Posted on 04/12/2017 11:08:51 PM PDT by Freedom56v2
The Trump administration, at work on a new plan for tax reform, is reportedly considering a plan to cross into one of the most dangerous territories in American politics: fiddling with the Social Security system. According to multiple reports, the administration is entertaining the possibility of eliminating the 12.4 percent payroll tax, which would require it to find a new dedicated funding source for the retirement checks that millions of Americans count on in their old age.
The plan, first reported by the Associated Press, would be part of a major overhaul of the tax code that would make the US system look much more like that of many European nations, which long ago adopted a Value Added Tax model. A VAT is a form of consumption tax that falls on consumers rather than producers.
The VAT model under consideration would generate significantly more revenue than the current corporate tax, allowing the elimination of the payroll taxes that fund Social Security and, all other things equal, giving workers a considerable boost in their take-home pay. (The 12.4 percent payroll tax is split evenly, with 6.2 percent paid by the employer and 6.2 percent paid out of the worker’s gross wages.)
But as former president George W. Bush learned, people start getting nervous when politicians in Washington mess with Social Security.
For better or worse, the system was set up by design to be funded by a dedicated tax that appeared on every worker’s pay stub throughout their working lives. One thing that did was create a sense of ownership of the benefit -- a sense of “entitlement,” though not in the pejorative sense of the word as it is commonly used today.
(Excerpt) Read more at finance.yahoo.com ...
No, no, no....a thousand times no! My wife and I pay heavy SS taxes and income taxes all our 40+ year working career, and now they want to switch to a consumption/sales tax as we transition to retirement and start spending our life savings?!? No thanks!
“Hidden” (VAT) style taxes are a bad idea on top of it...allows politicians to raise tax rates with the product producer taking all the blame for higher prices.
I agree with an earlier poster that this further “disconnects” your (& your employers) working contribution to SS, and gives it more of a welfare/entitlement feel, even if the way they are running it now your contribution goes instantly from your paycheck directly to current recipients check w/o a “trust fund” or “investments” going on in between.
Socialist Schools are the 1st.
Replacing income taxes and payroll taxes to a consumption tax does have the benefit of clawing back payments made to the gibmedats and dindunuffins.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Don’t kid yourself, some form of the Earned Income Tax Credit will be around forever, no matter who or what party is in power.
That is exactly what I was thinking!
The article doesn’t match the title.
No where in the article is there any explanation for how this plan would affect your present social security payments, much less what the effect would be on future Social Security payments.
It discusses how Social Security is funded.
Further, the author is stupid or uninformed as to whether or not one will receive more than they laid into the system.
There is a thing called compound interest and you should be able to draw down all monies you paid into Social Security as well the interest you would have earned.
There will be no change to benefits for those currently receive SS or those nearing that age...
And [Trump] looked at one and said, ‘What is that?’ And I said, ‘Well, that’s a change to part of Social Security.’ He said, ‘No. No.’ He said, ‘I told people I wouldn’t change that when I ran. And I’m not going to change that. Take that off the list.’ “
bump
For those FReepers approaching 65 years old that are veterans be very careful about Medicare. I’m warning you now because I’ve been having some strange things going on with the process. I got my Medicare card showing Part A and B. Part of the card was to be sent back to Medicare if you opt out of part B. I got a phone call (cell) telling me to send the portion of the card back. How did they have my cell phone number? Why would they want you to opt out? Funny thing is, if you drop part B, your VA medical benefits are suspended until the January of the next year. After going to the Medicare website to verify I was really enrolled, I was given a list of 5 or 6 things I was qualified for immediately. Which were exactly the things I was in the VA for this last year. It’s like the information came from the VA. There’s a minefield out there guys, be aware.
Absolutely brutal for those who have been paying in for a lifetime—and then would continue paying via a VAT.
And [Trump] looked at one and said, ‘What is that?’ And I said, ‘Well, that’s a change to part of Social Security.’ He said, ‘No. No.’ He said, ‘I told people I wouldn’t change that when I ran. And I’m not going to change that. Take that off the list.’ “
As I said, I have heard that too but that anyone concerned may want to keep an eye on this and remind congress critters and speaker Ryan that President Trump said NO changes.
From what I understood, Trump wanted to monkey around with SS and eliminate the mortgage interest deduction, but his advisors told him not to, so he took both off the table.
So much conflicting news and fake news. Who the hell knows what is true
I don’t like the idea of a VAT tax paying for Social Security —as article says it remove it from the idea of the fact that people have paid into Social Security for years on the promise that they would receive their money plus interest...
Actually, I don’t like a VAT for any reason!!
Frankly I wish people could have had their money to invest themselves—but to start funding SS with a VAT is just a lousy idea!
I hope Trump pulled that off the table too.
The liberal congress under Obama pushed for a VAT during his first 2 years in office. Nancy Pelosi was a great proponent of the VAT as was Schumer
In reality, there is little difference between a VAT and a sales tax as you are able to effectively pass the VAT all the way into the consumer/end user with tax credits for other payments. The only real difference is their VAT is larger than our sales tax and the tax must be included in the display price whereas our sales tax does not typically (although some attempts have been made to get sales tax in the US to work the same way).
