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Thanks For Paying Taxes. Here's A Receipt.

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

#181

Post by gnaritas »

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…

> If Social Security were a private company it would be considered a pyramid scheme and shut down.

No it wouldn't, your concept of pyramid scheme is flawed. By your definition, all insurance is a pyramid scheme. Pyramid schemes promise everyone they'll get out more than they put in and this eventually collapses. Social Security makes no such promise, it's insurance, they fully expect many people to die before getting out what they put in or even starting to get anything out at all. That's how any insurance works. Social Security is not a pyramid scheme.

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

#182

Post by dminor »

dminor wrote: post #167
ataggart wrote: post #127

Earlier quoted context omitted.

>His idea was that if people never saw what was in there... The problem of course is there's no "there" there. Any funds collected today by payroll taxes, and not used for today's benefits, are lent to the general fund and spent. There are no funds being saved for next year's benefits, much less the current tax payers. Now, it is true that the Social Security system then holds "assets" in exchange for that cash, name…

> Now, it is true that the Social Security system then holds "assets" in exchange for that cash, namely, government bonds. But this is just accounting fiction. No, there's no fiction - legally it must be paid back. That's why Social Security debt is included in the gross national debt.

9 misconceptions about Social Security: http://www.theatlantic.com/past/docs/issues/98jul/socsec.htm

The first addresses the "accounting fiction" aspect.

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

#183

Post by grandalf »

gnaritas wrote: post #181
grandalf wrote: post #107

Earlier quoted context omitted.

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…

> If Social Security were a private company it would be considered a pyramid scheme and shut down. No it wouldn't, your concept of pyramid scheme is flawed. By your definition, all insurance is a pyramid scheme. Pyramid schemes promise everyone they'll get out more than they put in and this eventually collapses. Social Security makes no such promise, it's insurance, they fully expect many people to die before getting…

Not true. See the definition:

http://en.wikipedia.org/wiki/Ponzi_scheme

Insurance is not a scheme "destined to collapse" when it runs out of new investors. Insurance is perfectly sustainable. In fact, some of the oldest companies in business today are insurance companies.

Social security is currently "designed to collapse" as the trustees report has warned for years. The program will run out of money sometime fairly soon unless the benefits are cut or the taxes raised. In fact, it has already collapsed several times and a new program has been reinvented, also named Social Security. Initially the payroll tax was 1% and the benefits constituted enough to live on.

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

#184

Post by grandalf »

anamax wrote: post #179
jbooth wrote: post #110

Earlier quoted context omitted.

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 c…

> 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. Since benefits are roughly related to FICA, extending the cap doesn't help much. It helps some, because the benefits system is progressive, in that folks who contribute a lot get less return on their contributions than folks who contribute just a little,…

The rich at the time might very well have opposed having to pay the 1% social security tax.

The inception of the program was based on a variety of too good to be true premises, the 1% payroll tax being the most notable, so I interpret the cap more as a symptom of this fantasy... and possibly a consideration of the stigma attached to welfare programs in those days.

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

#185

Post by jbooth »

alex_stoddard wrote: post #177
jbooth wrote: post #163

Earlier quoted context omitted.

I think government t-bills are a little more reliable than a hand-scrawled IOU note in a jar.

Maybe for an independent investor. But how can a t-bill be an investment for the government itself? I am naively assuming that what backs the value of a t-bill is the US government's ability to accrue future tax revenue to pay it back. What is it that makes a t-bill owed to Social security an investment rather than a tax deficit when it comes time to cut a social security check?

What backs a t-bill is the "Full Faith and Credit of the United States Government". Along with smaller amounts of gold, it's the foundation of most countries' national reserves, yes, "most", notably China. If the US gov't defaults, social security getting paid back will be the least of our worries.

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

#186

Post by jbooth »

yummyfajitas wrote: post #139
jbooth wrote: post #130

Earlier quoted context omitted.

Ohhhhh, we're talking about balancing the 2008 budget.. Well that doesn't make any sense, but I'm looking forward to your answers to my questions above on the mechanics of how that would work. (EDIT in reply: Yeah, that's fine, and I went with it, but talking about percentages of a 380 billion dollar deficit in the context of current events is just plain silly.)

