Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Thanks For Paying Taxes. Here's A Receipt.

npr.org

Post reply on HN
Print view View original

101–110 of 194 posts

Re: Thanks For Paying Taxes. Here's A Receipt.

#101

Post by jbooth »

grandalf wrote: post #52
DanielBMarkham wrote: post #28

The late senator Daniel Patrick Moynihan supported sending people statements of what was in their social security. His idea was that if people never saw what was in there, they'd never miss it when it was gone. I think this is a logical extension of that idea, and its great. I'd also like to see the flip side of the receipt contain a guess for how the same tax amount would break down the following year based on curre…

To be fair, the statements we get from Social security suffer from the following very serious problems, which actually have the opposite effect of the one you describe: 1) They aren't redeemable for the promised amount if congress lowers benefits, as it has many times already. We all know that benefits will be lowered significantly (or removed) by the time most of us here reach retirement age. Anyone under 40 should…

"These sorts of numerical tricks would never be tolerated if a private firm was perpetrating them."

You wrote that with a straight face?

Re: Thanks For Paying Taxes. Here's A Receipt.

#102

Post by grandalf »

jbooth wrote: post #101
grandalf wrote: post #52

Earlier quoted context omitted.

To be fair, the statements we get from Social security suffer from the following very serious problems, which actually have the opposite effect of the one you describe: 1) They aren't redeemable for the promised amount if congress lowers benefits, as it has many times already. We all know that benefits will be lowered significantly (or removed) by the time most of us here reach retirement age. Anyone under 40 should…

"These sorts of numerical tricks would never be tolerated if a private firm was perpetrating them." You wrote that with a straight face?

Yes I did. There is a precise analogy between Social Security and Madoff's fund, the only difference is that Madoff's rope was a bit shorter because he doesn't have the power to force all working Americans to sign up.

But, just as Madoff eventually ran out of new investors and due to a market dip was unable to continue to pay out the fake proceeds, demographic trends will make the US Government unable to pay out the proceeds promised to all the people who pay payroll tax every paycheck.

Already, the government has cut social security benefits drastically. I'm not talking about harming the rich, these are working class people forced to invest 12.5% of their lifetime earnings into a scheme that has zero guarantees and a history of profligacy.

Note: If you look at income + payroll tax, we don't have nearly as progressive a system as you might imagine. That would perhaps be fine if there were actually a safety net being provided.

Re: Thanks For Paying Taxes. Here's A Receipt.

#103

Post by jbooth »

grandalf wrote: post #102
jbooth wrote: post #101

Earlier quoted context omitted.

"These sorts of numerical tricks would never be tolerated if a private firm was perpetrating them." You wrote that with a straight face?

Yes I did. There is a precise analogy between Social Security and Madoff's fund, the only difference is that Madoff's rope was a bit shorter because he doesn't have the power to force all working Americans to sign up. But, just as Madoff eventually ran out of new investors and due to a market dip was unable to continue to pay out the fake proceeds, demographic trends will make the US Government unable to pay out the…

Well, if it was a private company, let's posit it's set to go broke in 40 years, it'd be trading up for the next 39 years and 364 days.

RE: Your views on SS in general, is that a populist argument for stronger SS and a more progressive income tax?

Re: Thanks For Paying Taxes. Here's A Receipt.

#104

Post by argv_empty »

hugh3 wrote: post #10
brown9-2 wrote: post #4

Earlier quoted context omitted.

re: "selected items", if you click through to the PDF there is a footnote attached: >4 Budget calculations are based on budget allocations obtained from the Office of Management and Budget using historical tables from the FY2011 budget submission as well as the Congressional Budget Office website for such items as interest on the debt, Medicare, Medicaid, and Social Security. My guess is that the real cause of "selec…

My guess is that the real cause of "selected items" is that the number of things paid for by your taxes are obviously much larger than could fit on a short list, and has a long tail. Well, of course that depends how you slice it. Break it down by department and it looks more like this: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_categor... The twenty-something listed departments account for 97% of the budget…

Interesting that this pie chart shows Social Security's budget as about five percent more than DoD's while the components of military spending listed on the sample receipt total less than half of the Social Security spending.

