Ending taxes on social security
- Thread starter Hawk_82
- Start date
Yes. I've never thought it fair that SS be taxed. It's always been like mandatory savings, with the rate of return being low. Heck, some people never get back their contributions. If I had to compromise, I'd say taxable if withdrawn before 67 and/or if the person also has EARNED income.
Problem here is that DC has become comfortable with a sizeable amount of tax money; it would take some serious cajoling to get that through Congress.
You can't keep cutting taxes without cutting expenses.
And we know expenses are not getting cut.
Governor Reynolds is trying a form of this to garner political gain.
Ten years, maybe less, and the shit hits the fan.
And we know expenses are not getting cut.
Governor Reynolds is trying a form of this to garner political gain.
Ten years, maybe less, and the shit hits the fan.
I’ve never really thought too deeply on the topic and haven’t researched the repercussions. But my initial gut feeling is yes to some degree. Old farts need everything they can get. Plus it would have the side benefit of giving us all one more example to hate on Fox-brained boomers about how they are getting entitlements and being government leeches (again).
As a senior I’m able to deduct up to $25,000 of my benefits. They might do us a favor by increasing that but the senior population is increasing so at some point an enormous amount of the population wouldn’t be throwing any money in the pot. We still live here and benefit regardless of age.
I’m not against having to still throw a few dollars into the pot.
I’m not against having to still throw a few dollars into the pot.
If an old fart needs everything they can get, their SS benefits are probably not being taxed.
Benefits are only taxable if a taxpayer has OTHER income.
Many states don't tax it on the state level as well, including Iowa.
Yup. They love taxes and spending. I doubt anyone in Congress truly has a good concept of money anymore. It's not real to them. Members of the House and Senate should have to live under the Social Security system themselves, and not have a different pension plan.
Yeah, I wasn’t thinking that SS alone isn’t enough for most and even with some supplemental income many likely need all they can get. People are piss poor at planning and saving.
I’ll plead ignorance on this as SS is a ways off for me.
Are SS taxes redirected into the SS fund? Or just into the federal govt general tax revenue bucket?
Are SS taxes redirected into the SS fund? Or just into the federal govt general tax revenue bucket?
So the reasoning behind taxing SS is that it's basically a forced 401k account with an employer match. Taxes are deferred until the funds are withdrawn. The tax code applies to these funds the same as any other income. If people have a problem with tax treatment of this money, they should have the same problem with the tax treatment of their other income.
That other income includes retirement distributions and capital gains.
That's easy. Pretend. I want the money for my family.
Only if you allow me to invest the taxed portion into an individual account instead of giving Uncle Sam an interest free loan for 50 years, then maybe seeing a portion of that value return as all my contributions have been inflated away.
The current SS system blows for payers and recipients as government screwed it up, of course.
When people spend the SS many of the items they buy are taxed, so why tax them twice.
Why do you say "expenses are not getting cut"?
Expenses for services can and should be cut.
I care. For starters, stop sending money to endeavors outside the U.S.
No, but much of it is considered taxable ordinary income and gets taxed at progressively higher effective rates as your overall gross income increases.
I think eliminating SS benefit taxes is a bad idea. There are a lot of people who are making significant amounts of income AND are collecting social security. They don't need a tax break. It needs to be taxed for the good of the system and so as to not overly burden younger people with higher rates.
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This measure alone will fix whatever ills the SS fund has.
It just goes into the general revenue fund as part of regular income taxes.
I don't feel strongly one way or the other, but I do think it was a mistake when they switched the law to make up to 85% of SS benefits taxable. Fifty percent made sense logically, as that was produced by money that had not been taxed previously (the portion 50% that came from the employer, since the employer got a tax deduction when they paid it...so in that regard, it is truly double-taxation).
Are you suggesting the government collects payroll taxes on social security distributions?
I believe you’ll find the government collects income taxes on income, and they decided to consider social security distributions taxable income.
Standard Deduction for a in individual in 2024 is $14,600. The average income per month from social security in May, 2024 is $1,778 (or $21,336). That means about $6,736 would be taxable at the lowest tax rate of 12%. Tax collected would be $808 just based on that math. I believe though there is some other tax law that limits the liability and I don't have time to research that.
This income was not taxed when earned. I believe it should be taxed at distribution.
Those complaining about returns on it are erroneously comparing it to retirement account. The intent of this program is to keep as many widowed ladies from eating dog food as possible. It's a safety net for our seniors. I'd like to see a tweak to the amount that is taxed to fix the eventual solvency issues.
This income was not taxed when earned. I believe it should be taxed at distribution.
Those complaining about returns on it are erroneously comparing it to retirement account. The intent of this program is to keep as many widowed ladies from eating dog food as possible. It's a safety net for our seniors. I'd like to see a tweak to the amount that is taxed to fix the eventual solvency issues.
So it's about what you think people need rather than actual fairness of taxing people twice.
As far as "not taxed when earned" that isn't really true - half of it was if you're a wage earner. Your taxable wages, for income tax purposes, includes the amount that was withheld for SS & Medicare tax. For example, if you earned a flat $100k in wages, your employer would have withheld $6200 in SS tax and $1450 in Medicare tax, and you'll pay income tax on the $100k (ignoring standard or itemized deductions)...so that income was certainly taxed when it was earned. The employer will "match" those amounts when it files its' payroll tax returns; the company gets to deduct that, so those funds have not been subject to income tax. That's what I was getting at in my post above in saying that it makes sense to tax 50% of the benefits.
I'm sorry. I think we are all referring to different things. When I hear Social Security taxes I'm thinking payroll deductions. When I hear taxes on Social Security, I think I'm thinking taxes on withdrawals.
Fairness and what people need are always considered with respect to taxes as it should and must be. I think roughly half of SS recipients paid no taxes on it because their income consisted of SS and pretty much nothing else. The half that did pay something earned a higher income. I see nothing wrong with that although I might quarrel with the levels at which they kick in. It is taxes on these dollars that helps pay for those who can't.
I would also add that I voted No on the poll and against my personal interests.
Not really. Tax policy that applies to everyone who receives social security is not all that similar to individual choices regarding traveling, automobiles or homes.
But I realize this has been your shtick since back when you were Rub&blade, and no amount of reasoning has ever made a dent.
hawkeyetraveler
HB Heisman
If that’s the case then there is no way we should make that fund MORE insolvent than it already is. I’m Gen X and have paid in for 30 years now with 10+ to go. I fully expect to get far less benefit than boomers get now. If we want the program to be around for future generations then we have to figure out ways to either cut benefits earlier or increase funding.
Giving more money to current beneficiaries is counter productive to program longevity.
That aside, we are very wasteful with spending overall and I wish either party would actually do that when they hold the oval - it never happens. At least the Dems are honest about their intentions.
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