Submitted 2 weeks ago by VetOfTheSeas@discuss.online to workreform@lemmy.world
https://discuss.online/pictrs/image/6cb197e2-c944-46d1-918f-a616693ec02d.png
Reminder that during what many consider America’s middle class golden age for a couple decades after WW2 we were TAXING THE EVERLOVING FUCK OUT OF RICH PEOPLE.
Then, surprise surprise, the rich people started buying off politicians to change all that.
EAT. THE. RICH.
They are blood sucking leeches.
we were TAXING THE EVERLOVING FUCK OUT OF RICH PEOPLE.
Tax avoidance during this period was also at historic highs. One of the perks of the payroll tax was that it collected at the point of the employer rather than being paid directly by the employee. This put the liability for missed payments on the business (which is risk averse) rather than the individual (which often is not) and shrank the labor required for administration from “everyone with an income” to “everyone who pays a salary”.
Curiously, we choose not to do this for stock transactions and other big ticket revenue generating sales. Rather than demanding Wall Street assume liability for the vast number of brokerage sales the big clearing houses oversee, we politely ask that each individual stockholder report gains and losses at the end of the year. Private businesses are even worse. Rather than assessing their revenues through the major transaction arteries - banks and commodities/wholesale exchanges - we wait for businesses to self-report.
All this creates enormous blind spots in how taxation is accessed and collected in a way that practically invites business owners (especially small and low-volume business owners) to lie, cheat, and steal.
EAT. THE. RICH.
It’s a great bumper sticker slogan. But I don’t see any blood on your gums.
But I don’t see any blood on your gums.
Neither yours. I have visible, physical scars from fighting against capitalism and fascists. I don’t wanna eat them, I want them gone.
I’ve had the desire to write a satirical swiftian letter to the editor to a national paper talking about how to tax Americans “fairly” where every single American pays the same amount in taxes regardless of age and income. Billionaires and babies owing the same amount, some ridiculous amount like $50k per person. Then I realized some people might take it as an actual suggestion and try to put it into practice.
It was a tactical decision to turn people off of socialism/communism.
I think you’ll find it’s no longer needed.
This, 100% this.
Was this after the green new deal?
This is called a regressive tax. The Republican party should embrace the word regression. Their followers are too stupid to understand its meaning anyway.
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.
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.
But that’s never been the way it works. Your payment finances the government budget, one of whose functions is to pay out social security money to current retirees. If you set up the income tax in such a regressive way, there will not be enough money to pay social security, which is of course what Republicans want so that they can have another excuse to cut the program entirely.
Probably made sense at the time with reasonable minimum wage and super progressive income tax
The Republican party should embrace the word regression.
Never happen. It’s up to all of us to simply start refering to them as regressives so it becomes their name.
I’ve started to say “conservative/regressive” every time I mention them. I’m going to keep doing it and hope others join in until there’s enough of us globally to drop the conservative part since it truly doesn’t apply to them.
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
You can thank reagan for that. Before him, the megawealthy were taxed a LOT (i don’t have exact figures, but it was something like 60%). Then reagan came in with his bullshit “trickle down economy” and that was that.
i mean social security is taxes tho
oh, I’m not american and not entirely sure. Thanks for the correction.
There is a cap on social security tax so after you earn past the cap you don’t pay anything extra.
Elon Musk pays the same amount as a person who makes 190k a year.
Take away the cap and social security would be funded forever and a day.
I learned a lot about this by watching Sam Seder talk about SS. It is one of his hot topics.
Anybody voting for “lower taxes” was scammed into creating a class of ultra rich who don’t help society and that laws don’t apply to.
The taps at the top needs to flow less for the trickling down to happen, that’s common sense! /$
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…
It only trickles down to their mercenary politicians and the hatefluencers they buy to keep people ignorant and divided.
Can somebody eli12 it for me?
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.
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
Social Security is capped at $184,500
SS tax is 6.2% for individual and 6.2% for employer.
Employee A makes $184,500. $11,439 paid by individual and $11,439 paid by employer. $22,878 total.
