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Re: Tax Debate
Gettin' Schmitty
Joined:
7/20/2008 1:23 pm
From Just barely outside the Beltway.
Posts: 7667
Quote:

SchmitHappns wrote:
Let's get it on!!!!!


This is a long standing and totally pointless argument between those that do not make intelligent political decisions on how to spend tax dollars within proper realms of authority...

...and greedy demagogues that seem to think that all of our roads, schools, police and fire departments, and services just suddenly fell out of someones ass one day, and don't have to be paid for.

As usual...the truth is in the middle...away from the people that are yelling.

Posted on: 2/9/2011 10:32 am
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Re: Tax Debate

Joined:
12/7/2009 7:07 pm
From Charlottesville, Virginia
Posts: 12958
Quote:

eer_4da_beer wrote:
Thanks for the source!

From your link...
Open in new window

The people that have been argued for as "the wealthy" in this thread are those earning more than $250K.

The last bar (I think it's a bar...kinda too flat to be sure) in the income distribution graph from your link is for $100K!

So unless you can show me a graph where the bar furthest to the right is the tallest (or numbers to support such a graph)...I still say that the poor kids die in the name of patriotism while the rich attempt avoid taxes in order to "save America".

Please don't complain because the graph is from 1999...it's your source.

And feel free to do the math with all of the "percentages" and "ratios" before and after 9/11...there is no math to support your claim that someone that dies in Afghanistan tomorrow is "more likely to be wealthy than poor".


The graph from the link is riddled with problems, which is not surprising given that it came from the Heritage Foundation. First, the graph is based on household income, not individual income, so it could mean that 4, 5, more people are living on that income. More importantly and to the point, however, the graph is not based on the actual household income of the military enlistees; it is based on the median household income for households in the zip codes of military enlistees (it says so right on the graph). That is, for each enlistee they did not use the enlistee's household income, but the median income of his or her zip code. I wonder why a right wing think tank would intentionally avoid using the best data? Hmmm.

Posted on: 2/9/2011 11:58 am
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Re: Tax Debate
Makin' it Rain
Joined:
6/12/2010 11:13 pm
From Jacksonville, FL via Parkersburg
Posts: 3634
Quote:

brobison wrote:
You will not make meaningful changes to government spending until you deal with social security and to some extent medicare.

Here is the crock....A LOT of people have paid a LOT of money for a program that is a Ponzi scheme.We are now (this year and going forward through its liquidation) having to make good on these commitments. The money that came in for SS was used to offset poor spending decisions (to some extent) 30, 40 and 50 years ago. Now those poor decisions are coming to rest. Unless SS and MC is addressed government spending will balloon. I hate that because it will be a shock to my parents and others who may be even less able to afford it but that is the fact. You can eliminate all other functions of the government but in a short amount of time you will not be able to service the SS and MC payments.


This is propaganda. SS is fully funded through 2037 with 2.5 trillion dollars. With no changes funding then drops to 78% funded.

The Ponzi stuff is right wing propaganda, not true. It has been and is sustainable.

rd

Posted on: 2/9/2011 12:50 pm
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Re: Tax Debate
Makin' it Rain
Joined:
6/12/2010 11:13 pm
From Jacksonville, FL via Parkersburg
Posts: 3634
Quote:

brobison wrote:
rdwrites,

I have a big problem with your plan. With your plan I will not be able to do any tax planning or any decision making based on tax policy because I have no idea what my rate will be. I can't see anyone wanting that. It also would require special considerations to be padi for in the year they are incurred. So if we get into another war like WW2 we send our boys off to war and send them a bill that uses up all their pay. DOesn't seem right to me. We will NEVER pay off the debt. The debt does not need to be paid off. Every country on earth has debt and will grow their debt. Debt is used to regulate money supply. As money supplyy needs increase debt obligations increase also. The US has had debt since the beginning. Read a bit about Alexander Hamilton and his take on government debt. Places like the UK don't even issue term bonds (ie...10,15,20,30 year bonds) for some of their debt. The UK issues perpetual bonds. You buy one of these with the understanding that it will never be paid back. You are simply paid interest on the money.


