»

Are You for Raising Taxes for This?

What do you think? Are you in favor of more taxes to help with Social Security? What’s the best way forward? What is your age?

From AP:

WASHINGTON (AP) – Most Americans say go ahead and raise taxes if it will save Social Security benefits for future generations. And raise the retirement age, if you have to.

Both options are preferable to cutting monthly benefits, even for people who are years away from applying for them.

Those are the findings of a new Associated Press-GfK poll on public attitudes toward the nation’s largest federal program.

Social Security is facing serious long-term financial problems. When given a choice on how to fix them, 53 percent of adults said they would rather raise taxes than cut benefits for future generations, according to the poll. Just 36 percent said they would cut benefits instead.

The results were similar when people were asked whether they would rather raise the retirement age or cut monthly payments for future generations – 53 percent said they would raise the retirement age, while 35 percent said they would cut monthly payments.

“Right now, it seems like we’re taxed so much, but if that would be the only way to go, I guess I’d have to be for it to preserve it,” said Marge Youngs, a 77-year-old widow from Toledo, Ohio. “It’s extremely important to me. It’s most of my income.”

Social Security is being hit by a wave of millions of retiring baby boomers, leaving relatively fewer workers to pay into the system. The trustees who oversee the massive retirement and disability program say Social Security’s trust funds will run out of money in 2033. At that point, Social Security will only collect enough tax revenue to pay 75 percent of benefits, unless Congress acts….

About 56 million people get Social Security benefits. Monthly payments average $1,236 for retirees.

The options for fixing Social Security fall into two broad categories – raising taxes or cutting benefits, or some combination of the two. But there are many options within each category. For example, raising the retirement age is a benefit cut for future generations, because they would have to wait longer to qualify for full benefits….

The poll involved landline and cellphone interviews with 1,006 adults nationwide. Results for the full sample have a margin of sampling error of plus or minus 3.9 percentage points.

About Scot McKnight

Scot McKnight is a recognized authority on the New Testament, early Christianity, and the historical Jesus. McKnight, author of more than fifty books, is the Professor of New Testament at Northern Seminary in Lombard, IL.

  • http://bobhyatt.me Bob Hyatt

    I’m 42 (almost 43). I’m not in favor of raising taxes for this. Somehow, Social Security has morphed in the American consciousness from a program meant to keep the aged from destitution into a pension plan the middle class and even the rich have come to feel entitled to.
    I’m for extending the retirement age (slowly) and for means testing. There’s no reason the well off should be allowed to tap into this.
    Unless we privatize or move to another system where it’s more of a bank account and what you put in is what you should expect, the whole thing is a basic pyramid scheme that eventually collapses, as more and more take out more than they put in.
    The only way to extend solvency is to get back to seeing it for what is what intended to be- a social safety net for those who need it, not a retirement account.

  • Larry Barber

    How is it we can always find money for war fighting, but can’t find it for those who are sick or elderly?

  • http://Paroikos.com Rob

    I’m not in favor of raising taxes for ANYTHING because we haven’t learned how to stop spending yet! The current Social Security dilemma is case and point. Do you know HOW we got into this mess in the first place? Anybody? It’s because Congress has constantly taken funds (they say borrowed, but when is it really going to be paid back?) to pay for other spending. This is STILL going on. Not only that, but they are STILL borrowing money to pay for more and more spending. No. No more raising taxes until Congress goes to rehab for their spending addiction!

  • Gloria

    I agree with Rob.

  • http://seldomwrong.blogspot.com SWNID

    This question represents a false choice: either “raise taxes” or “cut benefits,” as if those are the only alternatives. One can lower spending elsewhere, needs-test benefits, raise or remove the cap on FICA taxes, change the formula by which cost-of-living increases are granted, and of course raise the age of retirement at which “full benefits” are paid.

    Politically those are tough moves ostensibly because they change the original character of Social Security as an equal entitlement. Or maybe we should say the founding myth of Social Security.

    Really, though, the political problem with these moves is that they erode the ability of one party to attack the other for seeking to “change Social Security as we know it.” Of course, people know that Social Security as we know it, an unsustainable pyramid scheme, has to change, but the political tactic is to make the public fear that the change will be even worse than the status quo.

    That tactic is effective because people really believe that presently government can only make things worse. That belief is arguably warranted given recent experience.

  • http://timdedeaux.com Tim Dedeaux

    I think the first step is to raise the maximum income limit that gets taxed (currently, anything over $250,000 has no SS tax). The second step would be to raise the retirement age. The final step would be to increase taxes on the bulk of the working class.

