Should people over 65 still be required to pay Federal Tax?

[itzamirakul]

This was the question a caller asked on WJ at C-Span this morning. Actually, he made a statement and the host turned it into a question.

The caller mumbled a few disgruntlements that did not receive host attention, but said some things about SS going to people who just came over, and for the wrong reasons...etc.

Instead, the host asked, somewhat disdainfully, why the man thought he shouldn't have to pay taxes after 65.

I thought, how great it would be if the program host (Peter?) would display this same disdain when discussing the many U.S. corporations who register their business in the Cayman Islands and do not pay taxes to the U.S., or the extremely wealthy who find ways out of having to pay.

The caller responded with the "fixed income" basic truth.


So then why not relieve retired people from the Fed Tax burden?

Why not instead collect taxes by revoking the rule that allows any corporation to merely register the Caymen Islands as their Headquarters by renting a desk, chair and mailbox on the Island, and then conduct the remainder of their business here in the states, where they pay absolutely NO taxes for any of the benefits of service, roads, water, etc. that they utilize while conducting business here?

(Last week I heard on a recent tv documentary that one 5-story building in the Caymen Islands was the headquarters address for over 12,000 corporations that practice most of their business on American soil and who pay no U.S. taxes). Why not make it illegal for American-run businesses to list headquarters outside of America, period?

[Wickerman]

1. You ask a legitimate question

one that Paul wellstone was making headway on when his plane crashed. R.I.P., Paul.

[ChairmanAgnostic]

2. only if their estates are smaller than $500,000. otherwise, they pay.

after all, the Bushistas are doing everything possible to screw the middle and lower classes. Why stop there?

In fact, why not ban SS benefit for anyone older than 70, who has less than 100,000 in assets, and simply pay SS to old rich people?

[ima_sinnic]

3. SS "going to people who just came over"?

the dumbass doesn't know that a person has to work (i.e., "pay in") at least 10 years ("40 quarters") to collect any kind of SS? Ignoramuses who vote are the ones who have ruined this country.

[lpbk2713]

21. Kneejerk conservatives

If Limbaugh says it's so then it is gospel.

[bleedingheart]

4. Federal Taxes should start only when income exceeds $25,000/yr

for a single person and around $35,000/year for married folks.

I also think that there should be no cap on FICA and that collection of FICA should start around the $19,000 mark....

[bleedingheart]

5. also want to add I think this should apply to everyone not just old folks

there are plenty of young working poor that can barely make it...

[Cleita]

25. I agree with you on FICA. It's definitely the working class

person's burden. It should work the other way as you have noted.

[INdemo]

6. I believe John Kerry mentioned this in his Presidential campaign

When he was talking about *'s tax cuts for the wealthy.,he mentioned closing the loop holes so corporations could not register their businesses off shore and avoid taxes..Yes he mentioned this many times..

[Nicholas D Wolfwood]

7. Yes.

You know how many people over 65 still own and operate multi-million dollar businesses?

Maybe if you put in a different earnings exemption, but no friggin way should they be fully exempt.

[MannyGoldstein]

Most of the Rich are Over 65

Ending federal taxes for those over 65 would be a catastrophe.

Most rich people are over 65.

As of a few years ago, the average income people receiving Social Security was higher than that of the average person paying into it - this is likely to still be true. So, retired folks who, by-and-large, own their own homes were (and might still be) making more than young families trying to raise kids.

[napi21]

8. Of all the cspan hosts, Peter is my least favorite.

I also heard that caller re: anyone over 65 not having to pay Fed Taxes. The first thing I thought of was, those over 65 already get a "double deduction" on their fed taxes, and perhapse that should be increased, but I certainly couldn't justify elimiinating all fed taxes. You have to remember, if someone is going to be worth a lot of money, the most likely time of their lives for that to occur is when they are older!

[Joe Chi Minh]

9. Retirees in receipt of pensions have worked and paid taxes of

all kinds all their working lives. It is iniquitous and indeed illogical to tax them yet again on their pensions.

In fact, imo, the only sensible taxes are income tax on individuals and corporations. Flat taxes are an unmitigated abomination. Even parking taxes are misconceived. If a proper public-transport system were to be funded, there would be less call for the use of cars.

The tax system is yet another area in which scandalous stresses and pressures on the citizens of the country can be reduced, simply by RATIONALISING* it. There are so many areas of our lives that need to be rationalised, i.e propitiously, with a view to the good of society as a whole, for the medium and the long term, as well as the short term.

*Yes, that word again, but this time used appropriately.

[bleedingheart]

11. what about men like Warren Buffet? no taxes for him?

There are a lot of wealthy retired people out there who are living quite well while there are young folks struggling...

I went to a family reunion recently where all the over 70+ folks were talking about their summer places and their travels and boasting about investment earnings...these folks aren't poor...

I say we tax more fairly so that it helps both young and old.

[Joe Chi Minh]

15. That's what corporation tax is for. Tax at source for all who can

afford it. They have money working for them. It's still a form of income tax.

