You save 6.2% on any income above 110,000, correct. You don't have to do anything, it's automatic.
Although i think the rate starting in 2011 is 4% but the employer is still paying 6%
You realize their benefits are also capped at 110K?
You save 6.2% on any income above 110,000, correct. You don't have to do anything, it's automatic.
Although i think the rate starting in 2011 is 4% but the employer is still paying 6%
Utter goobledegook of obfuscation. You're claiming that the income tax system should compensate wealth holders for the inflation losses to principal rather than inflation losses to income.
Income taxes are about income, not principal. Even assuming that the rest of the country wants to advantage wealth holders in such a fashion, your numbers don't add up. At a 7% rate of return & a 15% tax rate, inflation would have to exceed 5.95% for an investor to lose value. That'd be 4.55% inflation at 35% tax rate. Vanishingly few Americans will ever pay 35% federal tax on any portion of their income, anyway.
None of that applies to the 15% carried interest tax rate paid by hedge fund & PE managers, whose 2 and 20 compensation often means that the rate of return on their own money is in hundreds of percents...
You realize their benefits are also capped at 110K?
leave it up to the states!
For social security, it doesn't matter. For crimes, the Confederation shall be bring the fugitive from justice back to the jurisdiction in which the original crime was committed.What happens if you cross state boundaries.
For social security, it doesn't matter. For crimes, the Confederation shall be bring the fugitive from justice back to the jurisdiction in which the original crime was committed.
leave it up to the states!
For social security, it doesn't matter. For crimes, the Confederation shall be bring the fugitive from justice back to the jurisdiction in which the original crime was committed.
Affects 100% of poor and middle class workers . . . and starting at 110,000 you get a 6.2% tax break! What happened to the rich paying their fair share? Why not tax ALL earned income at 2% or some other lower figure. . Sounds equitable for everyone. A tax cut for the poor/middle-class and we could probably maintain the same level of revenue if not more. Since the employers would also be on the hook for more taxes paid, they'd consider that when giving 15 million dollar salaries to the CEOs . . . well maybe
I think a better question is, why are we still even paying it if it's going to collapse in the near future (most will never benefit at all)
I don't get why SS is set up like a pension where what you get is based on what you put in. It's not a pension. Beneficiaries are getting money paid in by current workers.
I was saying everything should be left up to the states. I just decided to say it in this thread.in this SS thread?
You realize their benefits are also capped at 110K?
Sure, raise the limit on both. And since it's effectively welfare, make it so if you make more than a certain amount, or have more than a specific amount of wealth, you're inelgiable to receive it. Then it's more truely like a tax. Rich people don't need it anyway righT?
I don't get why SS is set up like a pension where what you get is based on what you put in. It's not a pension. Beneficiaries are getting money paid in by current workers.
Social Security is a regressive tax
I think a better question is, why are we still even paying it if it's going to collapse in the near future (most will never benefit at all)
You save 6.2% on any income above 110,000, correct. You don't have to do anything, it's automatic.
Although i think the rate starting in 2011 is 4% but the employer is still paying 6%
Because inflation losses only kick in OVER TIME. If you get you paycheck and spend it almost immediately as most people do then there is no inflation loss right?
Because wages lag inflation. If a worker gets a 3% wage increase at the end of a year of 3% inflation, they experienced a loss of value of their paychecks in the meanwhile. They're playing catch-up, if they even get that in today's wage environment.
Very wealthy people spend only a small part of their incomes, anyway, re-invest the rest, so a great deal of their losses to inflation are merely slowing of growth of their principal holdings. As I offered above, inflation needs to be very high for investors to actually lose value even at a steep tax rate of 35%.
Because wages lag inflation. If a worker gets a 3% wage increase at the end of a year of 3% inflation, they experienced a loss of value of their paychecks in the meanwhile. They're playing catch-up, if they even get that in today's wage environment.
Let's say I had $100M in working assets earning 7%. Let's say I'm not leveraged at all, which is highly unusual. That's $7M/yr. Say I paid 35% in taxes, leaving $4.55M, and that inflation was 3%, so I'd want to increase my working capital by $3M. I still have $1.55M, which is $129K/mo to live on. At the current 15% tax rate, I get $246K/mo, making it unlikely I'll spend it all, even if I try. Boo-hoo.
Children under 18 where the working parent has died or is disabled are eligible for SS support.
You have glossed over the difference between expected and unexpected inflation. Expected inflation is implicitly built into the employee's salary before the year even start. The lag you've identified only screws him in the case of unexpected inflationRiiiight. That's why we've had decoupling for the last 30+ years' and why median family income & below as as % of GDP has shrunk...
Why are you choosing 7% as the rate of the return? The 10 year treasury bond currently yields 1.6%, well below actual inflation. People shouldn't be required to invest in risky assets just to recover the cost of inflation plus taxes. The larger issue is that the Fed is financially repressing savers by imposing negative real interest rates. Taxing the minimal nominal returns puts them further behind and adds insult to injury.
7% is the average rate of return in the stock market over many, many years. Your notion that the Fed is suppressing savers is hogwash, because what we're experiencing is a liquidity trap of saving & a flight to safety among investors. Yield on govt securities is low because demand is high, not for any other reason, and yield for savers follows the same rationale. It's about expectations of future inflation & perceived risk wrt other investments. Corporate cash reserves are enormous as well.
Nobody is "required" to invest in anything, btw.