The Dow Jones Industrial Average

[jk]

Re: The Dow Jones Industrial Average

raising the taxable cap without raising the potential payouts does change the nature of the system. i'm in favor of it as one solution to social security's coming funding crisis, but we can't ignore its implications. the reason that BOTH contributions and payouts are capped is to make it clearly a social insurance program, not a welfare program. it was designed that way to maintain its political support and insulate it from the manipulations applied to taxes and welfare programs in general. to raise the cap but not the payouts moves toward making it more of a welfare program and invites more political manipulation.

otoh, the system will hit a crunch in about 7-10[?] years, when receipts no longer cover payouts and the system explicitly has to dip into general funds. the solutions will include raising the retirement age further, means testing payouts, increasing the taxable portion of payouts [now as high as 85%], increasing the tax cap without increasing the payment cap, or some combination thereof.

raising the retirement age does the least violence to the design and conceptual basis of the system, although then allowance would have to made for increasing early "disability" claims for workers who no longer can satisfy the physical demands of their work.

medicare has a worse funding problem to address.

[DSpencer]

Re: The Dow Jones Industrial Average

Total taxes as a percentage of income. I would like to see 50 state-by-state graphs similar to this one.

I agree that only looking at income taxes may be an incomplete perspective. The problem is that adding in other taxes does not necessarily improve clarity. For example, what is included in this chart? Payroll taxes? Corporate taxes? Sales tax?

Payroll taxes are the next largest (after personal income) source of tax revenue for the federal government. But if you believe they not truly taxes, but a form of social insurance where everyone gets out what they paid in plus interest then it is hard to see why they should be considered in the same category as the funds that pay for roads and battleships. If the 1% were forced to put 20% of all income sources into Social Security, but they also got to get an equal amount back upon retirement, would that solve any budgetary problems or reduce inequality? Nope. But it would drastically change the appearance of total tax as a percentage of income charts and make it look like the 1% were paying a vastly higher rate. Likewise, reducing it to zero for everyone would lower the rates for everyone and disproportionately for anyone below the cap or earning income not subject to payroll tax.

It's the same argument, as mentioned already, about eliminating the cap on SS taxes. It only increases the long term solvency of the program if the money is given to other people in order to make up the shortfall. Otherwise it simply increases the size of the program without reducing the shortfall at all. Once we do that, or implement means testing for benefits, we might as well stop pretending it's some kind of forced retirement savings or survivor benefits program. Why not just institute a separate program and call it what it is: welfare for retirees?

So payroll taxes certainly matter in some ways, but I don't think they are the same as taxes which pay for things immediately and have no pretense of accruing a later benefit for the taxpayer. Of course, my understanding is that technically nobody has a "right" to their contributions in Social Security and the benefits are not guaranteed. However, the likely scenario is that if any changes are made (with the possible exception of raising retirement age) they will involve shifting some of the benefits from the wealthy to the poor.

[vt]

Re: The Dow Jones Industrial Average

http://www.washingtonexaminer.com/om...rticle/2638746