    Social security needs to be there, I think. And privatizing a part of it may be worthwhile, but the last thing we need to do is raise taxes on the average working family. I think.

  • Rick B

    I don’t disagree with the notion of raising the retirement age. I’m close to that and would just as soon keep working, but businesses are often loathe to keep older workers on the payroll, they are often perceived as higher paid and less productive and creative, and if they find themselves out of work have a difficult time finding any that is meaningful or lucrative.

  • Brian S

    Raise taxes how much? The unfunded liabilities of medicare and Social Security are so great that tax rates would have to be about 75% for the wealthy and 50% for everyone else, including the 45% who pay no federal income tax at all. This problem cannot be solved by bumping up rates a bit and pushing up the retirement age (which should be done). I am 54.

  • http://davidbrush.com David Brush

    Both of my parents are on on the verge here, and as it stands now (after 40+ years in the ministry) their social security will be their safety net. You would be surprised (or not) how hard it is to find a church that will hire a pastor over the age of 60 these days…

    My first answer is I don’t like either option; it feels like the false dichotomy SWIND mentions.

    I know for my age I want to be able to invest my money in private accounts and rely on the free-market since I can handle the risk better. I also realize that IF that was the case folks like my parents might not get anything.

    Something I have been considering lately is a play on what a ‘balanced’ budget means. Even if we get a ‘balanced’ budget in which we take in what we spend will it still be ‘balanced’ or will it end up looking like 75% defense and corporate subsidies and 25% education/foreign aid/medicare/social-security. I don’t think that is a ‘balanced’ budget either…

  • fb

    i agree with much of what’s been said here. no, i wouldn’t favor raising taxes to keep social security ‘as-is’ — partly because the system is being BADLY (even criminally) mismanaged right now, partly because the demographics indicate that it wouldn’t be sustainable, even if it were managed properly. the STRUCTURE of the system needs to be changed, and that goes doubly for medicare. there is a justice issue here in the increasing transfer of wealth from one generation to another.

    i share larry barber’s (#2) frustration and david brush (#8) intimation that we are too-heavily weighted toward military spending. in partial answer to larry, i would say that up to this point, we’ve always been able to borrow to finance whatever we wanted, including wars. but with our massive and ever-increasing debt, that privilege could end at any time.

    imo, it’s time to prune back the scope, power, and expense of the federal government (both at home and abroad) in a significant way.

  • Ron Newberry

    i am 58 and am against raising retirment age. I have been in the ministry 30 years and ready to retire in 6 or so years. Don’t want to be doing this at 70.

  • kent

    I am 57 years old and I would support raising the retirement age to 70. our age spans have grown so why raise the age? As far as raising taxes, I would support that only if the addition fund and all funds for SS could not touched for any other purpsoed.

  • Marshall

    I would rather spend money on social security rather than go on increasing the military budget. If people in far-off countries can’t afford to buy bombs and other weapons and hire military contractors for themselves, they should just learn to do without.

    I am also in favor of aid to dependent children, universal health care, vocational and other educational training for all. I don’t have any problem at all with sharing out of my wealth, for which I am humbly grateful, to support such things.

  • Stephen

    @ Marshall – here is the website where you can give voluntarily out of your wealth. http://www.ssa.gov/pgm/donations.html I’m afraid though that your money will be robbed from the system long before I get there. I do appreciate your humble generosity (even if it is going to a broken system). Just please don’t be generous with my money, I’d rather be the one to decide what to do with that. Thanks!

    Stephen (34)

  • Buck Eschaton

    I have the understanding that the U.S Federal Govt. is monetarily sovereign, and that there isn’t and cannot be a shortage of money. The Govt. can spend money into existence and that taxation does not fund the Federal government, taxes only control inflation, so the Fed Gov does not need to raise taxes to fund or increase the funding for SS.

  • James

    Cut the military budget by half and problem is solved. For a country with thousands and thousands of nukes, to what degree does the U.S. economy need to be dependent on war?

  • Tom Howard

    Tell me now….Has borrowing and then a bit more borrowing ever solved your problems with your household budget, or for that matter your churches budget….Yes, I thought not. And it won’t do it in with a Government, no matter who is running it, when there jobs depend or borrowing and spending. Nor how justified the reason. There will always be another justifiable reason for more. So a little tax rise today….then a little tax rise tomorrow and forever, until every body is taxed to the limit, free enterprise has moved someplace else and the government falls into anarchy because the people want more and there is no more. It is complicated. Wish I had an answer. But as for me…no on more taxes. We have to be smart enough to figure this out.

