AARP's Tax Trap

WSJ ^ | November 1, 2006 | WSJ

[Brilliant]

Social Security was supposed to be a killer issue for Democrats... But suddenly the tables are turning on several Democratic candidates because of their endorsement of the tax-increase agenda of the ...AARP.

The liberal entitlement lobby has asked candidates around the country to fill out a questionnaire asking, "Will you support a balanced Social Security plan to continue the program's guaranteed benefits for future generations?" That may sound innocuous, but here's how AARP defines its balanced plan on its Web site... "AARP believes that a bipartisan plan that balances additional contributions from high income workers with modest adjustments in future benefits can maintain guaranteed Social Security benefits for future generations."

...in Washington "additional contributions" means a tax increase...

Thus if you make, say, $100,000 a year...tough luck; the folks at AARP think you're rich. They supported the elimination of the income cap for Medicare's portion of the payroll tax (2.9%) as part of the Clinton 1993 tax increase, and now they want to do it for the other 12.4%. A worker earning $150,000 would pay roughly $6,900 more each year in "additional contributions"...

...for a handful of Democrats in hotly contested House seats... it's become a political liability. That's because their GOP opponents refused to take the AARP pledge and are making an issue of this Democratic support for raising taxes on middle- and upper-income wage earners...

Democrat Melissa Bean -- who is trying to hold her seat in an affluent district near Chicago -- now claims she never supported the tax increase... And AARP is helping her disavow her pledge...

the AARP "balanced" plan -- requires either raising taxes or cutting the future benefits of young workers, or both. That is, AARP would make today's lousy Social Security deal for young workers even worse...

[Brilliant]

Hate to say it, but it's already too late to fix social security. A massive tax increase, together with a massive benefit cut, can't really be described as a "fix."

[goldstategop]

The Democrats won't agree to privatizing Social Security, which is the only way to put the retirement plan on a sound financial footing. That means the only way to keep Social Security afloat is to either raise payroll taxes or cut benefits. Oops!

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus

[BeHoldAPaleHorse]

A massive tax increase, together with a massive benefit cut, can't really be described as a "fix."

It can be described as a "fix" if you resort to the argot of the heroin junkie.

[MichiganConservative]

Just what is it with people who get frightened at the thought of being able to keep your own money and do with it as you want? You could open up one of those savings accounts that advertises 5% on TV and you'd probably be better off than with Social Security. If you're a black man, not only will you most likely see a negative return on Soc Sec, but the money you put in isn't transferable to anyone upon your death like a bank account or investment portfolio is.

Social Security is the fraud that just keeps on screwing America.

[pleikumud]

Socialist Security should be completely dismantled. Everyone should be given the option to receive a lump sum payment equivalent to his/her contributions, employer contributions, plus a nominal rate of interest. Most people under about 50 would bail out now. Cease all new participants in SS effective 1/1/2007 (for example). Those already retired or about to retire can stay with it, if they want, or they can also receive a lump sum payment now. The remaining retirees will be dead in perhaps 25 years, bring an end to this corrupt socialist system.

[Brilliant]

I honestly don't think that privatization will work at this late date. If they'd done it back when Clinton was President, it might have. However, Bush tried to get some traction on privatization, and the Dems pointed out that his plan would cost $3 trillion. Any plan that costs $3 trillion is not a solution. A solution is when you make what appears to be a minor adjustment, and use the apparently inconsequential spread over several decades to close the gap. The easiest way to achieve that kind of a solution would have been to privatize enough of social security so that the social security surplus was going entirely into private accounts. But as the social security surplus dwindles, that becomes more of a pipe dream. Putting a couple hundred billion into private accounts at this late date is not going to do much.

And we aren't even doing that, nor will we ever likely do that, at least during my lifetime.

[EricT.]

To Gen-Xers like me, the AARP is a bunch of greedy old farts that want me to work harder so they can continue to reap what I'm sowing. Look for that bunch to go out of business in the next quarter century.

[Constitution Day]

To Gen-Xers like me, the AARP is a bunch of greedy old farts that want me to work harder so they can continue to reap what I'm sowing.

