Happy 4th of July to everyone with $291,000 in gross annual wage income! Today is the last day you will contribute to Social Security. For you, Independence Day begins tomorrow, when your take-home pay will jump by 6.2 percent. That’s because only about half of your wage income (50.5%) is subject to the payroll tax withholding for Social Security.
Why don’t we double or triple tax everything? It’s unconstitutional to double taxation, but what the heck I guess Bernie can spend my money more intelligently than I can. NOT!!!
This conversation leaves out the highly progressive nature of the SS benefit formula. Senator Sanders never mentions this in his speeches that the formula pays out proportionally higher benefits to lower and moderate beneficiaries; 90 and 32 cents per dollar vs 15 for upper income retirees. You can read on the SS site here https://www.ssa.gov/oact/cola/piaformula.html To remove the earnings cap would make this an even worse ratio for the wealthy. It would make them even less politically vested in the program as it pushes away from FDR's vision of social insurance towards greater and greater redistribution. Sanders wants the higher earners to subsidize/shoulder the responsibility of funding a retirement for everyone else.
I have to admit that I find this whole discussion about social security taxes to be needlessly confusing. I get the idea that making citizens "buy-in" via payroll deductions gives them a sense of "ownership" that would provoke outright rebellion if ever taken away. The logic starts to break down when folks think that they're somehow entitled to their employers' matching contribution. Social security checks are just money that the gov't wants its citizens to have so that no one lives in penury! Let's not make it any more complicated than that.
I love Bernie, but I have no idea what he's talking about when he wants the rich to pay social security taxes on their full income. The rich don't need the protection against poverty provided by soc. sec., which is why the income level is capped. By all means tax the wealthy but do so with the understanding that the gov't doesn't need their money (it CAN'T and DOESN'T spend it!). The point of taxing the rich is to reduce their political power. Why muck things up by illogically trying to boost their payments into a soc. sec. system that simply doesn't need their money?
Having said this, I wonder if it would be useful to make a distinction between federal gov't money that's SPENT, and gov't money that's SENT. Whether it's paper clips or spaceships, the gov't SPENDS for stuff that it needs or wants. The gov't deals with thousands of vendors nationwide. It can set the price it's willing to pay, even if that means building in a healthy profit margin for, say, defense contractors that it wants to make sure can stay in business. In other words, it's probably true that gov't spending may result in higher costs than necessary but doesn't actually cause inflation.
Soc. Sec. checks, on the other hand, represent money that's SENT to individual citizens who don't have the buying power of the federal gov't to dictate prices. This money ($1.2 trillion last year?) flows into the economy and private enterprise competes for it. Part of what happened during the pandemic was that a lot more money ($3 trillion?) was SENT to citizens (rightly so!) to cushion the calamity of not being able to work. And when the lack of workers led to supply chain problems, the spit hit the fan as lots of money started chasing goods and services that just weren't being produced.
Bottom line is, tax the rich to reduce the deficit if that makes you feel better. But the real reason to do it involves reducing their power. And since the wealthy have a high propensity to save, pulling their money out of the economy won't actually do much to curb the inflation we're currently experiencing.
Why not reduce the price of virtually everything by 50% at retail sale that ends inflation forever and have the FED or some other monetary authority rebate the discount back to the merchant giving it thus macro-economically implementing beneficial price and asset deflation into profit making economic systems??? If you want to tax, tax anyone who then arbitrarily raises their prices at a rate of 100% on any revenue garnered from such anti-social actions and if they're a retailer take away their rebate privileges and if they're any other business model you take away the personal, payroll and corporate tax cuts that would be enabled by other of policies of the new monetary paradigm (a $1000/mo. universal dividend at age 18) that the 50% discount/rebate policy implements.
Stephanie, I know you can do the math of the above policy. MMT exposes a lot of things about our fiat money system that need to be understood, but why not just expose the problems when by changing the monetary paradigm you can solve those problems and enable so much more? Up your game from just the theoretical level (which philosophically aligns with the new paradigm concept of direct and reciprocal monetary gifting...what are large deficits after all but monetary gifts to government contractors and individuals via various programs?) to the level of entire paradigm/pattern change?
Please we need to have an exchange about this. Too many converging crises not to open ourselves to overall beneficial changes.
amazing how many people, at least one, who reads you and doesn’t get it but then there is Bernie who pretends it isn’t so. I wonder what John Yarmouth has to say about Bernie’s proposal. I form one would like a total disconnect but that is wishful thinking.
Please correct me if I’m wrong, but I feel like you would not agree with Senator Sander’s assertion that the Social Security expansion is needed in order to “make Social Security solvent for the next 75 years.” As a currency issuer the federal government can always meet their debts — correct? If the Social Security expansion is not needed for solvency, then what would the primary benefit be? Would the primary benefit be to take a step to close the income inequality gap?
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
Why don’t we double or triple tax everything? It’s unconstitutional to double taxation, but what the heck I guess Bernie can spend my money more intelligently than I can. NOT!!!
Hopefully you won't have to keep flogging this horse for ever. Surely the light will come? Not holding my breath. Thanks as usual for the clarity.
