Social Security and means testing - the ultimate GOTCHA!

[brokensymmetry]

You have noticed that the rethuglicans are gloating over their new-found concern for the poor, as they propose to reduce social security payments to the wealthy. This is, unsurprisingly, a lie.

We hear of cuts for those who make $96,000 per year. Sounds like soaking the rich, doesn't it? But recall that the Alternative Minimum Tax (ATM) was originally crafted to force the very affluent to pay some minimum amount of income tax. Inflation is lifting more and more middle class families into the realm where they are subject to the ATM. The same thing will happen with Social Security.

Suppose that inflation is just 3%. In 24 years, the price of everything will double - so that means that if you're making $48,000 per year today, you'll have to make $96,000 in 2029 just to break even. If we project another 24 years ahead, prices double again. So if you make $24,000 per year today, you'll have to make $96,000 per year in 2053 just to break even.

Oh, but it gets worse. Inflation is increasing, at least partly due to the destructive policies of the present misadministration. Suppose that inflation goes up to 6% per year. Prices would double every 12 years - so by 2029, someone making $24,000 today would need to make $96,000 just to keep up.

The bottom line is that everyone will have their benefits cut by about 40%. It's just covered up with a filthy little lie so the public can't see the truth.

Don't think the thugs don't know it. They do. They're just hoping we don't realize it.

And now, a shameless request. If you believe this post is worthwhile for others to see, please kick it!

[stray cat]

1. Bush calls it a means test to make it sound like its only the super rich.

It is really changing the S.S. benefits so they are no longer compensating for inflation. It really is not a means test but a loss of benefits for anyone close to the current poverty line.

The way it is currently stated by Bush is that eventually S.S. benefits will disappear because the benefits will be so minimal due to inflation.

[PhuLoi]

2. Nicely stated. kick. eom

[aquart]

3. Kick

[ibid]

4. CUTS begin at 25000 - the size of the cut increases to over 40% for

the top end over the next 75 years

That 25000 refers to people making w-2 income of 25000 or more in 2012.

[yellowdogintexas]

6. that is probably final taxable income, not W2 income.

That is where your final tax bill is determined.

After itemized
after adjustments for dependents, etc.

and the over 65 population gets an extra point on their # of deductions as well.

[ibid]

7. No - Soc Sec income for the payroll tax has no deductions

Although other benefits can be structured so as to not count as income in either Social Security tax calculation, or FIT tax calculation. , or Medicare tax calc.

Indeed you get 3 lines on your W-2 for "income"

line one is wages including tips and other compensation for FIT.

Line three is wages for Social Security payroll tax

and line three is wages including tips for medicare "payroll" tax

plus you get line 7 to report Tips that you now wish to pay a payroll tax on for Social Security (God forbid you have tips that are allocated! and reported in line 8)

In any case, the payroll tax is not on adjusted income. I wish that it was - as That would be a GREAT PROGRESSIVE change in the tax law, since investment income would then pay a tax toward Social Security!

:-)

[brokensymmetry]

9. Distressing, isn't it?

With inflation, that probably equates to a person earning $15,000 or so today.

Talk about gutting a program!

[ikojo]

5. When anything in this country is means tested

it is QUICKLY demonized as assisting those who are undeserving (i.e. the undeserving lazy poor). Now what I see happening is that those who were not fortunate enough to be able to put away money into a 401(k) will be accused of being wanton in their financial matters during their working years and thus not "worthy" of social security "assistance" at retirement.

They will be called the unworthy elderly and may end up as soylent green.

[brokensymmetry]

8. How right you are.

And it isn't just those who can't put money away - consider the plight of someone who worked for Enron, someone who saved every nickel they could, and put it into their 401(k)...in Enron stock.

They might well have the worst of both worlds. Lowered Social Security payments along with no savings.

Soylent green, truly.

[Cleita]

10. Sorry, but means testing is a pile of you know what.

Why do we have to keep beating these RW talking points back under their rocks all the time. They have been disproven over and over again as BS economics.

[brokensymmetry]

11. I agree.

You'd think people would get fed up with the right, wouldn't you?