Found here. My comments in bold.
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Here's a plan to secure retirement for all Americans — without spending any more government money. ("...without spending any more government money." Um, yeah. This I will have to see to believe.)
Recently President Barack Obama announced his support for expanding Social Security for our nation’s retirees. That is welcome news because Obama and other Democrats like Hillary and Bill Clinton have not always been the best friends of Social Security. (...)
Social Security is one of the most popular government programs of all time — even 70 percent of Republicans are in favor of it. And with good reason.
Since its inception during the Great Depression, Social Security has proven to be indispensable as the policy cornerstone of a decades-old philosophy (I'm sure the author would describe himself as "progressive." I wonder, what is progressive about an 80 year old failed program?)
which deploys the “visible hand” of government to foster a fairer and better economy for all. (Is that the purpose of Social Security, to engineer society? I thought it was an anti-poverty program.
And isn't society sooo unfair, according to the Left? Racism, sexism, homophobia, transphobia, hate... It's all worse than ever, isn't it? So, why is it that the "visible hand" of government hasn't actually helped?)
Not only is it the most stable component of our nation’s retirement system, (How can a bankrupt system be stable? The SS Trust Fund contains nothing but government debt instruments. Government owes the Trust Fund $2.79 trillion.
"Our retirement system" suggests that all retirement is "ours," that is, sourced from government. I think it's a Freudian slip, because the author will go on to oppose private retirement money.)
especially when compared to Americans’ other chief sources of savings — (SS is not a savings program, it's a tax with a promised future benefit. If you think it's a savings program, try to make a withdrawal, even after you retire. Try to use your SS as security for a loan. You can't do it, because it's not a savings plan. Your benefits are determined by a formula, which does not consider the actual amount the government has taken from you.)
their homes, their 401(k)s and IRAs — it also is the greatest anti-poverty program ever. (Oh, ok, now it's an anti-poverty program...)
Three-quarters of Americans depend heavily on Social Security in their elderly years. Nearly half would be living in poverty without it. (Yet this glowing success of a government program still still leaves 10% of retirees in poverty. Hm.
And can we ask, what could a person do with the money sent to SS if he'd been able to keep it? Going into retirement with one's own money invested as he choses, would he be living in poverty?
It's dishonest to subtract SS from the equation without considering what would happen if that money was left in the person's own wallet.)
Social Security is particularly important to retired women and racial minorities, but it is also beneficial for US businesses and the broader macroeconomy. During economic downturns, it acts as an “automatic stabilizer,” keeping money in people’s pockets which maintains consumer-spending levels. (This is an astounding claim, glibly offered without documentation or even explanation. It doesn't even make sense. The SS program takes money from workers and gives it to others. It simply moves wealth around. There are no new dollars involved.)
As we move deeper into this year’s presidential race, in which the future direction of our country will be decided, it’s time to elevate this debate to a new level. For this year’s candidates, the question should be not whether we should expand Social Security, but HOW and by HOW MUCH?
My recently published book, Expand Social Security Now: How to Ensure Americans Get the Retirement They Deserve, demonstrates that it is possible not only to expand Social Security but to double the monthly benefit. We can accomplish that by enacting tax fairness, (Can't wait to find out what the author considers fair.)
ensuring that all Americans contribute their share to the nation’s retirement system. That would bring us in line with the national retirement programs of other advanced democracies such as Denmark, Sweden and France. (Um, actually, democracies where socialism has advanced.)
The real challenge for the nation’s retirement system is not that it might go broke two decades from now (which is not going to happen, due to its dedicated funding base). (It's already broke. There's no money in it. It's gone, it's been borrowed by government and spent.)
The problem is that its payout is too meager. (I thought it was keeping seniors out of poverty? I thought it was a glowing success? But now the payout is too meager?)
Social Security was designed to replace only about 35 percent of a worker’s wages at retirement. Yet most experts estimate you will need twice that amount to live decently. But for most Americans, the other two legs of the three-legged stool of retirement — private retirement pensions and plans and personal savings centered on homeownership — collapsed during the economic bust of 2008, if not before. Tens of millions of retirees don’t have much more than Social Security, yet the monthly benefit is woefully inadequate. (Again the author acknowledges the inadequacy of this "successful" program.
And can we ask, why should SS rescue people from their own failure to plan? And why should people expect government to take care of them? And lastly, why should we trust government to do so, when its actions, especially in 2008, contributed the problem?)
The solution, as Sanders has been pointing out, is to expand Social Security, not cut it.
Even Sanders’ proposal would only add about $68 per month per beneficiary — better than nothing, but not good enough to make a significant difference. What the US really needs to do is to double Social Security’s individual monthly payout for the 43 million Americans who receive retirement benefits.
How much would it cost to double the monthly benefit? Approximately $662 billion. (For now. Wait until more baby boomers enter the system, and couple that with the inevitable increase in people not employed and thus not paying in. Disaster looms, my friends, and the author wants to speed up the out-of-control train careening toward the cliff.
And I seem to remember the author beginning his article with an assertion that expanding SS would not cost any more government dollars.)