What can you tell us about why Bernie is ignoring MMT?
This conversation leaves out the highly progressive nature of the SS benefit formula. Senator Sanders never mentions this in his speeches that the formula pays out proportionally higher benefits to lower and moderate beneficiaries; 90 and 32 cents per dollar vs 15 for upper income retirees. You can read on the SS site here https://www.ssa.gov/oact/cola/piaformula.html To remove the earnings cap would make this an even worse ratio for the wealthy. It would make them even less politically vested in the program as it pushes away from FDR's vision of social insurance towards greater and greater redistribution. Sanders wants the higher earners to subsidize/shoulder the responsibility of funding a retirement for everyone else.
I have to admit that I find this whole discussion about social security taxes to be needlessly confusing. I get the idea that making citizens "buy-in" via payroll deductions gives them a sense of "ownership" that would provoke outright rebellion if ever taken away. The logic starts to break down when folks think that they're somehow entitled to their employers' matching contribution. Social security checks are just money that the gov't wants its citizens to have so that no one lives in penury! Let's not make it any more complicated than that.
I love Bernie, but I have no idea what he's talking about when he wants the rich to pay social security taxes on their full income. The rich don't need the protection against poverty provided by soc. sec., which is why the income level is capped. By all means tax the wealthy but do so with the understanding that the gov't doesn't need their money (it CAN'T and DOESN'T spend it!). The point of taxing the rich is to reduce their political power. Why muck things up by illogically trying to boost their payments into a soc. sec. system that simply doesn't need their money?
Having said this, I wonder if it would be useful to make a distinction between federal gov't money that's SPENT, and gov't money that's SENT. Whether it's paper clips or spaceships, the gov't SPENDS for stuff that it needs or wants. The gov't deals with thousands of vendors nationwide. It can set the price it's willing to pay, even if that means building in a healthy profit margin for, say, defense contractors that it wants to make sure can stay in business. In other words, it's probably true that gov't spending may result in higher costs than necessary but doesn't actually cause inflation.
Soc. Sec. checks, on the other hand, represent money that's SENT to individual citizens who don't have the buying power of the federal gov't to dictate prices. This money ($1.2 trillion last year?) flows into the economy and private enterprise competes for it. Part of what happened during the pandemic was that a lot more money ($3 trillion?) was SENT to citizens (rightly so!) to cushion the calamity of not being able to work. And when the lack of workers led to supply chain problems, the spit hit the fan as lots of money started chasing goods and services that just weren't being produced.
Bottom line is, tax the rich to reduce the deficit if that makes you feel better. But the real reason to do it involves reducing their power. And since the wealthy have a high propensity to save, pulling their money out of the economy won't actually do much to curb the inflation we're currently experiencing.
Thanks for the reminder!! Couple policy pieces I've written describing similar approach on Social Security.
- Op-ed: Half of Americans have no retirement savings — here’s how Congress can look out for them. https://www.washingtonexaminer.com/opinion/op-eds/theres-a-way-to-save-social-security-but-it-involves-taxing-the-rich
- Growing inequality has shrunk Social Security’s tax base. Revitalizing it could restore solvency without cutting benefits. https://www.inequalityink.org/resources/Soc%20Security%20shrinking%20tax%20base%204.pdf
Why not reduce the price of virtually everything by 50% at retail sale that ends inflation forever and have the FED or some other monetary authority rebate the discount back to the merchant giving it thus macro-economically implementing beneficial price and asset deflation into profit making economic systems??? If you want to tax, tax anyone who then arbitrarily raises their prices at a rate of 100% on any revenue garnered from such anti-social actions and if they're a retailer take away their rebate privileges and if they're any other business model you take away the personal, payroll and corporate tax cuts that would be enabled by other of policies of the new monetary paradigm (a $1000/mo. universal dividend at age 18) that the 50% discount/rebate policy implements.
Stephanie, I know you can do the math of the above policy. MMT exposes a lot of things about our fiat money system that need to be understood, but why not just expose the problems when by changing the monetary paradigm you can solve those problems and enable so much more? Up your game from just the theoretical level (which philosophically aligns with the new paradigm concept of direct and reciprocal monetary gifting...what are large deficits after all but monetary gifts to government contractors and individuals via various programs?) to the level of entire paradigm/pattern change?
Please we need to have an exchange about this. Too many converging crises not to open ourselves to overall beneficial changes.
amazing how many people, at least one, who reads you and doesn’t get it but then there is Bernie who pretends it isn’t so. I wonder what John Yarmouth has to say about Bernie’s proposal. I form one would like a total disconnect but that is wishful thinking.
Please correct me if I’m wrong, but I feel like you would not agree with Senator Sander’s assertion that the Social Security expansion is needed in order to “make Social Security solvent for the next 75 years.” As a currency issuer the federal government can always meet their debts — correct? If the Social Security expansion is not needed for solvency, then what would the primary benefit be? Would the primary benefit be to take a step to close the income inequality gap?
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
It seems that paying in more demands higher payouts for these with obscene incomes and longer lifespans. Seems this would deplete the reserves even faster
You probably don't know the difference so I won't waste my time explaining it to you.