Tax planning is for minimizing taxes paid. That's not my concern. Taxes will be minimized when spending is mimimized. It will vary year by year.

We stave off the debt by paying interest. When we stop borrowing money we will pay off the debt as debt comes due over about 30 years.

I doubt we will be able to come up with the money though. So it will be a struggle but of course we have to pay off our debt. People loaned money to us and they expect it back plus interest.

It may just be printed money, but we'll pay it back.

rd

Posted on: 2/9/2011 12:57 pm
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Re: Tax Debate
Makin' it Rain
Joined:
8/2/2010 10:50 am
From Canonsburg, PA
Posts: 4831
Quote:
by rdwrites on 2/9/2011/ 12:50:50 pm

Quote:

brobison wrote:
You will not make meaningful changes to government spending until you deal with social security and to some extent medicare.

Here is the crock....A LOT of people have paid a LOT of money for a program that is a Ponzi scheme.We are now (this year and going forward through its liquidation) having to make good on these commitments. The money that came in for SS was used to offset poor spending decisions (to some extent) 30, 40 and 50 years ago. Now those poor decisions are coming to rest. Unless SS and MC is addressed government spending will balloon. I hate that because it will be a shock to my parents and others who may be even less able to afford it but that is the fact. You can eliminate all other functions of the government but in a short amount of time you will not be able to service the SS and MC payments.


This is propaganda. SS is fully funded through 2037 with 2.5 trillion dollars. With no changes funding then drops to 78% funded.

The Ponzi stuff is right wing propaganda, not true. It has been and is sustainable.

rd



Right wing propaganda? What in the world are you smoking?

First off, this year the SS trust fund ran a deficit. In the past the SS trust fund was THE SECOND MAJOR investor in the national debt. The SS trust fund is now projected to run a deficit from now till depletion. Just a couple of years ago everything was great until 2047. Does anyone see the trend. There is a gross over estimate of growth in the economy. If we continue in the growth mode we are in by next year they will reduce the 2037 number. Ditto for the 78% payout. In its current setup it will not work! It WILL have to be ammended. The SS program was institued as a TAX pure and simple. SS benefits were paid after 65 while the average life expectancy was 62. So half of all Americans would never see a SS payment. Today we give practically anyone SS if they are disabled or 62 or whatever, while life expectancy is 72. Personally I think they should just change the age of to life expectancy plus 3 years and change it every 10 years.

Think SS and Mcare aren't important read this link:

http://www.usatoday.com/news/washingt ... 5-28-federal-budget_N.htm


You thought our current $14 trillion was bad.....Our mouths have made a $59 trillion check that I bet we can't cash!

When the SS trust fund brings one of its special Treasury Bonds to the Treasury Department, the TD has one of 2 options. It can shop the equivelent amount of debt to another investor or it can print money to pay off the debt. While some printing of money is OK and currently I don't see much of a problem, as the trust fund turns in more and more Treasury Bonds this will become a HUGE problem. If the TD decides to turn to the capital markets this will be a pretty significant investment tract. I would find it hard to believe that over the long run it won't to some extent crowd out private investment. This will reduce growth and further compound problems.

I stick by my previous statement of a Ponzi Scheme. A Ponzi Scheme is where new investors (Young WOrkers) give their money to the people who were early investors (Retirees) with the idea that they will reap the benefits of the program, until the point of time where the influx of new investors can not generate enough revenues to pay everyone off (See SS trust fund running a deficit and then paying out on 78% of benies then 70% then 50%.....you get the picture) That is not right wing that is just a fact. I am not a right winger by any stretch. This is by definition a Ponzi scheme. I or you would go to jail for doing this regardless of how long we could successfully pull it off.

In the end it matters not. For this generations retirees SS will be a great program. I don't know how old you are but I am 45. If you are close to my age and below, don't even bother doing the math. I have and it is quite depressing. I will not only not get a good return on my SS investment I will be paid back LESS than what I paid in. But, I guess by your estimation I should be ecstatic to receive 78% benefits during my retirement when they took 12.4% of my pay while I was working. SS is actually a horrible retirement program but a boon to anyone wanting to take advantage of the disability program.