Same here.
I call them the Geritol Mafia.

[aculeus]

AARP, telling grandparents to screw the grandchildren.

[fatnotlazy]

Just what is it with people who get frightened at the thought of being able to keep your own money and do with it as you want?

***

Thanks to the Democrat Socialists, we now depend on "the government" to do everything for us, even wiping our noses.

[capitalist229]

The retirement lobby has the votes to control Congress.

So the govt will have to print any money needed to prop up Social Security and Medicare.

The resulting inflation will be a regressive stealth tax on everybody.

Since inflation is under-reported in CPI, seniors get screwed in the end.

BUMP

[Brilliant]

It's interesting that the Dems and the AARP have for years been telling us that there is nothing wrong with social security. It's a safe investment and a good investment. If you pay what we want into the system, you will be assured that when you retire, social security will be there to provide the promised benefits.

Now the AARP says that it thinks that if we increase payroll taxes and make "modest" cuts in benefits, we can honor our social security commitment. But that wasn't the commitment. The commitment was that if we paid what we're paying now, we would certainly get the promised benefits.

Sounds like they are repudiating the commitment to me.

[fatnotlazy]

It's sad....AARP was a reasonably good organization...my father and mother belonged, so I signed up too once I hit 50. No more. Once this membership expires, no renewal from me. They made their bed with the Socialist Democrats.

[JLGALT]

I signed up when I turned 50 also. Then I read some of the messages on their message boards and their magazine. All totally socialistic crap! I quit immediately!

They are no more than a front for commies!

[fatnotlazy]

I put up with some of the organization's nonsense because at least initially, I could get some travel discounts through AARP, but more recently, I found out I could get the same or even better deals via internet and other sources. I've heard the same from others regarding their insurance packages and other programs they offer. In fact, even my late father, who had homeowners and auto insurance through AARP, quit their insruance racket when an agent in his neighborhood offered better and cheaper insurance coverage.

Now there is no reason to belong, unless you're a socialist and go along with their agenda.

[yoe]

The Democrats won't agree to privatizing Social Security nor will they agree to President Bush's plan for all Americans to enjoy the SS plan our elected - nay all federal employees have. In the President's first SOTU address, he spelled out what those plans were, there are about four + - however, by the time the pundits, the left and the lamestreammedia finished their versions, the actual plans and how they work were lost. (start here)

[traviskicks]

AARP pushing tax increases and opposing privatization alert.





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[Feverishb]

So many good resources out there on Social Security today. Here are just a few of them, posted with a minimum of editorial comment: One survey shows that small business owners recognize that Social Security needs to be fixed, and soon. Another shows that even socialist Sweden has recognized the benefits of incorporating personal accounts into their Social Security system. In another, President Bush reiterates his commitment to fixing the system. Finally, Carrie Lukas explains why women in particular should be pressing to fix Social Security., over in TownHall. A few other tidbits: -- It was said above that a reform proposal would "cost" $3 trillion. That's a myth circulated by opponents of personal accounts. Most of the Congressional proposals, as well as the President's, would save a lot of money, usually trillions, relative to current law. Go to the Social Security Actuary's page for the evidence. -- Finally, it bears repeating that the greatest cost comes from inaction. In just the last three years, the total Social Security shortfall has grown from $10.5 trillion to $13.4 Trillion.

[Feverishb]

Oh, and there is one more important point on the AARP advocacy of tax increases. They are certainly free to advocate an increase in the payroll tax base if they wish, but all should be cognizant that this would do much less for Social Security than they usually claim. Though they claim that increasing the cap on taxable wages would solve more than 40% of the problem, the actual SSA score of their proposal shows something different. That provision would only close about 17% of the program's long-term annual deficits, and would only delay the onset of permanent cash deficits from 2017 to 2021.

[palmer]

Everyone should be given the option to receive a lump sum payment equivalent to his/her contributions, employer contributions, plus a nominal rate of interest.

I have saved adequately for retirement so far and I will gladly accept nothing in exchange for getting the monkey off my back (and everybody elses).