikes now are apparently on the table.

Brian Sandoval, a Republican, ran and was elected Governor of Nevada on a "no tax increase" platform. His submitted budget destroys public education in what is already the worst state for education, makes drastic cuts to state employees in what is already the "leanest" state government in the nation, and otherwise just destroys the state economy. He has vetoed at least one spending bill and will veto all others that come across is desk, and the GOP caucus can break a veto override.

So, on the one hand we have a leader who makes a tax pledge and has to backtrack b/c of shortsightedness and on the other we have a leader who makes a tax pledge and refuses to backtrack even if it leads to utter ruin.

Which is worse?
 

Argo

Lifer
Apr 8, 2000
10,045
0
0
What should be a nonstarter right away is the same tired 'let's raise taxes on the 250-thousandaires' while doing nothing to repeal the carried interest provision that let's anyone paid in stock (like senior execs) pay only 15&#37; effective tax.

I don't think that's a true statement. Your income is taxed at appropriate bracket, regardless if it's stock, cash or gifts. Now if your stock doubles in value after you received it, the additional tax will be 15%, provided you held the stock for more than a year. So the total tax would be:

0.35 * A + 0.15 * (B - A),

where A is the price of the stock when you received it, and B is the price of the stock when you sold it.

Just wanted to clear some misconception, since apparently people think those of us who receive stock bonuses only pay 15% tax.
 
Feb 19, 2001
20,155
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Just make the rich pay SS with no CAP, Same should go for the profits on Corporations.

How about we can start opting out of SS? Sorry if you want to put your money in a sinkhole. Hell let's just cut SS now. Better hurt a few people now than take the whole country down....

The fact that SS was poorly designed has no bearing on whether or not money I paid in to it is mine or yours.

Allow people (outside of special disability cases) to draw only what they put in and the problem is fixed.

So why not make it a mandatory 401k-like solution where YOU manage your own money and for those who think 401ks are frauds, then force us to invest in treasury bonds and crap. I don't care. As long as it's MY money and my pool.
 
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spidey07

No Lifer
Aug 4, 2000
65,469
5
76
I don't think that's a true statement. Your income is taxed at appropriate bracket, regardless if it's stock, cash or gifts. Now if your stock doubles in value after you received it, the additional tax will be 15%, provided you held the stock for more than a year. So the total tax would be:

0.35 * A + 0.15 * (B - A),

where A is the price of the stock when you received it, and B is the price of the stock when you sold it.

Just wanted to clear some misconception, since apparently people think those of us who receive stock bonuses only pay 15% tax.

That's true, but it depends on if the options or award are qualified or non-qualified. If they give it as actual compensation, then yeah you get reamed, considered normal income plus any STCG or LTCG.
 

PokerGuy

Lifer
Jul 2, 2005
13,650
201
101
Which is worse?

The second example, Sandoval is doing exactly what he's supposed to be doing. It's not bad at all. Spend no more than you bring in. The concept is not that difficult, but libs seem to have such a hard time understanding it.
 

jonks

Lifer
Feb 7, 2005
13,918
20
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The second example, Sandoval is doing exactly what he's supposed to be doing. It's not bad at all. Spend no more than you bring in. The concept is not that difficult, but libs seem to have such a hard time understanding it.

Right, when conservatives are in power they adhere stridently to that theory. Or is it that they understand it, they just don't give a fuck?
 

Throckmorton

Lifer
Aug 23, 2007
16,829
3
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Republicans are just as bad, real conservatives believe in limited government which includes less government spending.

And yet those "real conservatives" voted for Reagan. They voted for Bush. They'll vote for Romney in 2012. They'll vote for Pawlenty in 2016. They'll vote for Christine O'Donnell in 2020.

I call shenanigans on this "real conservative" bullshit.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
You guys are missing the whole point. Large numbers of people will in fact opt out, and then they WILL come crying when they are old an indigent. We as a society have decided that abject poverty for the elderly is something we cannot accept, and I don't think we'll be more willing to watch 'ol granny starve to death in the future than we are today.

What will end up happening is that these fools will opt out, and then we'll end up paying for them anyway.

If the left would stop rewarding stupid behavior, liking failing to fund your own retirement or buying far more house than you could ever afford with a neg. ARM, maybe we'd get less of it?