Posted on: 2/9/2011 1:46 pm
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Re: Tax Debate
Makin' it Rain
Joined:
8/2/2010 10:50 am
From Canonsburg, PA
Posts: 4831
By the way I also remember the last time they were going to finally "fix" social security in the late 80's. That is after they finally "fixed" Social Security in the early 70's

If you want this to work you have to arbitrarily change the rules so don't bother counting on that last SS statement you recieved. What you will get will be vastly different.

In terms of sustainability. Let's look how sustainable it has been:

Here is the link:

http://www.ssa.gov/oact/progdata/taxRates.html

The only thing stable and sustainable is the increase in sucking money from the workers.

Am I the only person that remembers the last 40 years? I bet not. For the last 40 years with all the changes to the system we are still talking about insolvency and payout cuts in about 30 years. Anyone who thinks this is stable and sustainable is an idiot.

Posted on: 2/9/2011 1:56 pm
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Re: Tax Debate

Joined:
4/9/2008 12:11 pm
From Wilderness, VA via Hacker Valley, WV
Posts: 14518
I'm saving for my own retirement. I don't expect my government to support me when I retire.

That said, I shouldn't have to contribute to other peoples' retirement.... especially when I won't get what I put in, plus interest.


I'm relatively young and rather ignorant on this topic...can someone please explain exactly what SS was created for?

Posted on: 2/9/2011 2:08 pm
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Re: Tax Debate
Gettin' Schmitty
Joined:
7/20/2008 1:23 pm
From Just barely outside the Beltway.
Posts: 7667
Quote:

brobison wrote:

Here is the crock....A LOT of people have paid a LOT of money for a program that is a Ponzi scheme.


The SSTF is comprised of both funds from workers and employers, and securities to ensure that there is funding when the contributions fall short. It is currently funded until 2042 or 2052 depending on who you ask. This may change as it's solvency is tied to our economic performance as a nation.

The problem (and this is a big bipartisan problem) is that the government keeps borrowing from it, and they have borrowed a lot since the 80's - almost 3 trillion.

You can throw out a red herring like "ponzi scheme" and denegrade SS and MC but that doesn't address the issue that SS is approacing troubled waters due to bipartisan political incompetence/malfesence, not due to any flaw or inpropriety in the system. It would be fine if we could keep our bipartisan hands out of the cookie jar.

My 2 cents anyhow. Frankly if SS folds I am going to take all my paystubs and sue the federal government for fraud.

Posted on: 2/9/2011 2:35 pm
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Re: Tax Debate
Makin' it Rain
Joined:
8/2/2010 10:50 am
From Canonsburg, PA
Posts: 4831
WVisHome,

Social Security was originally setup as a supplement to retirement for people who were having troubles after/during the great depression as a part of Franklin Roosevelts Great Society. Through history other programs were tacked onto the initial purpose like disability, and death benefits. Today social security is more of a social safety net than the retirement supplement that it was originally intended.

I also don't really want my government taking care of me but at the same time at this point I and my company have contributed $148,800. Think of what that would be if I could have invested that money even in CDs. I am only 45 so I will contribute at least another $248,000 in the next 25 years ignoring inflation. That would allow me to make a pretty nice retirement with my 401K money that I have now. It is a point that this is not charity. We paid for this program and we have paid DEARLY for it.

zwaaa,

The borrowing concept is very popular. I also hear older people saying that the government stole SS money. This is not totally correct. While the US government has borrowed money that money is ALL accounted for in non-tradeable Treasury Bonds. They do get interest on this money. I am not sure that I agree that there is a lot of money in this account. The account has about 4 years worth of money in it. It is about $2,5 trillion while payments total about $700 billion per year give or take. Also, remember that while inflation will effect the future payouts, because of the Treasury Bond payment setup it is HIGHLY likeley that this will result in insolvency sooner. You might want to check out that 2050 number it has changed a lot in the last 2 years and will change a lot more while our growth is below 3.5%.

