This is to pay for retirement. How much do you think a millionaire is going to need to get back for that? Sure, tax the rich, but this one ain’t it.
It's rigged
Submitted 11 hours ago by VetOfTheSeas@discuss.online to workreform@lemmy.world
https://discuss.online/pictrs/image/6cb197e2-c944-46d1-918f-a616693ec02d.png
Comments
the_mighty_kracken@lemmy.world 48 minutes ago
BeUnique@lemmy.zip 1 hour ago
It’ll trickle down.
You know, because the richest people in the United States are for sure known for giving away money and not hoarding it because they feel they have enough…
JordanZ@lemmy.world 10 hours ago
The reason this works out that way is because there is a wage base for the social security tax. If you don’t make more than that base then you pay that tax all year long. If you’re making 1m then you pay that tax for like the first two months and then nothing afterwards. The solution to this is just removing the wage base. If you make 1m you should pay the same percentage as everybody else on all your earnings. Magically the social security system will be overfunded.
echo@lemmy.today 10 hours ago
The other thing to get rid of is long term capital gains taxes and just tax capital gains as regular income.
BillyClark@piefed.social 1 hour ago
Also, while paying my property tax bill, I noticed that the government has no problem taxing me for an assessed value of my property without me actually realizing my gains.
Of course, that is a property tax and not a capital gains tax, but it just shows that they definitely don’t have to wait until you sell to tax on capital gains. Just have an official assessment of value for investments.
nibbler@discuss.tchncs.de 9 hours ago
Explain please? It’s about the tax rate between those two? I thought the problem with CGT is that people dodge it by taking loans secured by their capital/stock. This does not seem to fix this problem…
saltesc@lemmy.world 8 hours ago
So what you’re saying is, social security should be, like…social?
RQG@lemmy.world 7 hours ago
It’d also be nice if it offered actual security.
COASTER1921@lemmy.ml 3 hours ago
Removing the income cap is the obvious first step to balancing the social security budget, but it’s not enough to make the system solvent long term.
There are a number of ways to fix the remaining shortfall, but removing the cap is really the only easy measure and we can’t even do that. All others involve some amount of pain. This interactive calculator is worth spending a bit messing with: https://www.crfb.org/socialsecurityreformer/
chisel@piefed.social 5 hours ago
With Social Security, the amount you get out is directly related to the amount you pay in. So if the cap is increased, yes, social security will get more income, but they’ll also need to start paying out a whole ton more.
It’s more of a forced savings/investment account than a wealth redistribution scheme. There is some redistribution happening, but not as much as most people think.
HubertManne@piefed.social 55 minutes ago
except they mention paying a fraction of whats owed to some future pensioners. Why is it ok for them to pay in more than they get back but its somehow bad for someone of large means to pay in more they get back? Seems like a no brainer on how this should be handled to be equitable to society.
snooggums@piefed.world 5 hours ago
Social security benefits shouldn’t be proportional to income, it should be a set amount that everyone is eligible and it should be collected proportional to income including capital gains and everything else.
throw122@fedinsfw.app 5 hours ago
It’s a progressive payout though. SSA pays out 90 percent of average monthly income over 35 years (approximate based on their formula. AIME) below the first “bend” at about 1200 dollars per month, 32 percent between the first and second bend, and 15% above the second bend. So SSA would get 10.6 percent of every new dollar that used to be above the cap, while that dollar would increase the person’s benefit by their marginal rate (likely 32 or 15 for a high earner) divided by 420 months (you could assume the person will have a 35 year retirement to cancel out the two sides of the equation). Turning 10.6 percent into 15-32% (and most of the uncapped money would be likely to fall in the 15% if I had to guess) shouldn’t be a hard thing to do for SSA with extra funds to spare when you consider that the average retiree won’t live for a 35 year retirement and that there are 35 years of gains to capture between money in time vs money out time
echo@lemmy.today 10 hours ago
We’re talking about a cap and not a base, but yeah… remove the cap and everything gets better.
JordanZ@lemmy.world 10 hours ago
That’s effectively what it is but it’s called the social security wage base.
unitedwithme@lemmy.today 5 hours ago
But… If there cap is 184k, when you retire and get your SSI check, you won’t get more than the next person if you made 1m vs their 184k.
I think the point is the wealthy people are less likely to be reliant of SSI in retirement. So they don’t want to pay into it any more than they have to. If they paid more, they’d end up getting more, so while temporarily it’d be funded better sooner, SS would just pay more out later and still be broken.