  • RobS

    I still like the private account idea the politicians shot down in Bush 43′s term. As I’m 37 years old, I have yet to find any wise person recommend putting 100% of their money in a cash/interest bearing type account for 40-50 years and expecting a reasonable return (akin to the style of the social security system). This method would need to be eased in, but I would happily take diversified market return over the treasury bill/bond investments currently. The worst 35-year rolling returns (for the Dow Jones Industrial Average) have still be just above >6% annual.

    A few quick calculations: 12% (contributions of employer & employee) of a $40k salary ($4800/year) with NO raise in that time, 35-year run & with a 6% annual return is >$500,000. The same for a 45-year run at 6% is over a million bucks. That’s worst return. And that $4800 is going into Social Security today so it’s not really a new tax as much as it’s just a new way to deploy it.

    12% contribution of a $100k salary (let’s pick a well-off earner) so $12k/year with NO raise in 45-year working history at 6% return and we’re talking near $2.55 million. If someone had that, could they share a bit with someone else too? I’d hope they could.

  • James Neely

    I have read all of the above comments and find that I disagree with many. The answer to the problem will require the wisdom of Solomon, and commitment of the Lord to His mission. Two irrefutable points are: the problem has to be solved, and there is no solution that will satisfy everyone, or perhaps not even a majority of the people.
    Some facts to consider;
    1. I am 85 years old.
    2. I was in the work force full time for some 38 years, from 1950 to 1988, then part time for about 6 years after that.
    3. During that time the government TOOK from me and my employer approximately $82,000. For that I was promised certain benefits.
    4. The government has already started reneging on the promised benefits by collecting income tax on part of the SS paid to me.
    5. When I die I guess there is some paltry amount paid as death benefits, then my family will get no more.
    6. A couple of years ago, I did a set of calculations based on what would be the case if I had been provided the option of putting those funds into a mutual fund made up of the Dow companies at the then year amount and Dow price.. The results are that I could have been paid $40,000 per year (accounting for inflation) since retirement, and if I had died at that the time of the calculation, the remaining portfolio would have been worth approximately $500,000 to my family.
    7. Many of the above comments contain suggestion of means testing to get SS benefits. I strongly object to this further robbery of my “account” just because my family and I have conserved our money and now have additional income from investments. Means testing is just another wealth distribution scheme in the direction popularized by the communist Karl Marx in 1875 “From each according to his ability, to each according to his needs”. (Wikipedia)
    8. We give over 10% of our income to our church, which includes in its budget money to fund benevolent activities. I will not willingly see the return from my FICA “investment” driven to zero so that the bloated federal government, with its great inefficiencies, can broadcast it over the landscape to most all comers, as is currently the case.
    9. My proposed solution include several things:
    a. Increase the retirement age,
    b. Remove the upper limit on which FICA deductions are applicable,
    c. Make an across the board reduction in benefits of, say, 10%.
    Sorry for the length, but it all seemed relevant.

  • James

    Here’s another idea: Give more benefits to all mentally challenged and disabled people. It’ll allow their families to go to work and they’ll create a market for tens of thousands of jobs in health and social work. Thus, more revenue to put into social security.

    *Did I mention to cut the military budget. Support the veterans but no more offensive wars.

  • James

    Oh and I’m part of the millennial generation.

  • Mike M

    The money’s out there. Unfortunately, the vast majority of it is going to the 1% who prosper from government largesse and not the truly needy. There is no “trickle down effect” since the the executives of investment firms, drug companies, agribusinesses, and “defense” firms really don’t care about my mom or your grandma. My mother, who receives a meager income from Social Security is now frantic because she “owes” income tax on it. If that ain’t a stab to the heart of pride then I don’t know what is.

  • Buck Eschaton

    We need Quantitative Easing for the people. The 1% have had their direct cash injections of trillions of dollars into their bank accounts. We can most certainly lower the Social Security age and increase benefits.

  • Bill

    Nope. I do not favor a tax increase for this at all. The program may not be solvent and this should have come as no surprise to anybody. We all saw this coming more than a decade ago and we did nothing about it. Taxing will not fix the problem certainly not with the sword of Obamacare hanging over our heads and which has already started costing us all more money.

    No taxing and privatize it for everybody under 55.

  • Rob Dunbar

    Folks, please understand: this is a demographic problem. It has been in the making for years. Defense spending IS being cut; discrectionary spending IS being reduced. Social Security, Medicare & Medicaid are non-discretionary and together make up something like 60% of federal spending, at $2.293 trillion (see http://useconomy.about.com/od/fiscalpolicy/p/Mandatory.htm). These tax increases are inevitable. It’s time to swallow hard and pony up–or else see the whole thing fall apart.