I agree with you about the paystubs! I keep mine too. I think I will turn it over to the postal service to lock up the congress and the president for 400,000,000 counts of mail fraud. That should put them away for a while.

Posted on: 2/9/2011 3:03 pm
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Re: Tax Debate
Makin' it Rain
Joined:
8/2/2010 10:50 am
From Canonsburg, PA
Posts: 4831
rdwrites,

Tax planning is not just for minimizing taxes paid. If you are a corporation you have to create a budget. How can I budget money when I have no clue what this years tax bill will be? There are such things as short term finance. How do I know my short term finance requirements when I have no idea what my tax liability will be. I have to make some sort of payment every 3 months but I have no idea how much. It comes to the end of the year I am going to 1. Pay a dividend or 2. Buyback stock. How much should I buy? Oh shoot I bought too much back.....I have to take out a loan to pay taxes because you jacked up the rate. That is ludicrous. You won't be deciding tax policy for very long. I haven't even touched on the problems with longer term planning based on cash flow and taxes as to whether a project is a go or no go per net present value. I have no idea how to make an accurate prediction of next year let alone the life expectancy of heavy industrial equipment (15 - 30 years).

Posted on: 2/9/2011 3:35 pm
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Re: Tax Debate

Joined:
4/9/2008 12:11 pm
From Wilderness, VA via Hacker Valley, WV
Posts: 14518
It seems to me that SS should be something an individual should be able to "opt-out" of....

If I agree that I'll never use the services, I shouldn't have to contribute. It seems I would be able to fund my own "retirement supplement" or "disability insurance" with that money.

Quote:

zwaaa wrote:
..... Frankly if SS folds I am going to take all my paystubs and sue the federal government for fraud.


You're not alone zwaaa...

Posted on: 2/9/2011 3:41 pm
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Re: Tax Debate
Gettin' Schmitty
Joined:
7/20/2008 1:23 pm
From Just barely outside the Beltway.
Posts: 7667
Quote:

brobison wrote:


I agree with you about the paystubs! I keep mine too. I think I will turn it over to the postal service to lock up the congress and the president for 400,000,000 counts of mail fraud. That should put them away for a while.



Heh...that's awesome!

Posted on: 2/9/2011 4:16 pm
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Re: Tax Debate
Gettin' Schmitty
Joined:
7/29/2008 4:48 pm
From Deadwood, Lakota Territory
Posts: 8425
Quote:

WVisHome wrote:
It seems to me that SS should be something an individual should be able to "opt-out" of....

If I agree that I'll never use the services, I shouldn't have to contribute. It seems I would be able to fund my own "retirement supplement" or "disability insurance" with that money.

Quote:

zwaaa wrote:
..... Frankly if SS folds I am going to take all my paystubs and sue the federal government for fraud.


You're not alone zwaaa...


Logically this makes sense to MANY MANY of us.

But if you are a politician and you start pushing this agenda you will get attacked from ALL sides worse than Sarah Palin ever got attacked!

Unfortunately, this idea, although it has merit, is POLITICAL SUICIDE.

Posted on: 2/9/2011 6:58 pm
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Re: Tax Debate
Makin' it Rain
Joined:
6/12/2010 11:13 pm
From Jacksonville, FL via Parkersburg
Posts: 3634
This is the same situation as the new health insurance. You can say you opt out of it, then you show up at an emergency room needing surgery. What are we supposed to do, let you die because you "opted out" and refused to pay for what everyone needs sooner or later?

SS same thing. It's not retirement. You're supposed to save for your retirement. This is a safety net for when your retirement is underwater and you're not.

Sure, you "opt out" and plan on being independently wealthy due to your sheer genius in investing, but somewhere in all the joblessness and real estate and market crashes some of lost our shirts, along with that retirement portfolio.

SS is enough to pay for a nursing home when you can't. That's all it is. And we can't "opt out" of taking care of you without shooting old indigent people like horses.

So you and a bunch of others are doing fine and don't need it. That's fine. It's not that bad of a return on your money.

rd

Posted on: 2/9/2011 11:29 pm
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Re: Tax Debate
Party Machine
Joined:
10/21/2009 3:30 am
From up in a holler, WV
Posts: 515
rdwrites wrote:
SS is enough to pay for a nursing home when you can't. That's all it is. And we can't "opt out" of taking care of you without shooting old indigent people like horses.