BarneyPiccolo@lemmy.today 4 hours ago
If you are reforming SS to raise the cap, why wouldn’t you also reform the payment end as well? There is no reason that the wealthy should get enormous SS payments they don’t need, and allow that to cripple SS for those who do need it.
I can hear the parasites now: “It isn’t fair! The poors get all the breaks!”
RBWells@lemmy.world 5 hours ago
And so what? If I pay taxes and never use WIC, is that wrong in some way?
Social Security also funds SSI disability, most of us won’t use that but we pay for it. That’s how taxes work.
The cap should be removed, it’s a tax not a pension plan. We can cap the benefits (higher than it is now) without capping the deduction. Anyone making $1M/year is still going to net hundreds of thousands more than someone making $200K. And both of them will be fine.
Willy@sh.itjust.works 10 hours ago
Over funded how? Right now they still collect social security. Are you suggesting they should pay more into SS and then collect less to turn it into a tax?
Tiger666@lemmy.ca 6 hours ago
Pay their fair share is what it is called.6
snooggums@piefed.world 5 hours ago
YES
gergolippai@lemmy.world 1 hour ago
12.4%?!
*cries in dutch 49.5%
Phil_in_here@lemmy.ca 24 minutes ago
Oh no, do you feel unwell? Do you need to take paid personal leave from work to visit a free doctor?
1984@lemmy.today 6 minutes ago
This is normal in civilized countries.
gergolippai@lemmy.world 6 minutes ago
*it’s not free.
i pay (on top of my tax deductions) about monthly 150eur for health insurance, and on top of that a yearly 384 eur “eigen risico” (own risk). still better than the US, but free it is not.
CptOblivius@lemmy.world 1 hour ago
They are talking just about social security not full income tax, etc.
TrollTrollrolllol@lemmy.world 1 hour ago
Yeah but at least you get something other than murdered brown people half the world away for your tax dollars.
Glytch@lemmy.world 40 minutes ago
Looks at the services your government provides you and compare it to America. That should help you feel a little better about the taxes you pay. We end up paying more to private corporations for the same or worse than your taxes pay for.
AA5B@lemmy.world 47 minutes ago
This is social security, employee contribution only.
A big reason US taxes seem lower is because there are so many and we usually don’t aggregate
Google says you’re specifying the duty income tax rate, so it’s not comparable and the Dutch social security tax’s is “only” 27.5%
gergolippai@lemmy.world 8 minutes ago
your “only” is doing some heavy lifting there :) but of course i wouldn’t have it any other way.
doingthestuff@lemy.lol 1 hour ago
Most people only pay half of that and their employer pays the other half. Self employed people pay all of that, that’s me. I don’t have any separate retirement accounts or health insurance benefits either, but none of that is factored into my taxes.
ZMoney@lemmy.world 7 hours ago
This is called a regressive tax. The Republican party should embrace the word regression. Their followers are too stupid to understand its meaning anyway.
explodicle@sh.itjust.works 2 hours ago
In America there’s a contest to see how out-of-date one’s economics can be. If you quote Adam Smith, they’ll call you a pinko.
SparroHawc@piefed.world 1 hour ago
Social Security is supposed to be like a forced retirement account - what you pay in is what you get out of it later. It was essentially an emergency measure put into place when a lot of Americans were struggling. Since it doesn’t make sense to have a payout above a certain amount, as it would be above the average cost of living, there’s a cap of how much is collected per person per year.
realitaetsverlust@piefed.zip 2 hours ago
Because it’s wage based. Nobody makes a million bucks as salary.
JoeyJoeJoeJr@lemmy.ml 1 hour ago
This is incorrect. People do make over a million, e.g. Sundar Pichai makes $2 million base. The reason the tax is a lower percentage for a millionaire is because the social security tax is capped. You only pay it on the first $184,000 (this increases yearly) that you earn.
It is important to note social security tax is basically forced retirement savings. In theory, you are funding your own retirement through it (the more you pay in, the more you get out later). This is very different than ordinary income tax, which is not capped (that’s not to say it’s high enough, or that there aren’t ways to hide, defer, or obscure income, and pay less than expected or reasonable).
WorldsDumbestMan@lemmy.today 44 minutes ago
The math says that out of 184.000 dollars, 12.4% = 22.816. Meanwhile, put of 1.000.000 dollars, 2.2% = 22.000 dollars!