You're probably right that if given the option, quite a few people would likely opt out of SS, squander the money instead of investing it, and face a miserable retirement. And all I would say is, so? Adults make choices, and are free to do so and face the consequences of those choices. If someone decides to live it up now and is near broke at retirement, that's their choice. My choice is to live frugally now, and have a good amount saved retirement. I shouldn't be punished for that. The gov't is no one's mommy or daddy.
 

JTsyo

Lifer
Nov 18, 2007
11,816
952
126
US GDP 2010 was 14.66 trillion, budget was 3.6 trillion. So a 24.5&#37; flat tax should be all that's needed to balance the budget. hmm does everything that contribute to GDP get taxed?
 

fskimospy

Elite Member
Mar 10, 2006
85,586
50,771
136
If the left would stop rewarding stupid behavior, liking failing to fund your own retirement or buying far more house than you could ever afford with a neg. ARM, maybe we'd get less of it?

You're probably right that if given the option, quite a few people would likely opt out of SS, squander the money instead of investing it, and face a miserable retirement. And all I would say is, so? Adults make choices, and are free to do so and face the consequences of those choices. If someone decides to live it up now and is near broke at retirement, that's their choice. My choice is to live frugally now, and have a good amount saved retirement. I shouldn't be punished for that. The gov't is no one's mommy or daddy.

All I can say to that is that your preferences for a country to live in don't mesh with the preferences of the vast majority of Americans. Very, very few people want to go back to the days of mass poverty for the elderly, and Social Security is one of the most popular programs the nation has ever known.

So, what I guess I'm trying to say to you is that adults DO make choices, and the adults of America chose that we would prefer it this way. Unfortunately for you that puts you in a situation you may not like, but it's part of the fee for admission to live in America. The government is whatever we want it to be, and this is it.
 

Throckmorton

Lifer
Aug 23, 2007
16,829
3
0
US GDP 2010 was 14.66 trillion, budget was 3.6 trillion. So a 24.5&#37; flat tax should be all that's needed to balance the budget. hmm does everything that contribute to GDP get taxed?

That would make my total tax rate about 37%. Is that even including SS and Medicare? :thumbsdown:
 

Matt1970

Lifer
Mar 19, 2007
12,320
3
0
Reduce deficit by $4 Trillion over 12 years. At the very least, it means a balanced budget and not adding to the deficit, which is better than now. Considering how long it's taken to rack up the $14 trillion (?) deficit, 12 years to reduce almost a third seems "reasonable".

So in 12 years we will have $14 trillion more in debt rather than $18 trillion. Ya, that sounds like good economics.
 

GTaudiophile

Lifer
Oct 24, 2000
29,767
32
81
I don't think raising corporate taxes is a solution as ours are already currently high.

I would suggest lowering them, close the loopholes, and then make sure they are paid.
 

matt0611

Golden Member
Oct 22, 2010
1,879
0
0
And yet those "real conservatives" voted for Reagan. They voted for Bush. They'll vote for Romney in 2012. They'll vote for Pawlenty in 2016. They'll vote for Christine O'Donnell in 2020.

I call shenanigans on this "real conservative" bullshit.

Reagan talked and said all the right things, even Bush talked about less government and an end to nation building.

Go back to Bush in 2000, he sounded the complete opposite of what he became.
Yes, true conservatives were had by Bush and the republicans of 2000-2006.

I don't blame true conservatives for voting for them initially though, but I do blame them for the continued support of him and the same people who helped perpetuate and even increase big government.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
All I can say to that is that your preferences for a country to live in don't mesh with the preferences of the vast majority of Americans. Very, very few people want to go back to the days of mass poverty for the elderly, and Social Security is one of the most popular programs the nation has ever known.

So, what I guess I'm trying to say to you is that adults DO make choices, and the adults of America chose that we would prefer it this way. Unfortunately for you that puts you in a situation you may not like, but it's part of the fee for admission to live in America. The government is whatever we want it to be, and this is it.

