The Social Security Administration doesn’t track net worth. In part, because it’s utterly impossible. I don’t even know my own net worth within a million dollars. They don’t know who is a millionaire or a billionaire or broke. Social Security isn’t based on how much you’ve amassed or saved. It isn’t even based on how much you’ve worked. It’s soley based on how much you’ve earned.
So there is no way for payouts to be adjusted for net worth. Impossible.
Removing the cap bankrupts the system. That’s why they won’t do it.
BS. Theft is the drug companies charging US citizens many times more any particular drug than they do citizens in other countries. Theft is Elon Musk getting 38 billion with a B in government contracts, low interest loans, subsidies and tax credits, all the expense of the American Taxpayer, then turning around and taking a chain saw to programs that are now causing the death of people who rely on those programs for food and drugs, and that’s just one program.
It’s estimated that funding cuts and freezes have already resulted in thousands of deaths, with potential for many more. For example, Boston University estimates that over 10,000 people have died due to the USAID funding cuts, while another estimate suggests that a freeze on global AIDS funding has already taken nearly 19,000 lives. Further, the PBS reports that USAID funding cuts could lead to 163,500 additional deaths per year due to the impact on malnutrition treatment in children, and the Desmond Tutu Health Foundation estimates that ending PEPFAR (the President’s Emergency Plan for AIDS Relief) could lead to over 600,000 deaths in South Africa alone.
So yes, multi-millionairs and billionairs should be paying more, because if it weren’t for us little people, they wouldn’t exist.
You must have misunderstood me. They would be paying based on their income, not their gross or net worth.
How does it bankrupt the system?
I disagree. IMO They don’t do it because of lobbyists lining the pockets of congress keeping them from doing it. I think we’ll be seeing them not removing, but raising the caps on the wealthy before too long in order to keep the program in the black.
OK. So there was no need to bring up “multi-millionaires and billionaires” because no government agency, even the IRS, tracks anyone’s net worth, what they’ve amassed, or how much they’ve saved. It’s impossible to quantify. Me and my wife haven’t a clue what our net worth is, so how would some government bureaucrat know? They don’t.
Income tax is based on income, not current wealth. That’s why we call it “income tax.” And like income tax, both Social Security contributions and payouts are based on income, not current wealth.
We now agree on that so let’s not bring up “the rich” any longer. Let’s instead discuss income:
Nearly all of the working poor’s income is earned income.
Nearly all of the rich’s income is capital gains.
Capital gains is not earned income and so isn’t used by the Social Security Administration to calculate contributions or benefits. It doesn’t show up on your W2 and so they can’t even see it.
So removing the cap has zero affect on the very people you are trying to tax.
Furthermore, we as a society, don’t want the government siphoning even more money out of the productive economy from people like Elon Musk or anyone else, for that matter. That money is best kept inside the economy where it helps all of us. Giving it to bureaucrats is the worst thing you can do with capital. Hyper-productive people landing government contracts is the reverse of that, and the best thing you can do with capital.
Furthermore, even if you could charge the rich more, which I showed that you can’t, and even if you thought it was good to siphon that capital out of the economy and give it to the Social Security Administration, it wouldn’t stay there. Bureaucrats spend every penny of the Social Security reserves as fast as it comes in. So you’d be harming everyone and helping no one by expanding the Social Security Ponzi scam or by removing the cap on earned income.
The money collected is required by law to be borrowed to the federal government so that it collects interest. Borrowing money to the U.S. federal government is the safest investment in the world (as of now).
So if anyone tries to tell you that the money was stolen or spent on something it wasn’t supposed to be, they are either lying, or misinformed. Every penny is present and accounted for, and yes, payable back to those who paid it in, with interest, by the federal government.
There are several reasons why the fund is projected to run dry within the next 10 years (depending on who you ask). But the biggest reason is changing demographics and changes to how people earn income, which affects how much the system collects and pays out..
Changes need to be made to keep the system solvent long term. One of these changes might be taxing wealth, as well as income.
It’s as if no one reads anything I type. Again, the government can’t tax wealth because it doesn’t have any way of tracking it. We tax income. That’s why we call it “income tax.” You can’t tax net worth because that ledger doesn’t exist anywhere. I don’t even know my net worth within a million dollars, how would some bureaucrat?