That seems like a lot of money, but it’s achievable. Here’s how:
Eliminate the unfair Social Security payroll cap, which allows wealthy people to make a much smaller contribution to Social Security, as a percentage of their income, than middle- and working-class Americans. Currently any income above $118,500 is Social Security-tax free. (Hmm. That's "fair," is it? Remember the author likened SS to a savings account. That is, the contribution to the fund would correlate to the value eventually received from it. However, removing the cap will mean higher income earners will pay a much larger contribution with no increase in future benefit.
This means that there is, as I previously asserted, no "savings" element at all, for if a high income earner doesn't receive more as a result of contributing more, then the high income earner is simply being taxed. His income is being redistributed to someone else who did not earn it.)
The practical effect of the cap is that billionaire bankers and CEOs contribute a far lower percentage of their income for Social Security than their secretaries and chauffeurs. (And we all know that secretaries and chauffeurs deserve the money more than the person who actually earned it.)
Making the payroll contributions more fair and equal (Doesn't sound very fair for the one who is being taxed and receiving no benefit from it.)
would raise approximately $135 billion toward our targeted goal. (That seems like a splash in the pan. The Trust Fund collected $731.1 billion in 2012.)
Apply Social Security tax to investment income. Many wealthy Americans make a lot of their money through investment income instead of from wages. Yet they make zero Social Security contributions based on that income. By applying Social Security rules on this investment income — which is how Medicare is partly funded — we would raise billions of dollars more for doubling the Social Security payout. (In other words, add a disincentive to investments. Smart, real smart.
SS is a payroll tax. Investment income is not payroll. Oh, and by the way, it's more than rich people who invest. The author is advocating a new tax on a very large portion of the middle class.)
Eliminate tax shelters and loopholes for 1-percenter households and businesses, including for capital gains, investment income, “carried interest” and the truly outrageous “step-up in basis,” which exclusively benefits inherited wealth. (That is, money that has already been taxed.)
These function as direct federal subsidies to mostly affluent Americans. And they cost the national treasury some $350 billion per year. (No, no, no! These do not "cost the national treasury" anything! Money that remains in the pockets of taxpayers is not money that the treasury is entitled to. The only way one could make an assertion like this is with the preconception that all money belongs to the government first, and what the government "allows" you to keep is yours.
The other thing to account for is what this supposed $350 billion is producing by it not being extracted from the people who earned it. They build factories, offer venture capital, pay their employees, and create new products with this, their money. Transferring it to government provides no net increase of the number or value of those dollars, it simply relocates the money to someone else.)
The “step-up in basis” exemption is particularly repugnant. When a yacht or mansion or any other type of expensive asset is sold, the seller’s profit is subject to the capital gains taxation rate of 15–20 percent — about half the 39.6-percent tax rate that the wealthiest pay on their wage income. Normally, the amount subject to taxation is the difference between the sale price and the amount that the seller originally paid for that particular asset. But for inherited property, the difference is calculated using the date that the previous owner died and left it to the heirs. As a result, the appreciation in value is much less, and so are the capital gains taxes. Rather than a “step-up in basis,” this dodge might more accurately be termed a “step-up in privilege.” (it's not a "dodge," it's written tax law.
Notice how outraged the author is that a deceased would want to leave his already-taxed wealth to his family, and also his undocumented presumption that this money is better off in the hands of government.)
In 2015, this rule reduced federal revenues by a whopping $63 billion. (Typical for the Left, no account is given of how that money yielded benefits by remaining in private hands. Not only did it not "cost" the treasury, it probably increased revenues.)
That’s a greater amount than the $42 billion the Department of Housing and Urban Development spent on all affordable housing programs for low-income people. Of the more than 200 federal tax expenditures in the individual and corporate income-tax systems, this is one of the 10 largest. (This is not a "tax expenditure!" Money not taken by government is not a "tax expenditure!" It's not the government's money.)
And of course none of the income received from the sale of these inherited assets is taxed for Social Security purposes. If it were, at the usual 6.2-percent Social Security tax rate that all workers pay, it would generate another $19 billion for the Trust Fund. (Which will be borrowed and spend by the government...)
Eliminate the tax exclusion that employers receive for sponsoring their company’s retirement plans. (I'm beginning to suspect that the author is a mid-wit. Do you remember when he wrote told us about the other two legs of peoples' savings, employer pensions and personal savings? So the author wants to disincentivize employer pensions, thus kicking out one of the legs of the stool.)
That will raise another $100 billion (That will raise exactly zero as employers scale back or eliminate pension plans.)
that can be used for Social Security Plus. Not many people realize it, but every tax-paying American subsidizes the retirement plans provided by companies, even though a small minority of Americans — disproportionately the better-off — benefit from them. (What does the author think, that this money is free? A pension plan is part of the cost of having employees. If the money is used by the employer to fund a pension, it is money not received by the employee. Any benefit offered by the employer is funded by the employer rather than paid in cash to the employee.
The same can be said for SS, ironically for the author. It's money the employee never sees in his paycheck. It's a cost to the employee just as employer-provided benefits are.)