22,878/184500=.124 or 12.4% tax.
Employee B makes $1,000,000. SS is capped at $184,500. $11,439 paid by individual and $11,439 paid by employer. $22,878 total.
22,878/1,000,000=.022 or 2.2% tax.
So someone making a million dollars would only have to give up 1.1% to SS tax and their employer 1.1% SS tax.
They will both pay the exact same amount into SS but the percentage isn’t as high because $815,500 of the million is not getting taxed.
IIRC both employee A and B will also get the same payout from Social Security, assuming both of their salaries were at that level (at the cap or higher) for most of their careers.
Just looking at social security tax will never give you the full picture though, it’s just a small fraction of overall income taxes. And it misses the fact that wealthy people increase their wealth through other means, like long term capital gains. Someone making $100M per year through investments probably won’t work a day job and will therefore pay $0 social security tax.
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.
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.
Social Security is not designed to redistribute a ton of money from the rich to the poor. And it isn’t used to fund the government so it doesn’t make the rich pay their “fair share”. It’s intended to force people to save so we don’t have a ton of poor seniors around.
Rich people are taxed up to a certain amount. So the rich and super rich pay in the same maximum dollar amount. But on the other side the benefits that they get out are capped in the same way.
It’s not supposed to be like a retirement plan where you assume you’re going to live on 80% of your income in retirement. It’s just there to ensure you have “enough”. The most money an individual can get out of social security, the maximum benefit, is $5181/month.
To be a little more accurate, Social Security Disability Insurance is redistributive by design.
Correct me if I’m wrong here.
But isn’t it cumulative?
They pay a certain tax rate on a certain amount of money. So they’re paying 12.2% within the bracket that covers that amount of earnings, then an additional 2.2% only on the income that falls into the next bracket.
So they’re paying the same rate as everyone else on the income within each bracket, right?
I’m sure these medical billionaires made their money in the worst way possible, but to accumulate that kind of wealth they’re generally not earning it as ordinary income.
“Buy, borrow, die” largely avoids income taxes because loans aren’t taxable income.
The issue is far more devious than simply taxing a higher income bracket at a higher percentage.
There has never been a more important issue in our time than the wealth gap and economic inequality.
This is mostly right but I think missing the point. It’s not 12.2% on the first bracket and 2.2% on the second. It’s 12.4% on the first $184,000 and ZERO On the rest. The 2.2% is not the marginal rate they are currently paying, it is the effective rate if you add up all the the paid divided by all the income. It’s so low because people with salaries beyond 184k stop having to pay any of this tax on their next marginal dollar.
And the reason this is a big deal is because this tax revenue is what is used to fund social security payments for older folks. The social security reserve fund that is running out (which will result in a significant run reduction in payment to these old folks) could possibly be all or mostly funded if we made people making more than $184,000 pay the same rate as everyone else.
Damn. How are we not French Revolution-ing these fucks?
Same amount maybe, not same rate. If the first 100k is taxes at 30% and the rest is at 2%, someone making 100k pays 30k. But someone making 1 million also pays around 30k + 18k maybe. But for the 100k person the total paid was 30%, and for the 1 million person the total paid was maybe 5% of their total. Warsaw away lower.
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.
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.
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.
Regressive taxation
It is. And it’s wrong. But part of how we got here is it was sold as not being a tax, even though it absolutely is.
The claim was it was a mandatory retirement investment program. Because the wealthy have their own retirements figured out they don’t need their payouts to continue to scale with their income, so their payments in shouldn’t scale proportionally either, since it is “not a tax.”
But why it is a tax is, one, most of us will never see a payout because the program is going to collapse before most of us retire, and therefore it is NOT a mandatory retirement program. And second, all payments in and out of government are fungible, so it really is a tax and a separate retirement supplemental program, where we use language around them to pretend they are one program.