And furthermore, it’s immoral to tax what someone amassed and saved. Let’s say that you and I each earned about the same about throughout our careers. And let’s say you were frugal and invested your money in real estate so that you would have a nice nest egg when you retire. Yes, you had to forego many luxuries and it was hard to manage all that real estate for so many years, but you did it. Conversely, let’s say I spent all my money on hookers and cocaine. Why should you now be taxed more than me (we earned the same amount over our lifetime) to support the Social Security Ponzi scam? Why should you be financially punished for being frugal and for saving?
OK. Let’s say that somehow the government was able to appraise my artwork, antiques, heavy equipment, businesses, real estate, intellectual property, along with all my liabilities and debt, etc and quantify every American’s worth every year… lol. I know, but let’s just pretend. And…
Let’s say that you and I each earned about the same about throughout our careers. And let’s say you were frugal and invested your money in real estate so that you would have a nice nest egg when you retire. Yes, you had to forego many luxuries and it was hard to manage all that real estate for so many years, but you did it. Conversely, let’s say I spent all my money on hookers and cocaine. Why should you now be taxed more than me (we earned the same amount over our lifetime) to support the Social Security Ponzi scam? Why should you be financially punished for being frugal and for saving?
Don’t think of it as being punished. Think of it as being “helpful.”
That said, you hit on the biggest issue with taxing wealth (in my opinion). How to do it fairly. The idea is to get something from those that purposely use their wealth to avoid taxes. It’s not an easy feat and Congress may never tackle the issue.
I know how. If you didn’t spend all the money you earned in your lifetime on hookers and cocaine… and instead invested and saved, you should have to pay less taxes.
Simply tax income progressively (the more you make, the more taxes you pay). We do that now.
And tax wealth regressively (the more you amass, the less taxes you pay). Maybe at some net worth ($5 million or whatever) you are tax exempt and never pay taxes again. This incentivizes frugalness, investing, saving, hiring, and wealth building.
Something to think about; wealth accumulation does not happen in a vacuum. Public resources are used to create wealth in all but maybe .001% of instances.
So those that use their wealth to avoid paying taxes do not always pay an equitable sum for the public resources they used to obtain that wealth.
This is also the reason why it is not unfair to tax corporations. Corporations use tons of public resources to generate profits. They need to pay an equitable amount of tax for using those resources. Yes, this tax will be passed down to their customers, but that is fair as well. Their customers are a beneficiary of the public resources used.
They should. Those public resources were funded mostly by the top 1%. The top 1% pay 42% of all taxes for all of us.
All corporate taxes are regressive, hidden taxes on the poor. If you see someone arguing that corporations should pay more in taxes, you know that deep down, they hate poor people. I wrote a short article about this: Corporate Taxes are a Heinous, Hidden Tax on the Poor
That is fine. They should pay about that, as they hold about a third of the nation’s wealth. They can reduce the amount of wealth they hold by releasing it to the 99% below them. That’s one of the issues with the 1%, they hoard wealth. At least the government doesn’t hoard our wealth. They spend it immediately, actually even before they receive it, as you have pointed out.
Nick,
I think you are missing the big point. 70 % of the American people are not invested in the stock market. This will make all Americans investors, capitalist. With 18 years of investment in the stock market, kids graduating from high school will not have to go into debt for education, etc. And with a dog in the fight, maybe some financial education. Just think, if our next generation have a nest egg to start off with, many can move off the Democrat plantation.
Just think how much money has been wasted on emigration. And they said the wall was a waste of money.
This is true, but IMO this is what needs to be changed. There should no reason why capital gains shouldn’t be taxed at the same rate and have SS deductions the same way as income does. Capital gains is income.
The reason capital gains isn’t taxed like income is because of the tax laws being written by congress via lobbyists. Greed is just as powerful of a drug as cocaine, alcohol or any other substance abuse.
America’s billionaires are now collectively worth a record $6 trillion. Their wealth has more than doubled since the passage of the landmark Tax Cuts and Jobs Act in 2017.
It’s not the money we need to take back from them, it is the power. This will thwart the inevitable digression from capitalism to communism. And communism is nothing more than hostile takeover and a transfer of wealth and power to a different group. I am pretty sure you and I agree on this at some level.
How much wealth are you ok with being accumulated to the top before you see there is a problem? All of it? Will you be happy when they have all of the country’s wealth?
Take a look at this chart. Are you happy that half of the population is too insignificant to even be shown?
And I bet it doesn’t bother you at all that the richest person in the world was able to buy the presidency and buy major influence in our political system?
