“Agreed. It’s actual screwing of the elderly who worked their whole lives only to have much of their savings and pensions stolen thru the income tax system. “
NOT TRUE.
1. The pretense is that individuals retirement, private and social security, is the 100% result of what individuals contributed to the plans. Not true.
2. What employers contribute to individuals retirement plans, private and social security is in fact compensation that is not taxed at the time the employer makes the contributions.
3. Employers pay 50% of the contributions for an individual for social security. (Except for “self employed” persons who make the contribution required of the self employed). The individual pays 1/2 and the employer pays one half.
4. The individuals contributions - to social security or a private pension/retirement plan is from the income of the individual that has been taxed already. The employers portion is not/has not been taxed when their contributions were made.
5. In retirement, the taxable portion of social security or a private pension is that portion of the benefit payments made that are determined to be derived ONLY from the contributions from the EMPLOYER. That is the number shown as “taxable portion” on the 1099 form.
No one has been screwed and what has always been appropriate taxation of private retirement plans are equally appropriate for social security - where only that portion of benefits derived from contributions that were not taxed when the contributions were made constitute taxable income when received in retirement.
If you want a totally different system, like a 100% flat tax, I’d be all for it. But there is no case that retirees have been screwed compared to working people.
3. Employers pay 50% of the contributions for an individual for social security.
Ummmm, no.
I have, my ROR is around 2.5% according to social security.
The employee pays 100% of his social security taxes. The government hides this fact by having it appear that his employer picks up 50%. If people saw how much the government was actually stealing from them there would be massive outrage. Can’t have that now, can we?
Disagree. Retirees are working people their entire lives.
But as for a flat tax, exempt just the first $x for reasonable survival purposes and yes you could certainly sell it. Including to me.