Ironically, if we took all the money that was paid into Social Security and invested it in a real portfolio (actual investment), our generation would actually get something, and current generations would be getting significantly more. The issue is that because whether you like government or not, it is a money loser. It’s basically designed to be one. But that means using the government as an investment vehicle is in pure investment terms really really bad. Plus it also sets up a regressive tax as you pointed out.
most of us will never see a payout because the program is going to collapse
I have been reading this claim my entire life. Not even my entire adult life. Like, I remember hearing this when I was still a wee little kiddo, watching Reagan give speeches from my dad’s knee.
Social Security isn’t going bankrupt any sooner than the Pentagon goes bankrupt or the US Treasury goes bankrupt. It’s not something that can happen, mechanically speaking. Congress is always free to allocate more money to the program. The only way SS “runs out of money” is if Congress deliberately refuses to fund it.
And so much of the US economy lives downstream of senior citizens getting their checks on time that such a decision would be economically suicidal for the country. If it happens, it’s only because the US as a going concern is a failed state. And a real failed state, not just some hyperbole from the latest pundit circle.
Ironically, if we took all the money that was paid into Social Security and invested it in a real portfolio
You’d have a sovereign wealth fund.
But when you’ve got the national reserve currency, there’s no real incentive to do that. Your tax revenue is already driven by global economic growth. Our Federal Reserve Credit Window and our variety of grants, tax credits, and government contracts already incentivize capital accumulation within the scope of US taxable incomes.
You don’t need to collect a dividend from a business by holding its equity if you’re a federal government. You can just tax them. Dollars paid in dividends and dollars paid in taxes are interchangeable.
I’m not fully versed on the differences, but our Canada Pension plan is invested in various things.
Although, lately has come under fire for investment choices they’ve chosen.
They laugh at us struggling to earn a living off the sweat of our brow while they drink champagne and protect wealthy child rapists and traffickers.
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.
While this is certainly technically true most modern economists believe that companies compensate for this by offering lower wages, so it’s kinds 6 of 1, half dozen of the other.
Maybe put this way, if I didn’t work at my company they wouldn’t pay either half of the social security and medicare. So its mostly me who’s bringing that money to the government since I’m the catalyst.
Because it’s wage based. Nobody makes a million bucks as salary.
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).
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!
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.
Even on Lemmy, there’s always that one guy defending the 1%.
12.4%?!
*cries in dutch 49.5%
Well. They pay the same on everything up to each threshold.
Really interesting to see how vocal people are about this topic before they even know how this particular tax and distribution program works.
What about total taxation?
You cherrypicked one, and ignored rest on purpose?
Funny thought, inflation could fix all of this if everyone is making a mil.
JordanZ@lemmy.world 2 weeks 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 2 weeks ago
The other thing to get rid of is long term capital gains taxes and just tax capital gains as regular income.
nibbler@discuss.tchncs.de 2 weeks 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…
BillyClark@piefed.social 2 weeks 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.
timbuck2themoon@sh.itjust.works 2 weeks ago
The point of long term capital gains tax is so people don’t just yank money out all the time. It provides incentive to keep your money in the market.
That said, making the ltcg tax just 2% less than your income tax seems better than a flat 13% or whatever it is.
saltesc@lemmy.world 2 weeks ago
So what you’re saying is, social security should be, like…social?
RQG@lemmy.world 2 weeks ago
It’d also be nice if it offered actual security.
echo@lemmy.today 2 weeks ago
We’re talking about a cap and not a base, but yeah… remove the cap and everything gets better.
JordanZ@lemmy.world 2 weeks ago
That’s effectively what it is but it’s called the social security wage base.
chisel@piefed.social 2 weeks 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.
snooggums@piefed.world 2 weeks 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 2 weeks 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
HubertManne@piefed.social 2 weeks 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.
COASTER1921@lemmy.ml 2 weeks 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/
unitedwithme@lemmy.today 2 weeks 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.
RBWells@lemmy.world 2 weeks 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.
BarneyPiccolo@lemmy.today 2 weeks 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!”
Willy@sh.itjust.works 2 weeks 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 2 weeks ago
Pay their fair share is what it is called.6
RBWells@lemmy.world 2 weeks ago
Yes.
snooggums@piefed.world 2 weeks ago
YES