Re: Thanks For Paying Taxes. Here's A Receipt.

#105

Post by yummyfajitas »

jbooth wrote: post #100
yummyfajitas wrote: post #94

Earlier quoted context omitted.

no politician -- on either side of the aisle -- is seriously proposing cuts to Social Security or Medicare. Not true. Paul Ryan did, and even got into a fairly public fight with Paul Krugman about it [1]. http://www.roadmap.republicans.budget.house.gov/ [1] The fight was mostly over matters of little substance - Krugman told a few lies about Ryan which blogger Megan McCardle repeatedly debunked. The substance of the…

And then he walked it back - the way I saw that conversation was Ryan walking his statements back and Krugman trying to pin him to them, or, if you'd prefer, exaggerating them -- that's just more support for "noone will touch SS". If Ryan came out swinging and saying "YEAH i want to dismantle SS", that'd be different.

Krugman and Ryan never discussed matters of substance. The public fight I was referring to was bickering over whether Ryan specifically asked the right agency for a forecast. Stuff like this:

Krugman: "...Ryan could have gotten JCT to do a 10-year estimate; [...] he chose not to get that 10-year estimate. "

McCardle: "...I contacted Ryan's staff, who were happy to clarify that yes, they asked the JCT to do a forecast, and JCT said no."

As I said, nothing of substance. Just Krugman dishonestly attempting to paint Ryan as a liar (I believe "flim flam man" was the term he used).

On substantive matters, if you look at Table 1 of the CBO's score of Ryan's roadmap, you see that Ryan clearly proposes cutting medicare by just under 40% by 2040 (and even more drastic cuts after that).

http://www.cbo.gov/ftpdocs/108xx/doc10851/01-27-Ryan-Roadmap...

Re: Thanks For Paying Taxes. Here's A Receipt.

#106

Post by jbellis »

jbooth wrote: post #98
yummyfajitas wrote: post #91

Earlier quoted context omitted.

Medical services for the poor (medicaid) are comparatively minor, but you wouldn't know it, given how much emphasis the Republicans place on the question of the "welfare state". I'm not sure I'd describe medicaid as "comparatively minor". Medicare is $390B, medicaid $247B ($290B including the state contributions). I guess the threshold for expenses that don't matter must bet somewhere between $290B and $390B. http://…

Compared to the size of the government, or even just the deficit, it's comparatively minor. By your numbers.

390B + 240B is over 20% of the total 2008 budget. I guess we have different definitions of "minor."

Re: Thanks For Paying Taxes. Here's A Receipt.

#107

Post by grandalf »

jbooth wrote: post #103
grandalf wrote: post #102

Earlier quoted context omitted.

Yes I did. There is a precise analogy between Social Security and Madoff's fund, the only difference is that Madoff's rope was a bit shorter because he doesn't have the power to force all working Americans to sign up. But, just as Madoff eventually ran out of new investors and due to a market dip was unable to continue to pay out the fake proceeds, demographic trends will make the US Government unable to pay out the…

Well, if it was a private company, let's posit it's set to go broke in 40 years, it'd be trading up for the next 39 years and 364 days. RE: Your views on SS in general, is that a populist argument for stronger SS and a more progressive income tax?

If Social Security were a private company it would be considered a pyramid scheme and shut down. Imagine someone published a Fidelity internal memo to Wikileaks stating that all shareholders under age 40 were required to keep investing 12.5% of their salary every month, could not sell, and would receive a negative return upon reaching retirement age. It's so fafetched it's laughable.

I don't have a problem with the government requiring a 12.5% retirement fund outlay from workers. It's paternalistic but probably pragmatic. I do think it should be an investment based program rather than a pyramid scheme, and I do think workers should be guaranteed at least the rate of return of a very conservative market investment (such as a precious metal or a certificate of deposit would yield).