Except they don't actually want to pay for all those programs, hence deficit spending by both parties for a majority of the years of my lifetime, and I'm no kid anymore. It's all fine and dandy to claim everyone loves all these programs, but if they love them so much, why won't they pay for them? Personally, I'd love a Ferrari and a vacation home in the Bahamas, but I'm not actually willing to spend money for these things, so I guess I can't love them that much. I'm OK with living in a county with a generous social safety net, but NOT OK living in a county that dumps the cost of that net on future generations - that's just unethical. Being generous with other people's money isn't real charity.
 

fskimospy

Elite Member
Mar 10, 2006
85,586
50,771
136
Except they don't actually want to pay for all those programs, hence deficit spending by both parties for a majority of the years of my lifetime, and I'm no kid anymore. It's all fine and dandy to claim everyone loves all these programs, but if they love them so much, why won't they pay for them? Personally, I'd love a Ferrari and a vacation home in the Bahamas, but I'm not actually willing to spend money for these things, so I guess I can't love them that much. I'm OK with living in a county with a generous social safety net, but NOT OK living in a county that dumps the cost of that net on future generations - that's just unethical. Being generous with other people's money isn't real charity.

Social Security has been fully funded for the entirety of your life. (and likely will be so for the rest of it, even with no changes to its structure)
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
102,357
8,446
126
So in 12 years we will have $14 trillion more in debt rather than $18 trillion. Ya, that sounds like good economics.

that's assuming revenue doesn't pick up and we continue in economic malaise.


Social Security has been fully funded for the entirety of your life. (and likely will be so for the rest of it, even with no changes to its structure)

social security is NOT fully funded. it is pay as you go.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
Social Security has been fully funded for the entirety of your life. (and likely will be so for the rest of it, even with no changes to its structure)

That's just playing semantics games. To pretend SS taxes are somehow going into a different fund other than general revenue is just a charade, as the US Supreme Court noted many years ago. It all goes into, and comes out of, general revenue, which will of course always be more than SS pays out by itself, so you might as well claim it's funded forever.
 

werepossum

Elite Member
Jul 10, 2006
29,873
463
126
Social Security has been fully funded for the entirety of your life. (and likely will be so for the rest of it, even with no changes to its structure)
Fully funded with IOUs is NOT fully funded. Social Security is indeed pay as you go, always has been, always will be. Reagan established the lock box, but it's merely accounting.
 

fskimospy

Elite Member
Mar 10, 2006
85,586
50,771
136
That's just playing semantics games. To pretend SS taxes are somehow going into a different fund other than general revenue is just a charade, as the US Supreme Court noted many years ago. It all goes into, and comes out of, general revenue, which will of course always be more than SS pays out by itself, so you might as well claim it's funded forever.

No, it's not playing semantics games, it's reality. Social Security benefits are taken out of current year Social Security paycheck deductions. Under current law, with exceedingly modest projections for economic growth, this will continue until a minimum of 2017 merely based upon paycheck deductions, and through 2025 if everything is taken into account.

If you would like to mention the somewhat incestuous nature of excess social security payments being invested in US bonds, which indirectly finances other debt through creating demand for such bonds... okay. Doesn't change the fact that the program has been fully funded for around 80 years now, and with some minor tweaks can be fully funded in perpetuity.

If you're going to attack unsustainable entitlement programs, Social Security probably isn't the right one to do, it works pretty well.
 

JimW1949

Senior member
Mar 22, 2011
244
0
0
One way to generate more revenue is to make changes in the tax structure in-so-far as "who" we tax and "how" we tax the people. For example, if a single mom with two jobs goes to the pharmacy and buys a bottle of cough syrup for her child, she gets charged sales tax on that cough syrup. If someone pays $5,000 for an exclusive country Club membership, they don't pay sales tax. Why is that? If we were to take a long hard look at how we tax people, I am quite certain we could raise a lot more revenue and it would actually make more sense than what it does now. What I am suggesting would be on a State level and not necessarily on a Federal level, although I am pretty sure it could done on a Federal level as well.
 
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manimal

Lifer
Mar 30, 2007
13,559
8
0
No, it's not playing semantics games, it's reality. Social Security benefits are taken out of current year Social Security paycheck deductions. Under current law, with exceedingly modest projections for economic growth, this will continue until a minimum of 2017 merely based upon paycheck deductions, and through 2025 if everything is taken into account.

If you would like to mention the somewhat incestuous nature of excess social security payments being invested in US bonds, which indirectly finances other debt through creating demand for such bonds... okay. Doesn't change the fact that the program has been fully funded for around 80 years now, and with some minor tweaks can be fully funded in perpetuity.

If you're going to attack unsustainable entitlement programs, Social Security probably isn't the right one to do, it works pretty well.

And wildly popular...wheres spidey with his will of the people mantra?