Obama to propose cuts to Social Security

[Miles]

The Progressive Change Campaign Committee is threatening to support primary challengers to Congressional Democrats who support this.

[King]

I have an idea.  What if, for everyone under the age 40 right now, we split SS/Medicare into two plans: Limited and Full benefits?  At the age 40, when you're just settled enough to look at future planning, you get to choose which one you want to go on when you retire.  The catch is that if you select Full your payroll taxes go up to a higher rate.  Limited will still be a decent plan, but full will include things such as Part D and maybe add some additional programs to sweeten the pot.

My guess is, given a clearly list of benefits paying the higher rate would provide, even the most anti-tax conservatives would opt in to the tax hike as part of their retirement plan.  Considering the 40s and 50s are priming earning years for most people, it would produce enough revenue to cover the shortfall.  And the ones who don't take it will save the government a ton of future spending.

[Torie]

I have an idea.  What if, for everyone under the age 40 right now, we split SS/Medicare into two plans: Limited and Full benefits?  At the age 40, when you're just settled enough to look at future planning, you get to choose which one you want to go on when you retire.  The catch is that if you select Full your payroll taxes go up to a higher rate.  Limited will still be a decent plan, but full will include things such as Part D and maybe add some additional programs to sweeten the pot.

My guess is, given a clearly list of benefits paying the higher rate would provide, even the most anti-tax conservatives would opt in to the tax hike as part of their retirement plan.  Considering the 40s and 50s are priming earning years for most people, it would produce enough revenue to cover the shortfall.  And the ones who don't take it will save the government a ton of future spending.

Will the "limited" option lead to the moral hazard that in retirement the "limited option" pickers will be a moral hazard, because they will need government subsidies to avoid being old bag ladies and gentlemen. That is the question. I have next to zero confidence that 80% of Americans can adequately plan for their retirement future, and thus the need for a stream of income that creditors cannot touch, that is enough for the basics, when one reaches that certain age when their human capital is de minimus.

Do you agree King?

[King]

I have an idea.  What if, for everyone under the age 40 right now, we split SS/Medicare into two plans: Limited and Full benefits?  At the age 40, when you're just settled enough to look at future planning, you get to choose which one you want to go on when you retire.  The catch is that if you select Full your payroll taxes go up to a higher rate.  Limited will still be a decent plan, but full will include things such as Part D and maybe add some additional programs to sweeten the pot.

My guess is, given a clearly list of benefits paying the higher rate would provide, even the most anti-tax conservatives would opt in to the tax hike as part of their retirement plan.  Considering the 40s and 50s are priming earning years for most people, it would produce enough revenue to cover the shortfall.  And the ones who don't take it will save the government a ton of future spending.

Will the "limited" option lead to the moral hazard that in retirement the "limited option" pickers will be a moral hazard, because they will need government subsidies to avoid being old bag ladies and gentlemen. That is the question. I have next to zero confidence that 80% of Americans can adequately plan for their retirement future, and thus the need for a stream of income that creditors cannot touch, that is enough for the basics, when one reaches that certain age when their human capital is de minimus.

Do you agree King?

I thought about that.  It all depends on what benefits are offered in each plan.

Another idea could be to make the payroll tax regressive with age, since young folks are less likely to make good long term financial decisions, teenagers would pay the highest rate into SS to get them started right and it would decline every five years or so until retirement.  It would also give Americans the feeling of receiving regular tax cuts as they age so they'd be less likely to complain about it.

[Sbane]

Why would part D be only allowed under the more expensive plan? Maintanence medications for blood pressure, cholesterol and type 2 diabetes lower health care costs more than anything else, so why would that not be covered but expensive hospital coverage be covered?

[DC Al Fine]

I have an idea.  What if, for everyone under the age 40 right now, we split SS/Medicare into two plans: Limited and Full benefits?  At the age 40, when you're just settled enough to look at future planning, you get to choose which one you want to go on when you retire.  The catch is that if you select Full your payroll taxes go up to a higher rate.  Limited will still be a decent plan, but full will include things such as Part D and maybe add some additional programs to sweeten the pot.

My guess is, given a clearly list of benefits paying the higher rate would provide, even the most anti-tax conservatives would opt in to the tax hike as part of their retirement plan.  Considering the 40s and 50s are priming earning years for most people, it would produce enough revenue to cover the shortfall.  And the ones who don't take it will save the government a ton of future spending.

Will the "limited" option lead to the moral hazard that in retirement the "limited option" pickers will be a moral hazard, because they will need government subsidies to avoid being old bag ladies and gentlemen. That is the question. I have next to zero confidence that 80% of Americans can adequately plan for their retirement future, and thus the need for a stream of income that creditors cannot touch, that is enough for the basics, when one reaches that certain age when their human capital is de minimus.

