The War on Entitlements

[Rion]

Perhaps "entitlement" reform could begin by addressing the fact the wealthy have traditionally paid tax at a far lower rate (assuming that they pay tax at all) than the average citizen.

During the 2012 Presidential Election campaign it became public knowledge that Mitt Romney was being taxed at 14% - like Buffett, his receptionists and cleaning ladies are taxed at a far higher rate.

According to "The Atlantic," 7 000 American millionaires paid no federal income taxes in 2011 - that's an example of real "entitlement!"

Rule Rorschach: 7,000 Millionaires... in 2011 - Derek Thompson - The Atlantic[/url

[url]http://reason.com/archives/2012/11/26/the-latest-from-the-tax-me-more-crowd

 

[Rion]

You mean like insurance?

SS is not run like an insurance program. It's ran like a ponzi scheme.

 

[Vylo]

SS is not run like an insurance program. It's ran like a ponzi scheme.

Actually it is run like a traditional pension plan. You may remember when many of those went broke because retirees began living too long and built up too many benefits.

 

[OldWiseGuy]

Reagan raised the contribution rates, creating the Trust Fund, so the government would have another source of revenue.

Washington wants to 'fix' SS so they can maintain the flow of excess dollars which they will then continue to borrow.

SS is funded entirely with money that has been in circulation in the private economy, been earned and taxed. So the debt owed to SS is far different from money owed to bondholders, who borrow freshly printed money.

Upper income earners supplement lower income earners in that they receive smaller benefits at retirement in proportion to their contribution.

SS, like most pension plans (and like payouts by Readers Digest and Publishers Clearing House) are pyramid schemes, where new money flows upwards from an expanding base of many new enrollees to a few beneficiaries at the top. Of course as the new enrollees diminish in number their contribution must increase or the whole thing falls apart.

SS is still providing excess funds for the the government to borrow, and will for some years yet. The big concern of the government isn't the ability of SS to pay retiree benefits but the maintenance of the flow of excess Trust Fund monies that it needs to help fund other programs.

We have a government that is 'eating it's young' in order to keep the family fed.