“fiddling with the Social Security system”
SOMETHING THE RATS HAVE BEEN DOING SINCE ITS INCEPTION.
FACTS:
History Lesson on Your Social Security Card
Just in case some of you young whippersnappers
(& some older ones) didn’t know this. It’s easy to
check out, if you don’t believe it. Be sure and show
it to your family and friends. They need a little history
lesson on what’s what and it doesn’t matter whether
you are Democrat or Republican. Facts are Facts.
Social Security Cards up until the 1980s expressly stated
the number and card were not to be used for identification
purposes. Since nearly everyone in the United States now
has a number, it became convenient to use it anyway
and the message, NOT FOR IDENTIFICATION, was removed.
Franklin Roosevelt, a Democrat, introduced the Social
Security (FICA) Program. He promised:
1.) That participation in the Program would be
Completely voluntary,
No longer Voluntary
2.) That the participants would only have to pay
1% of the first $1,400 of their annual
Incomes into the Program,
Now 7.65%
on the first $90,000
3.) That the money the participants elected to put
into the Program would be deductible from
their income for tax purposes each year,
No longer tax deductible
4.) That the money the participants put into the
independent ‘Trust Fund’ rather than into the
general operating fund, and therefore, would
only be used to fund the Social Security
Retirement Program, and no other Government program, and,
Under Johnson the money was moved to The General Fund and Spent
5.) That the annuity payments to the retirees would never
be taxed as income.
Under Clinton & Gore
Up to 85% of your Social Security can be Taxed
Since many of us have paid into FICA for years and are
now receiving a Social Security check every month —
and then finding that we are getting taxed on 85% of
the money we paid to the Federal government to ‘put
away’ — you may be interested in the following:
—————— -———— -———— -———— -———— -———— ——
Q: Which Political Party took Social Security from the
independent ‘Trust Fund’ and put it into the
general fund so that Congress could spend it?
A: It was Lyndon Johnson and the democratically
controlled House and Senate.
————— -———— -———— -———— -———— -———— -———— —
Q: Which Political Party eliminated the income tax
deduction for Social Security (FICA) withholding?
A: The Democratic Party.
————— -———— -———— -———— -———— -———— -———— -——
Q: Which Political Party started taxing Social
Security annuities?
A: The Democratic Party, with Al Gore casting the
‘tie-breaking’ deciding vote as President of the
Senate, while he was Vice President of the US
-————— -———— -———— -———— -———— -———— -———— -
Q: Which Political Party decided to start
giving annuity payments to immigrants?
AND MY FAVORITE:
A: That’s right!
Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65,
began to receive Social Security payments! The
Democratic Party gave these payments to them,
even though they never paid a dime into it!
—————— — —————— -———— -—— —————— -———— -————
Then, after violating the original contract (FICA),
the Democrats turn around and tell you that the Republicans
want to take your Social Security away!
Social Security is most definitely not an entitlement. It's earned income benefit with a form of government retirement system. It works because it's assumed our government is rock solid and will not default on paying this to those who earned it. It's not an entitlement and most certainly not a hand out. It was earned by the taxpayer who receives it unless it is given to immigrants who did not pay enough into it to qualify for the standard 40 quarters of paying into it. They had better think of ways to reinforce SS and not mess with it. For millions and millions of people; it's all the income they have to live on. Sad but true.
Sense of entitlement to Social Security is precisely the problem. We are falsely under the impression that we are entitled to something that we are not entitled to. That false impression is a major problem.
The payroll tax is a tax. It is not an insurance premium. It is not an annuity. Per the Constitution Congressional spending of tax revenue can change at any time.
NO one mentions all the funds left in by those who die short of collecting SS or Medicare. That money does not go to their families or roll over the the spouse’s account.
My pastor died a month before his first SS check was due, they kept every dime of 40 yrs working 2 jobs he paid in. Both he and his wife worked 40 yrs each and paid into SS.
The spouse if female is allowed to draw off their spouses it it is the larger, they lose every dime they paid into SS for 40 yrs to the system. There does need to be a better safe way to invest and grow the existing funds. Medicare is DICTATORSHIP CARE worse health care than DUMBO’s , especially if your secondary is also a DICTATORSHIP Military healthcare plan.
Make congress restore the TRILLIONS they stole from both funds and left worthless IOU’s. Congress should not be able to add SS/Medicare or Military health care that is already pre-paid, for their general fund. It should be a dedicated fund for the purposed it was meant for.
My vote is National Sales tax, even the low life’s have to pay for what they buy, even visitors to the US have to pay it. And make a balanced budget a must. TN is sales tax only, except for the very rich who pay a Halls Income Tax. We are Mandated to balance the budget yearly. Each pay according to what they spend, exceptions are food and medical no sales tax there.
Buy a $30K car vs a $200K car that rich person actually pays more. And eliminate sheltering income off shore, make congress pay their taxes...rangel yours are well past due.
I hope it is fake news too. I have heard first hand from some seniors that they have heard Trump will take away their SS and Medicare.
I know where this idea comes from, but it is best to leave SS and Medicare alone for now.
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