By implementing Social Security Plus, which would double the monthly benefit and make Social Security the de facto national retirement plan, employers would be liberated from having to provide retirement for their employees. So they will not need the substantial taxpayer-funded subsidies they receive from the federal government for their company’s retirement plan. (Oh, so the author WANTS to get rid of private pensions. This guy scares me.)
Scrap tax breaks that have failed to enhance the retirement security of most Americans, since these deductions also vastly benefit the most well-off: Savings vehicles such as 401(k)s and IRAs have proven to be ill-equipped to help most retirees for a very simple reason — you can’t put very much into your 401(k) if your wages are too low to save. (Another irony. 15% of a person's wage goes to SS. Wouldn't it be nice to have the money for your own use, rather than government's?)
And with aggregate wages in the US staying flat for the last three decades, the reality is that most middle- and poorer-class Americans haven’t been able to sock much away. Consequently, of the $165 billion that the federal government spends subsidizing individual retirement savings, nearly 80 percent goes to the top 20 percent of income earners. President Obama has proposed a universal 401(k), in which the vast majority of workers with no savings plan will be automatically enrolled in a 401(k) plan. But it seems pointless when wages are so low that the vast majority of middle-class Americans can’t accumulate sufficient savings. (Thank you government for increasing your burden on us, keeping our wages flat by deficit spending, imposing onerous regulations on the businesses that pay us, wasting trillions of dollars on hare-brained subsidies, corporate cronyism, wars, piss-Christ art, and foreign aid. So the brilliant author wants to give even more to government to fritter away. Incredible.)
The same is true for federal underwriting of homeownership, which totaled $154 billion in 2014 – nearly four times the affordable-housing budget.The federal subsidy for the home mortgage interest deduction amounts to around $70 billion per year, with Americans in the top 10-percent income bracket hoovering up a massive 86 percent of this federal subsidy. And the federal tax deduction allowed to homeowners to mitigate the cost of state and local property taxes they pay on their houses cost the federal budget another $32 billion in 2014; a study by the Congressional Budget Office found that Americans in the upper 20-percent income bracket reaped 80 percent of this federal subsidy.
Just to make sure everyone understands whom the tax code favors, homeowners also do not have to pay taxes on up to $250,000 of their capital gains profits when they sell their home, which doubles to $500,000 for married taxpayers. That exclusion amounts to a federal subsidy to the tune of another $52 billion. These three federal subsidies for homeownership mostly subsidize higher-income people; renters and most low-income Americans don’t benefit at all, and while some middle-income people benefit, the total amount of their deductions and subsidies are comparatively small. They would be far better off if we doubled their Social Security monthly benefit.
To put it bluntly, these tax-code favoritisms are nothing more than entitlements for wealthier Americans. The current system perversely amounts to a hidden subsidy for better-off people at the expense of everyone else. These affluent recipients of federal largess are the true “welfare queens,” since these subsidies are mostly not available to middle- and lower-income Americans.
If we combine those budgetary add-backs with our previous savings, we now have reached nearly $900 billion, well over the $662 billion level we needed to reach in order to enact Social Security Plus and double the national retirement system’s monthly payout. In short, just a few revenue streams — lifting Social Security’s payroll cap, taxing the capital gains investment income for Social Security purposes, eliminating the employer tax deduction for providing a retirement plan, and reducing some unfair deductions that vastly over-subsidize wealthier Americans — would raise more than enough revenue for creating Social Security Plus, which would provide a stable, secure retirement for every American.
And note that we were able to do this without spending a dime more in government money or national wealth than what is already being spent on the retirement system or subsidizing the wealthy. We are just shifting expenditures that right now benefit a small number of individuals and special interests to refocus these resources on the vast majority of Americans.
Tax fairness not only would create a more secure retirement, it also would act as an automatic stabilizer for the economy: Even during downturns, retirees would have a decent income that would help maintain levels of consumer spending. Moreover, this kind of system of Social Security Plus would better fit the type of high-tech digital economy that is slowly taking root. More and more Americans have been forced into becoming contractors, freelancers and temps, and so Social Security Plus would form a core part of the portable, universal safety net that is so badly needed for the many Americans today who are working part-time for multiple employers.
My proposed plan for Social Security Plus would form the core of a new kind of deal for American workers. Making our retirement system more fair, innovative and stable will vastly improve everyday Americans’ lives. It also will put the national economy on a more solid footing, helping to preserve the robust middle-class society that made the United States a magnet for the world.
Yet Obama has done nothing to close even the most egregious tax loopholes I’ve described above while president, and Clinton has been mostly silent. If she isn’t careful she is going to be scooped by Donald Trump, who has been more outspoken about closing these loopholes than most Democratic leaders. Wouldn’t that be ironic – if Trump beat Clinton in the electoral vote-rich states of Florida and Ohio, where so many retirees live, and won the presidency because he took a bolder stand on Social Security?
(I grew weary of commenting. In summary, the author has never seen a tax he didn't like. He seems to think government can solve problems if only it had more money when it has never solved a single societal problem; he is convinced, despite having no evidence, that your money is better spent by government than you; and he is sure that even more of what has gotten us into these financial problems will fix them.
It's insane.)
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