  • Buck Eschaton

    This is not a demographic problem, it’s simply a problem that the elites want all the money. If a program does not inject cash into the bank accounts of the Elites it won’t be funded. There is no shortage of money and since we live in a fiat economy of a monetarily sovereign nation it is an impossibility that there will be a shortage of money for Social Security.

  • http://LostCodex.com DRT

    There are several misconceptions voiced in this thread. First off, people no longer pay SS tax once their income is above $110,000. This make SS tax one of the most regressive taxes out there. There is zero tax on income over 110.

    But, that also means that the benefits are capped or maxed out when someone has been making 110k a year. So the rich do not get more benefit that a middle class person.

    Additionally, SS was instituted when the life expectancy of the population was much much lower. As people have started living longer it has put a tremendous burden, and frankly the system was not meant to support people for 30 years. It was meant to bridge, on average, the time between when people could no longer work and they died. But many people can still work well beyond the SS age now.

    This shows the life expectanc changes over time.

    http://aging.senate.gov/crs/aging1.pdf

    So, in keeping with the established philosophy of the program, it seems to be obvious that we should increase the age at which benefits start. This has a double effect on the fund since it limits the numbe of years which benefits are paid, and also increases the number of years that many pay in.

    Certainly we should keep the advance payments for those who qualify for disability. That is in keeping with the basic philosophy, to take care of those who cannot work.

    Now addressing the idea of keeping that much of your retirement money in cash, well, we should all be keeping a big chuck of our money in cash. I look at the problem more as we are not saving enough for retirement outside of the SS network. There was an article published recently (did scot post it?) that shows the percent of people’s incomes that went to various things like food, shelter, retirement etc. The stunning finding to me was that the percentages were all pretty much constant across income levels with the exception of retirement savings. The more money you have the higher percentage of that income you save for retirement, all the other items were roughly equal.

    So I can read a lot into that. It seems quite clear that those who are at a lower income level don’t save enough. I can understand that since it is often difficult to prioritize such a long term plan when the kids need their teeth fixed and it it would be nice to buy healthy food.

    SS then comes in with a targeting of exactly the right poplution, those making less than $110 per year. This effectively makes the decision for them and ensures that our country is not going to have a group of devastated people around.

    Should the rich pay more and then not get the benefit? And have more for the poor? I don’t think so since that is not in keeping with the idea behind it.

    Should we tax at a higher rate to get through the baby boomer bust? Perhaps. I would like to see an authoritative trade off between increasing rates and increasing the retirement age.

    I am 50

  • Mark E. Smith

    Reduce fraud, raise the retirement age, and then raise taxes.

  • James Neely

    Another matter not mentioned, the unearned entitlement attitude of a lot of our society. (I say “unearned entitlement” to diffenentiate it from SS and medicare, for which we pay the legislated amount.) There seems to be an attitude on the part of many that they are due to the benefits of labor, it is just that it is the labor of others that they want.
    I specifically remember the time while I was in college that my wife and I had the serious discussion about whether we could afford for her to have a coke with her lunch at work. Cokes cost 5 cents. Try living like that for 30 months and see how much sympthy you have for those who want to live off of the labor of others.

  • http://LostCodex.com DRT

    James Neely, being cheap never changes. I work in a place with a subsidized cafeteria, and they give 20% off if you eat after 1 to help with the crowds, and I do that to save about $1.30 a day :)

  • metanoia

    Mark @ 28: Reduce fraud, raise the retirement age, and then raise taxes.

    I’d add one thing and take away one. Add: Eliminate waste in government all around. Delete: Raise taxes. If you reduce fraud, eliminate waste, and raise the retirement age for those who are currently 50 or younger, you probably won’t have to raise taxes.

    Most people I know are not against paying taxes, they are against fraud, waste, and entitlements without some kind of pay in (workfare) or pay back (community service).

  • Dan Arnold

    For all who think that raising the retirement age would save SS, beware the unintended consequences. As this last recession has shown, if older workers stay employed, there are fewer jobs for younger workers. And since SS is a pay-as-you-go system, we need those younger workers gainfully employed to fund SS for retirees.

    At the same time, for those who want to see these funds invested in Wall Street, remember, we have had a demographic bubble that, when combined with instituting 401(k), have caused a huge bubble in stocks. Demographically, that bubble will be hard to sustain as the Baby-Boomers (at least those who did save something) start to pull those funds out of the market to fund their retirement. As the decade from 2000-2009 showed, stocks do not always go up, even in the long run. Stocks go up when more people are buying than selling (to put it crudely). The other problem with investing retirement into the stock market is that now the government has a vested interest in stocks perpetually going up which will give corporations more sway over public policy.