The original genius behind Social Security was that it was not a welfare program, it was sold as an investment program. However the books were cooked from day 1 because it achieved that only due to very skewed demographics (far more young workers than old workers/retirees), just as Madoff's fund was able to pay out returns only on the basis of having far more new investors than investors expecting returns.

So I'm opposed to the regressive nature of the Social Security tax mainly because the program is broken and thus it's only a regressive tax and not an investment program. Obama ran on a campaign promise of turning social security into a welfare program which simply means preventing the program from going bankrupt by deciding that only those who are deemed poor get the funds promised them.

Imagine if Madoff had tried to avoid jail by saying that he'd refund the money of all the poor people who invested with him. That's equally laughable.

Sadly, turning it into a welfare program is probably the most pragmatic approach, but if we're going to do that we should immediately do away with the payroll tax and allow the scheme to end so that those who don't aspire to be poor can start investing their 12.5% into an actual IRA. It would be fine with me if income tax rates had to rise a bit to cover the cost of Soc Sec as welfare.

Re: Thanks For Paying Taxes. Here's A Receipt.

#108

Post by jbellis »

eli wrote: post #79
Aetius wrote: post #16

Earlier quoted context omitted.

This is, after all, NPR...no surprise the war was prominent as they have a decidedly progressive news team. I won't call NPR liberal, but certainly left of center, and very critical (as they should be) of the wars.

Do you have any data to back that up? The empirical evidence shows that, for example, NPR is more likely to interview a conservative economist about a story than a liberal. I think they go out of their way to defer to right-of-center politicians because they are so afraid of the perception that they're liberal. In short, I think you're wrong.

> The empirical evidence shows that, for example, NPR is more likely to interview a conservative economist about a story than a liberal.

To be meaningful, we'd need to compare the ratio of conservative economists on NPR to conservative economists in the population.

Re: Thanks For Paying Taxes. Here's A Receipt.

#109

Post by jbooth »

jbellis wrote: post #106
jbooth wrote: post #98

Earlier quoted context omitted.

Compared to the size of the government, or even just the deficit, it's comparatively minor. By your numbers.

390B + 240B is over 20% of the total 2008 budget. I guess we have different definitions of "minor."

Hey jbellis, been doing some Cassandra this past week.

The original contention was just regarding medicaid -- 290 billion compared to a 3 trillion budget, with a > 1 trillion deficit. Entitlements all together add up to about half of the budget. They're big. But the original point was that nobody wants to touch medicare/SS but everyone makes Medicaid the bad guy. Makes you think they're more concerned with demographics and likely voters than budget arithmetic.

EDIT: Watches the downvotes. Chill out guys, it's just numbers. You'll win the house this fall, take it easy on HN.

Re: Thanks For Paying Taxes. Here's A Receipt.

#110

Post by jbooth »

grandalf wrote: post #107
jbooth wrote: post #103

Earlier quoted context omitted.

Well, if it was a private company, let's posit it's set to go broke in 40 years, it'd be trading up for the next 39 years and 364 days. RE: Your views on SS in general, is that a populist argument for stronger SS and a more progressive income tax?

If Social Security were a private company it would be considered a pyramid scheme and shut down. Imagine someone published a Fidelity internal memo to Wikileaks stating that all shareholders under age 40 were required to keep investing 12.5% of their salary every month, could not sell, and would receive a negative return upon reaching retirement age. It's so fafetched it's laughable. I don't have a problem with the g…

Well, for the record, SS is a very conservative market investment -- the surplus is invested in government T-bills every year, that's as conservative as you can get. Of course then people turn around and say it's the government writing itself checks or they're worthless IOUs or something.

As far as the finances, as I understand things, simply raising the cap on income would extend things out a bit, FICA doesn't get collected past 105k or something. That's also redistributive and you could say unfair, but the fact is that we have a big population bump retiring and no system to pay for their retirement is going to be fair to us.

EDIT: Also, I suspect any other mandated market investment that the government enforced would have even worse problems than SS. What happens when all of the baby boomers put daily selling pressure on the stock (or gold) market for 30 years? That might wind up being a way worse investment when it comes to the market prices at sell time, no matter how well the economy does.

Post reply on HN