Not even close. Average, per month in a nursing home- $5,000 to $7,000. Medicare does not cover long term nursing home stays but, it will cover short term stays for rehabilitation. Medicare gives you so many "acute days per year and so many "non-acute" days per year. The non-acute days are for inpatient rehabilitation such as physical therapy, occupational and speech therapy if you've had a stroke, major illness or surgery.

Medicare has NO long term nursing home coverage.

Her's how it breaks down if you have to go to a nursing home for the rest of your days: #1. You are responsible for the monthly payments until your liquid assets reach $2,000 or less then, you can apply for medicaid. Once on medicaid, they will cover the majority of your monthly premium at the nursing home but, a significant portion of your SSI also gets paid to the nursing home. For example, you get say, $1,000 a month in SSI, you are allowed $50.00 a month for personal products, toiletries, clothes etc. the rest of your SSI check is paid to the nursing home.

#2. Upon your death, the state will send an estate value form to your executor for them to complete. If your assets exceed a certain amount upon your death, once all debt is paid, the state can come in and seize any and all assets that can be liquidated. Now, this varies if you have a survivng spouse or dependent children but, it's what the state calls the estate recovery unit. If you have a life insurance policy that exceeds a certain amount, that gets paid to the state for medicaid payments to provide care to your previously old, debilitated ass.

The only way to insure that your long term (life) stay at a nursing home will be covered is to purchase nursing home insurance. It's not cheap. Don't depend on SSI or medicare to cover you when you get old. And yes, once you get SS disability, you get medicare insurance regardless of your age. It's a process and will likely be denied a few times if your young but eventually, after a few denials, you'll get it.

Posted on: 2/10/2011 3:52 am
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Re: Tax Debate
Makin' it Rain
Joined:
6/12/2010 11:13 pm
From Jacksonville, FL via Parkersburg
Posts: 3634
It is my observation that there are places that provide a bed and meals for the social security check. It may be an opportunity to make money on the Medicare billing, I don't know.

Bottom line, SS is enough for bed and board for elderly. That's all it was ever intended to be.


Posted on: 2/10/2011 7:47 am
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Re: Tax Debate
Makin' it Rain
Joined:
8/2/2010 10:50 am
From Canonsburg, PA
Posts: 4831
rdwrites,

Once again what is up? I agree it was supposed to be a supplement. At the time it was 1% of my gross. Now it is 6.2% of my gross. The company kicks in 6.2% for 12.4%. My 401K contribution is 6% with a 6% company match. If it is a supplement how about charging me less than my actual retirement. It is absolutely preposterous that ANYONE could defend this program! IT SUCKS! I can get disability insurance and at least double my retirement income for the price that I pay for social security! BUT.....Its nice to know that I can get a crappy bed and a cheap meal. I would say that it is my experience that this is not true. I do taxes for a LOT of elderly who are getting $7,000 per year in SS. That is $583 per month. I don't know where you live but you are not going to eat and rent for $583 per month in Pittsburgh PA and that is a very reasonable location.

Posted on: 2/10/2011 8:27 am
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Re: Tax Debate
Makin' it Rain
Joined:
6/12/2010 11:13 pm
From Jacksonville, FL via Parkersburg
Posts: 3634
a bed and meals in a group home. Very cheap. Subsistence living. That's the point if you have nothing left.

The money drawn monthly could be for 30 years. You have chosen I believe a figure that is from someone who is older and whose monthly draw didn't start out very high and who probably took esrly retirement and only draws a partial SS pay because of that.

SS and Medicare, that is, a safety net for the elderly, is one of the few things that the majority of Americans agree on. You may dislike it, but you will never get anywhere close to a majority to agree with you.

Again, if one is so inclined to plan and execute well for their retirement, the money is not a bad return on the forced withdrawals. It's a solid safety net ensuring people pay for at least the minimal requirements in retirement.

Posted on: 2/10/2011 11:11 am
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