Meaning you pay an extra 816 dollars for being poorer!
certified_expert@lemmy.world 4 hours ago
Can somebody eli12 it for me?
VinegarChunks@lemmus.org 3 hours ago
Social Securiry benefits are paid out based in how much you earned during your working years.
These benefits cap out at a certain limit. Accordingly, the social security taxes also cap out at a certain limit. Beyond that income you do ‘t get any higher Social Security benefits and you don’t pay any higher Social Security taxes.
This is because Social Security is not designed to be a progressive tax like the income tax is.
Our tax system overall should be more progressive. Maybe social security should be part of that. But it was never designed to do this.
AA5B@lemmy.world 37 minutes ago
Our tax system overall should be more progressive
Tax brackets are the fundamental way that income tax is used regressive: the higher your income, the higher percentage you pay on that (marginal) income
In addition to “income” shenanigans available to the wealthy, the highest tax bracket is at $750,000 (couples filing jointly). While that’s certainly a lot of income, the percentage never goes higher. Someone earning that pays the same percentage on marginal income as a ten millionaire or a hundred millionaire or a billionaire. It stops progressing
bss03@infosec.pub 1 hour ago
There’s a cap on how much you (and your employer) pay per SSN / year. So, for particularly high wages or salaries, the percentage goes down, for every dollar made above the cap.
Also, things like stock( option)s often made up a significant portion of compensation for high earners and those aren’t subject to SSI tax at all, IIRC.
Krauerking@lemy.lol 3 hours ago
The richer you are the more you take and the less you pay back into the system that made you rich. But the parasites will argue their smaller percentage paid in taxes is fine cause of their size even though it means they hoard a larger percentage of their wealth.
raman_klogius@ani.social 9 hours ago
The taps at the top needs to flow less for the trickling down to happen, that’s common sense! /$
Telodzrum@lemmy.world 6 hours ago
Really interesting to see how vocal people are about this topic before they even know how this particular tax and distribution program works.
explodicle@sh.itjust.works 2 hours ago
People are upset that the rich are paying a lower percentage of their wealth than the poor. Nobody here thinks the rich are only supposed to pay for their own Social Security, or are making any legal argument about how tax law currently works.
certified_expert@lemmy.world 4 hours ago
How does it work? I am a bit confused about it.
fizzle@quokk.au 10 hours ago
Are the benefits you might receive dependent on how much you contribute?
This seems very “American”. As in, superior American-style-freedom because everyone pays for their own social security.
LastYearsIrritant@sopuli.xyz 6 hours ago
Social security has a max payout, so it also has a cap on the taxes you pay into it.
At a surface level, it makes sense, which is why it continues.
Once you look into it even a little bit further, the max payout needs to stay, but the tax cap needs to be removed.
FlexibleToast@lemmy.world 9 hours ago
I’m pretty sure they are. The more you pay into the system, the more you get at retirement age. But, it’s also capped. I’m assuming that’s the rationale behind capping the tax.
BlackLaZoR@lemmy.world 6 hours ago
What about total taxation?
You cherrypicked one, and ignored rest on purpose?
SippyCup@lemmy.world 6 hours ago
Brother read the room
BlackLaZoR@lemmy.world 6 minutes ago
Why should I care about the room? I’m not here to glaze other people into liking me.
Railcar8095@lemmy.world 5 hours ago
We shouldn’t be so close minded really. The same thing happens in my country, there’s a maximum absolute value you can pay a social security tax, because there’s a maximum you can get in the form of unemployment and retirement. Then there’s the income tax which is not capped and it’s progressive.
Leaving this info aside on a quick meme is one thing, but to tell people that point it out to “follow the herd” feels to deliberately want people to be misguided.
I don’t know how exactly the social security works there, but does make sense that a different tax works different than the income tax.
Evotech@lemmy.world 9 hours ago
Well. They pay the same on everything up to each threshold.
tetris11@feddit.uk 7 hours ago
They do, but the percentage of what they owe compared to income is low. If I paid only first bracket of my income, and then skimmed on the upper brackets, the IRS would hunt me down
13igTyme@piefed.social 4 hours ago
Realistically, I doubt they have enough funding to go after any at this point.
slaacaa@lemmy.world 46 minutes ago
Image
brownsugga@lemmy.world 20 minutes ago
The original name was “Horse and Sparrow” as in if we give the horse enough to eat, there will be enough undigested food in his shit for the sparrow