Maybe there's a better way, but this keeps it simple and less easy to dodge.

[Sgent]

13. They didn't pay taxes on thier pensions

there pensions (or 401k) was set aside with pretax dollars, and all earnings are pretax. They should either be taxed during their working lives (and exempt later on), or taxed during retirement.

Seeing how its so difficult to accurately value a pension 30 or 40 years before you draw it, its easier (and financially neutral) to tax it when they actually take it.

[Joe Chi Minh]

14. That's good. I'm sorry I misunderstood. In the UK, you pay tax

on your pensions too.

[bleedingheart]

16. In the US.....Social Security isn't taxed unless your income

exceeds a certain amount ...

So for those who planned for retirement and who had the good fortune to do well in life...they may pay taxes in retirement because of investment income.

When you put money into a 401K at work...that money is not taxed when it is put into the account...however when you draw off the account in retirement...the investment income is taxed.

There is another investment vehicle...a Roth IRA..and for that one...you put in up to $4K a year of taxed income...then when you draw off...you don't pay taxes. As my investment guy told me...it will eventually be banned when the Feds find out they will lose money on that deal...but folks like myself will be "grandfathered" into the tax benefit.

I don't have a pension..and neither does my husband so we are paying off our home as quickly as we can and we are investing money elsewhere in order to avoid being as poor as church mice later...

[Joe Chi Minh]

20. Basically, it is the very rich who need to pay much more tax.

The balance of the tax burden on incomes under right-wing government's (no less, if they are formally left-wing, such as New Labour in the UK) has always been disproportionate, but was tolerable, until the Vandals came to power under Thatcher, and the lurch to the right began.

[1932]

10. There are a lot of different kinds of 65+ year olds. Do you want to

relieve the tax burden on those who have estates worth over $1M (not including their over-valued real estate) and who cash dividend checks worth 100s of thousands each year (which are already only taxed at 15% -- less than half the rate of earned income)?

[Eurobabe]

19. My mom is one of those different 65 y/o struggling

to make ends meet with temporary & part time jobs, since she got laid off in 2001. She is a single homeowner. I think for people who live on less than $50K per year, they should not have to pay taxes. $50K doesn't go very far these days, with the cost of medicines, local tax burdens, energy costs, long term care insurance, Medicare Gap insurance, etc.

Tax those rich old farts who either hid their ASSets offshore or are living high off the hog with their dividend checks.

[Sgent]

12. YEP

Social Security is (mostly) tax free -- and should be for everyone. Social Security IMHO shouldn't be taxed or subject to reduction as an earnings penalty after you reach regular retirement age.

But they defferred taxes on their pensions and should pay either when the pension is earned or when its withdrawln -- same item for 401k's, IRA's etc. Usually the taxes on pensions/401k's are very low (below 15%) because they don't have other income.

Additional earned income should be taxed -- with the ability to increase social security earnings -- just like any other payroll tax.

In general, most seniors will be exempt unless they have large pensions or are still working for significant amounts of money (think consultant, not walmart greeter) due to the combination of the EIC and fairly high tax exemptions for earned income.

[tomp]

17. at the very least ...

...everyone should continue to contribute to social security.

however, of the many things that should qualify for tax exemption, i would think retirement funding, up to a certain cap, should be among them.

[FlaGranny]

18. I'm over 65 and I say yes, they should pay taxes, but

these taxes should be based on income - zero for low income and graduated for high incomes.

As far as corporate tax dodges go I totally agree with you.

[doc03]

22. I don't believe SS should be taxed at all (Clinton started that)

but income outside of SS should be taxed after a certain point. There are many of the over 65 crowd that are doing much better than todays working people do or ever will for that matter. Just take a look at who eats out or who feeds the slots and you will probably see at least 75% of them are over 65. Check out who owns most of the the $100000 plus motor homes or boats. I not saying all people over 65 are well to do (my mother gets $860 a month from SS and that's it) but many are.

[lindisfarne]

23. Yes. Tax should be based on income. There are lots of sr. citizens who

enjor "sr. citizen" discounts who have more money than people in their 20s and 30s. They don't deserve an income tax discount. There are plenty of sr. citizens who barely are making it - but there are also lots of families who barely are making it. Income tax should not apply to incomes below a certain (adjusted) level (after deductions are factored in) - that level should be at least 25% higher than it is right now.

Sr. citizens are the group most likely to have their mortgage fully paid off and thus many don't have part of their income going toward housing (aside from maintenance and utilities). That's already a very nice break (although it is offset by higher health care costs).

[Cleita]

24. Well, I am against paying taxes on Social Security because

the money was already taxed once when it was deducted from everyone's paycheck. I don't think it should be taxed again even though it's mostly the middle class retiree that gets taxed.

As far as paying taxes on other retirement income, a lot of that like IRAs were tax deferred so when you take a distribution on those funds then the taxes come due and that's the bargain, which I think is fair.

Yes, I agree corporations who want to do business in the United States need to file taxes on the revenue they recieve in this country and pay taxes on it.