Besides being a leftist politics-of-envy argument in the first place and using the pejorative "excessive" in a biased fashion, there is pure numerical dishonesty in the numbers used in this statement.
The $34,000 U.K. figure is for those claiming benefits starting at age 66.
Your $117,000 figure is based on both people delaying taking their benefits from age 66 to age 70. As you well know, the 8% increase in annual benefits for each year's delay in benefits starting is designed to be actuarially fair versus taking the benefits at "full" retirement age of 66 (or whatever the exact such age is based on birth year).
Those who get the large annual figure will have forgone approximately $350,000 of benefits NOT collected in the 4 years between ages 66 and 70. Yet you make no mention of those dollars not taken when presenting your comparison of the difference in annual amounts in your "excessive" claim..
So you have made a dishonest claim in using the $117,000 annual figure rather than the apples-apple comparison of 100%/132% * $117,000 = ~$88,600 figure for the couple claiming those max benefits at age 66.
Is it your goal to outlaw / eliminate people delaying the date they start claiming benefits?
As you well know, "actuarially fair" means it cost the government on average approximately nothing to pay a higher annual payment for delayed benefits. Well, given adverse selection bias it probably does cost the government some *minute* amount in the long run (25-30 year perspective). But of course if you did outlaw/eliminate it, it would actually *cost* the treasury a small amount in the first several years after such a change.
You want to hold politicians to the standard of looking honestly at the numbers. You owe it to your readers and the American people to change the false comparison (benefits starting at age 70 vs those starting at age 66) to a proper one.
But of course you would have a much harder time making your politics-of-envy "excessive" claim stick when it is a *proper* numerical comparison.
No problem with limiting highly compensated benefits - except that benefits are already disproportionately allocated to low and middle-income workers. For example, someone reaching age 65 today can qualify for non-contributory Medicare Hospital Insurance after having paid less than $1,000 in FICA-Med taxes; and with an income that low, they probably are dual eligible for Medicare Part B, Part D and Medicaid - so, no Part B nor Part D premium, and no deductibles or copay's either. For comparison, there is no dollar cap on Medicare HI contributions (FICA-Med), nor the Health Reform income tax surcharge added for higher income workers, and then there are IRMAA surcharges for higher income retirees.
Similarly, because of Social Security's bend points, it is important to note that the only thing dramatically more "regressive" (or "progressive" to FICA taxes are Social Security's benefits.
I've paid in for 50+ years, my benefit will only be based on 35 years of earnings/taxes, and, I will never recover the value of the contributions I made, and the reduction in my wages to finance my employer's share of the contributions.
The problem isn't that the highest paid are not paying enough taxes or are receiving a disproportionate share of benefits - relative to the contributions they made.
The problem is simply that the government wants to buy votes by collecting less in taxes relative to the benefits provided - shifting the expense to future generations, those too young to vote, and generations yet unborn. The shortfall coming in the near term has been expected since the Clinton Administration.
Expect to see another "1983" like "fix" - that doesn't truly achieve sustainability - but is sufficiently balanced so as to allow those in the Beltway to finesse the change so as not to lose votes.
We do have income taxes that apply to “high” retirement benefits, but we could definitely reconsider the formula for linking pensions to lifetime earnings. This change, however would not in itself do much for long-term projections of the deficits of the pension AND health insurance systems.
We should shift the financing of these (and unemployment benefits from wage taxation to a VAT which a) taxes consumption rather than income that is partly savings and b) is probably easier to adjust to keep the sub-sustem if fiscal equilibrium.
Overall shifting to a consumption base seems like the more economically efficient way to tax...but in most places that have a VAT it comes on top of the income and wage-based tax system. So beware what you ask for. Instead of a swap, you might end up with both, and income/wage based taxation system plus a VAT on top. Hungry, hungry Uncle Sam...
Even a bit of that would be OK. We need a lot of revenue to close the deficit. Say VAT for health insurance and unemployment insurance and leave SS with the wage tax.
I mean, the government already admits they're stealing your income under the guise of "contributions", when in fact it's a tax. Why not just make it official as another Progressive Tax, your social security payments were, in fact, simply another way of taking your money with a con rather than an investment in your own future.
That's if we're not going to do the moral thing and simply pay back what was stolen and get rid of it.
