Senator Ron Wyden (D-Ore.) has released a plan to devote additional revenue to the Social Security Trust Funds. Unlike the Social Security 2100 Act pending in the House of Representatives, Wyden's plan would rely upon increases in taxes upon capital gains rather than increases in the F.I.C.A. taxes. Also, Wyden's plan, unlike the House plan or Senator Warren's plan, does not call for an increase in Social Security benefits.
Wyden's plan is particularly important because he is the Ranking Member of the Senate Finance Committee. There's no way that any of these plans pass unless Democrats take the Senate as well as the House of Representatives and the White House in next year's election. If that happens, Wyden stands to become Chairman of the Senate Finance Committee, the Committee that has jurisdiction over both taxes and Social Security, making his views crucial.
I understand the short term political reasons for using capital gains taxes rather than increased F.I.C.A. taxes to shore up the Trust Funds; however, in the long run Social Security is safer if it is financed through payroll taxes, making workers feel that Social Security is an earned right. That was the genius of Franklin Roosevelt. It's kept Social Security safe for 84 years. Don't mess with success.
More taxes....woo hoo!
ReplyDeletePonzi Scheme
Anon 1:52 No just more taxes for the super rich. The rich, for far too long, have been using loopholes to avoid paying their fair share of taxes. Would they have to pay a little more than the average earner? Probably. But it is fair share because they simply can afford it.
ReplyDeleteE.g. Let's say the tax rate goes up to 40 percent. 1 wage earner makes $50K per year and the other $1 million per year. The lower wage earner will feel the tax rate much more than than the millionaire. The first is left with $30K and the other $600K. Who can afford this tax rate easier?
A little perplexed when talking about raising the FICA taxes. Not sure if you meant raising the percentage (e.g. currently 6.2% each for employer and employer) or raising the Social Security wage base (e.g. currently $132,900).
I believe raising the Social Security wage base is the first step. Not exactly sure why this is even in place. Seems like if this was increased to say $150K or $200K that could provide a lot more income.
This way, nobody can cry there is no equality. In fact, those making over $132,900 per year are getting a break. It evens this up.
Raising the Social Security wage base makes the most sense. I don't understand why we haven't done this already.
ReplyDeleteI'm so sick of people ripping on rich folks to pay "their fair share." Guess what? The top 20% of the population already pays 84% of the taxes, and this year that will rise to 88%. How is that not fair? Hell, 45% of the population pay no tax at all. How is that fair? And just because rich folks can "afford" to pay more in tax doesn't make it right, especially when they already pay way more than everybody else.
ReplyDelete"Marginal utility," my friend. Someone who makes $40K/year has very little disposable income after paying for basic necessities and can ill-afford to surrender it to taxes. If you take a percentage of what little he has left, it has a significant impact on his quality of life.
DeleteThe same is not true of someone making, say, $500K/year. That person can already afford a nice house, nice cars, a retirement fund, a college fund, country club dues, vacations, etc. If you take a percentage of what that person has left, his quality of life is only minimally affected - maybe he opts for a pontoon boat instead of a yacht.
You may not agree that marginal utility is a solid argument for progressive taxation, but many people do. It may be the only thing preventing a full-scale revolution. If the system collapsed under the weight of growing inequality, the rich would have the most to lose.
I dont understand why they didnt do it more often and higher for the largest cohort knowing this day would come.
ReplyDelete8:01, the top 20% of Americans have 93% of the wealth, so I am totally ok with them paying more than 84% or even 88% of the taxes. They should be paying at least 93% of the taxes.
ReplyDeleteYou're right that it's not fair that 45% of Americans are so poor that they have no tax liability. It would be great to have better-paying jobs; more government investment in things that would lead to more jobs, like maintaining and improving broadband internet, roads and bridges, national parks, and universal child care; more job training and vocational rehab programs, etc. But those cost money. And I'm perfectly fine with getting the money from the richest people.
@8:01
ReplyDeleteLiterally not even 1% pay no taxes. Unless you are in a coma, you pay taxes. You are talking about income tax. Plenty of impoverished people, even unemployed people, pay taxes through sales, property, and other forms of taxation.
I also disagree with the use of the term "fair" because fairness has nothing to do with taxation. Rich people should pay more, because they can afford to pay more. Poor people pay less, because they can't afford to pay more. That may not be fair in your opinion, but that is irrelevant as taxation has nothing to do with "fairness," it has to do with what level of social safety net is appropriate and what source(s) of funding for the social safety net can be implemented while maintaining economic sustainability and competitiveness.
If a poor person loses 20% of their income, that's a larger portion of their disposable (i.e. spendable) income, which reduces sales, which hurts the economy. If a rich person loses 20% of their income, that's a small portion of their disposable income, because after an individual's immediate needs are satisfied, and they buy some luxuries, they generally sit on the remainder, which doesn't result in sales, which again hurts the economy.
801, check out Jean-Jacques Rousseau's The Social Contract and follow his trail all the way to 1789, well after his death. Those with an attitude like yours should hope they are living in a gated community if history repeats itself as it is prone to do. But then again make sure you pay your security guards well.
ReplyDeleteI think that the government should raise taxes on people who are richer than me, and then give me free stuff.
ReplyDeleteI always love the doomsday "system collapse" stuff and even more the "revolution" stuff. Like Americans would get off the couch to do something.
ReplyDeleteWarren Buffet said that he and his secretary paid taxes at the same rate as he did which he didn't consider fair. This was before the latest round of tax cuts.
ReplyDeleteRaise the social security wage base. Easy.