    I hate to say it, but I think we’re going to have to raise taxes to some extant (at the very least, increase the cap, either on the employee side or on the employer side but not necessarily both) and curtail benefits, possibly in a graduated way where the cuts affect the more well-to-do than the poor.

    Shalom uvrecha

  • Bill

    Here is the data from the CBO regarding tax revenues and entitlement spending of which SS is only a part. You need to take into consideration Medicare, Medicaid. The aritcle itself centers mostly on Medicare but you need to see that tax revenues have been falling since toward the the end of the 20th century. Maybe it’s tax reform we need and not the kneejerk, uncreative, fearful reaction of, “Oh no! We need to raise taxes!!!”

    http://blog.heritage.org/2012/08/25/chart-of-the-week-tax-revenues-devoured-by-entitlements/

  • Buck Eschaton

    My solution would be something along the lines of lower the age to 60 or even into the 50′s. The government would decide to fund it, that’s all it takes. That’s all you need. The Govt. doesn’t need to tax to do this. If we experience inflation because of this the Govt. will tax some of the money out of existence. Specifically unproductive money in tax shelters or that was previously given to the rich. Taxes at the federal level only exist to regulate inflation. The Fed Gov creates money from nothing. That’s why it can conduct Quantitative Easing for the wealthy and bailouts for Wall Street.

  • metanoia

    Dan at 32: ” . . .if older workers stay employed, there are fewer jobs for younger workers. And since SS is a pay-as-you-go system, we need those younger workers gainfully employed to fund SS for retirees.”

    You failed to take into considers that if older workers stay employed, they would continue to pay into SS depositing more actual dollars than younger new employees who would usually earn less.

  • Dan Arnold

    Repent (#35),

    Good point, it might not affect SS in the short run, but unemployed younger workers is still not a good thing.

    Shalom uvrecha,

  • Lord Valiant

    We need only elmininate the cap on income that goes into SSI and tax for the program progressively. Wealthier folk have the money. Older people, even those who were professionals in life, might not have private investments depending on circumstances. Privatize? Hahaha, why on earth? The average person isn’t an investor and pumping Wall Street with trillions more in dumb money would be catastrophic. Institutionally investing the SS trust in the markets would lead to far too much fraud.

    Raising the retirement age is also a horrendous idea. People might be living longer but 70 isnt’ somehow the same as 50 circa 1950- a 70 year old is still a 70 year old and shouldn’t be forced to try to find work- many that old couldn’t work in their field if they wanted to! What is a tradesman or laborer supposed to do at 70?

  • Bill

    Can’t really see any problem with privatizing SS. The belief that the individual is too stupid or not interested enough in making their own investment choices is the thinking of fat government. “The government knows better” is a complete fabrication and lazy thinking. It’s a threat to our freedoms, economic and otherwise.

    Also, no one seems to be able to define the “wealthy”. Who are they and why are they considered wealthy? I think that cap has changed over the years so the definintion of who is wealthy seems to slide. Lots of folks make over 100K per year. Is that gross or net? When will it become $95K? When will it become $105K? It’s $250K in some cases. What?

  • Buck Eschaton

    Privatization of Social Security would simply be theft. It would be a license for Wall Street to steal even more. Who could possibly figure out the fees Wall Street would charge, and with all the LIBOR-fixing, fixing of municipal bond rates and high-frequency trading algorithms seriously it would just another way to force us to give our money to Wall Street. Another tax on the public by a private industry.
    And really if you study economics you know that taxes do not fund Fed Gov spending. The US govt. is monetarily sovereign, it can spend money into existence. Taxes extinguish money, to prevent inflation. All it takes is for Congress to vote to fund social security at whatever age and level deemed desirable. The current Govt. and Financial Elites want to redistribute all money and power to Wall Street and other industries which have purchased government influence.

  • metanoia

    Lord Valient @ 37: “Wealthier folk have the money.”

    What would give anyone the right to believe that just because someone has something it gives another the right to confiscate it? As has been clearly portrayed, you can take every penny that every “rich” person has and it wouldn’t be enough the present government for more than a couple of months!

    Cut waste, eliminate fraud, eliminate loopholes and fund only the necessary functions of government and we would have a balance budget and as a side effect lower taxes on everyone.


CLOSE | X

HIDE | X