Besides being a leftist politics-of-envy argument in the first place and using the pejorative "excessive" in a biased fashion, there is pure numerical dishonesty in the numbers used in this statement.
The $34,000 U.K. figure is for those claiming benefits starting at age 66.
Your $117,000 figure is based on both people delaying taking their benefits from age 66 to age 70. As you well know, the 8% increase in annual benefits for each year's delay in benefits starting is designed to be actuarially fair versus taking the benefits at "full" retirement age of 66 (or whatever the exact such age is based on birth year).
Those who get the large annual figure will have forgone approximately $350,000 of benefits NOT collected in the 4 years between ages 66 and 70. Yet you make no mention of those dollars not taken when presenting your comparison of the difference in annual amounts in your "excessive" claim..
So you have made a dishonest claim in using the $117,000 annual figure rather than the apples-apple comparison of 100%/132% * $117,000 = ~$88,600 figure for the couple claiming those max benefits at age 66.
Is it your goal to outlaw / eliminate people delaying the date they start claiming benefits?
As you well know, "actuarially fair" means it cost the government on average approximately nothing to pay a higher annual payment for delayed benefits. Well, given adverse selection bias it probably does cost the government some *minute* amount in the long run (25-30 year perspective). But of course if you did outlaw/eliminate it, it would actually *cost* the treasury a small amount in the first several years after such a change.
You want to hold politicians to the standard of looking honestly at the numbers. You owe it to your readers and the American people to change the false comparison (benefits starting at age 70 vs those starting at age 66) to a proper one.
But of course you would have a much harder time making your politics-of-envy "excessive" claim stick when it is a *proper* numerical comparison.
No problem with limiting highly compensated benefits - except that benefits are already disproportionately allocated to low and middle-income workers. For example, someone reaching age 65 today can qualify for non-contributory Medicare Hospital Insurance after having paid less than $1,000 in FICA-Med taxes; and with an income that low, they probably are dual eligible for Medicare Part B, Part D and Medicaid - so, no Part B nor Part D premium, and no deductibles or copay's either. For comparison, there is no dollar cap on Medicare HI contributions (FICA-Med), nor the Health Reform income tax surcharge added for higher income workers, and then there are IRMAA surcharges for higher income retirees.
Similarly, because of Social Security's bend points, it is important to note that the only thing dramatically more "regressive" (or "progressive" to FICA taxes are Social Security's benefits.
I've paid in for 50+ years, my benefit will only be based on 35 years of earnings/taxes, and, I will never recover the value of the contributions I made, and the reduction in my wages to finance my employer's share of the contributions.
The problem isn't that the highest paid are not paying enough taxes or are receiving a disproportionate share of benefits - relative to the contributions they made.
The problem is simply that the government wants to buy votes by collecting less in taxes relative to the benefits provided - shifting the expense to future generations, those too young to vote, and generations yet unborn. The shortfall coming in the near term has been expected since the Clinton Administration.
Expect to see another "1983" like "fix" - that doesn't truly achieve sustainability - but is sufficiently balanced so as to allow those in the Beltway to finesse the change so as not to lose votes.
We do have income taxes that apply to “high” retirement benefits, but we could definitely reconsider the formula for linking pensions to lifetime earnings. This change, however would not in itself do much for long-term projections of the deficits of the pension AND health insurance systems.
We should shift the financing of these (and unemployment benefits from wage taxation to a VAT which a) taxes consumption rather than income that is partly savings and b) is probably easier to adjust to keep the sub-sustem if fiscal equilibrium.
Overall shifting to a consumption base seems like the more economically efficient way to tax...but in most places that have a VAT it comes on top of the income and wage-based tax system. So beware what you ask for. Instead of a swap, you might end up with both, and income/wage based taxation system plus a VAT on top. Hungry, hungry Uncle Sam...
Even a bit of that would be OK. We need a lot of revenue to close the deficit. Say VAT for health insurance and unemployment insurance and leave SS with the wage tax.
I mean, the government already admits they're stealing your income under the guise of "contributions", when in fact it's a tax. Why not just make it official as another Progressive Tax, your social security payments were, in fact, simply another way of taking your money with a con rather than an investment in your own future.
That's if we're not going to do the moral thing and simply pay back what was stolen and get rid of it.
I agree that calling Social Security payroll taxes contributions is misleading. We should call a spade a spade and a tax a tax.