Do you agree King?

I thought about that.  It all depends on what benefits are offered in each plan.

Another idea could be to make the payroll tax regressive with age, since young folks are less likely to make good long term financial decisions, teenagers would pay the highest rate into SS to get them started right and it would decline every five years or so until retirement.  It would also give Americans the feeling of receiving regular tax cuts as they age so they'd be less likely to complain about it.

I like this idea King, but it should only apply to the employee side of the payroll tax. If it were applied to the employer side, you'd see employers discriminating against the young, which would mean young workers would have a harder time getting into the workforce and perhaps reduce the effectiveness of the measure in making Social Security more solvent.

[All Along The Watchtower]

The Case For Expanding Social Security:

You must be logged in to read this quote.

More:http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/03/the-case-for-expanding-social-security-not-cutting-it/

[Torie]

Where is the money for this going to come from again?

[DC Al Fine]

Where is the money for this going to come from again?

[All Along The Watchtower]

Where is the money for this going to come from again?

http://en.wikipedia.org/wiki/Tax

[Torie]

Where is the money for this going to come from again?

http://en.wikipedia.org/wiki/Tax

And the price tag? And from who?

[HoosierPoliticalJunkie]

America does not need more taxes.  America needs more jobs.  Obama had his tax increases, and I supported that deal. 

Now, it's time to reform the entitlements.  I would support revenue increases with real entitlement reform, but the revenue increases have already passed.  And Obama's payroll tax increase(to be fair, it's not like the GOP pushed for its extension at all) is what caused the anemic 88K jobs report. 

Entitlements will drown the economy if left unchecked.  We cannot afford the path we are on now.  America must not become the next Cyprus. 

Please Congress, cut spending.  Please.

[H.E. VOLODYMYR ZELENKSYY]

America does not need more taxes.  America needs more jobs.  Obama had his tax increases, and I supported that deal. 

Now, it's time to reform the entitlements.  I would support revenue increases with real entitlement reform, but the revenue increases have already passed.  And Obama's payroll tax increase(to be fair, it's not like the GOP pushed for its extension at all) is what caused the anemic 88K jobs report. 

Entitlements will drown the economy if left unchecked.  We cannot afford the path we are on now.  America must not become the next Cyprus. 

Please Congress, cut spending.  Please.

Tax revenue is at an all-time low. If anything, we should be raising taxes.

[Snowstalker Mk. II]

America does not need more taxes.  America needs more jobs.  Obama had his tax increases, and I supported that deal.  

Now, it's time to reform the entitlements.  I would support revenue increases with real entitlement reform, but the revenue increases have already passed.  And Obama's payroll tax increase(to be fair, it's not like the GOP pushed for its extension at all) is what caused the anemic 88K jobs report.  

Entitlements will drown the economy if left unchecked.  We cannot afford the path we are on now.  America must not become the next Cyprus.  

Please Congress, cut spending.  Please.

Holy centrism, Batman!

Anyway, I'm sick of the fact that "we need to cut spending" is now conventional wisdom. Austerity at this time, especially of the nature proposed, would only serve to bring us into a new recession. The size of our national debt certainly isn't a good thing, but it isn't anywhere near a top priority for now.

[Torie]

Well since no one else bothered, I clicked the link, and the price tag is that to do this taxes would need to be increased by an amount equal to about 5% of the GDP (versus 1% to 1.5% of the GDP to maintain the current levels without cuts). That's about 800 billion per year in additional revenue needed. And we have the medical subsidy bomb on top of that to contend with, with the global warmists out there also sporting that lean and hungry look, with their hand out. The next step for the Left given this set of little abstract numbers, is to propose just whose taxes would be raised by how much to cover all of this, and its macro-economic impact on growth, as even more dough is transferred from the productive young to the recipient old.

All very interesting. The odds of this happening?  Yes, you guessed it - asymptotically close to zero.

[opebo]

an amount equal to about 5% of the GDP

insignificant then.  Your class certainly should be paying about double your current rate.

[Torie]

an amount equal to about 5% of the GDP

insignificant then.  Your class certainly should be paying about double your current rate.

At least until such time as you harvest your expectancy.

[opebo]

an amount equal to about 5% of the GDP

insignificant then.  Your class certainly should be paying about double your current rate.

At least until such time as you harvest your expectancy.

Cheers to that!

[HoosierPoliticalJunkie]

an amount equal to about 5% of the GDP

insignificant then.  Your class certainly should be paying about double your current rate.

At least until such time as you harvest your expectancy.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/

The average tax rate overall, including federal, state, and local taxes, is around 30% for the top 2 QUARTILES of income.  So if you're in the top "40%", which might be "your class", then doubling that rate would be 60% of your income.  That is quite excessive.