From my previous post: "(Use the dropdown to select year=2008, the last year for which full data is available .)" I don't think I was unclear - jbellis certainly figured it out about 2 hours ago. As for the specific mechanics, I'll refer you to another post in this thread which provides a number of mechanisms: http://news.ycombinator.com/item?id=1745969 More or less any of them should work.

"More or less any of them should work"?

You want to burn a $290 billion dollar program to the ground, with consequences like "poor people don't get insulin", and you can't even be bothered to think about which top level line item should be moved around?

This is why Al Gore sighed into his microphone that time. Yeah, it lost him the election, but when are you people going to realize that studied ignorance is not the way to solve problems?

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

#187

Post by amh »

guelo wrote: post #145
stretchwithme wrote: post #137

Earlier quoted context omitted.

he's talking about the government lending money to the government, not our massive borrowing. even more obscene than this fiction is how the Federal Reserve prints money, lends it to the banks, who then lend it to the Treasury and collect 3% for doing so. Its such an obvious subsidy of that whole sector, without which would look much worse.

> he's talking about the government lending money to the government, not our massive borrowing. The point is US T-bills are considered one of the safest investments in the world but when people start talking about SS for some reason they pretend that they are worthless.

Treasurys are "safe" in the sense that the US will never default, since the government can simply print dollars as needed to cover the debt. So yes, you're guaranteed to get your 1% interest in nominal dollars... the question is, how much are those dollars really worth?

The dollar may not enter a hyperinflationary death spiral as some believe it will, but its days as the default world reserve currency appear to be fading fast.

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

#188

Post by TGJ »

jasonkester wrote: post #169
TGJ wrote: post #160

Earlier quoted context omitted.

I don't think your idea would ever work. I think the way the tax system gets by everyday with all the corruption and waste associated with it is by the simple premise "Out of sight, out of mind". Taxes are paid by the average Joe a little at a time, I think most Joe's would simply freak out if they received a total sum bill at the end of the year. Actually, your idea would work in a perfect system, but we know how ra…

I imagine they'd keep track of your withholding, so the "bill" would be for the difference between what you'd paid already and what you owe. Just like your current tax return. In the case of a refund, it might even take the form of a check that, if cashed signifies your intention not to file a return.

When you put it like that, I'd sign up.

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

#189

Post by gnaritas »

grandalf wrote: post #183
gnaritas wrote: post #181

Earlier quoted context omitted.

> If Social Security were a private company it would be considered a pyramid scheme and shut down. No it wouldn't, your concept of pyramid scheme is flawed. By your definition, all insurance is a pyramid scheme. Pyramid schemes promise everyone they'll get out more than they put in and this eventually collapses. Social Security makes no such promise, it's insurance, they fully expect many people to die before getting…

Not true. See the definition: http://en.wikipedia.org/wiki/Ponzi_scheme Insurance is not a scheme "destined to collapse" when it runs out of new investors. Insurance is perfectly sustainable. In fact, some of the oldest companies in business today are insurance companies. Social security is currently "designed to collapse" as the trustees report has warned for years. The program will run out of money sometime fairly…

That link supports me, not you. As I already said, Social Security doesn't promise anyone a profit, as long as benefits are managed properly, it can continue indefinitely. It specifically relies on people dying before they receive back what they put in. Social Security is perfectly sustainable, they simply have to cut benefits to an appropriate level or raise the retirement age. You clearly have some personal bias against Social Security that's making you not see it rationally.

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

#190

Post by kitt »

zumda wrote: post #155
kitt wrote: post #41

Earlier quoted context omitted.

And this is what I was about to post, but instead of 20-30%, make it 51%. Allow taxpayers to decide where (the broad categories the receipt listed are a perfect starting point) their tax dollars are going. The remaining 49% can be discretionary, let the government decide where that goes: fill in the gaps for items needed, but that no one wants to pay for. Such a policy would give people a sense of power over the mone…

But then the rich would have a lot more power over the budget then the poor.

1. That's pretty much already the case (lobbyists are paid by someone, and that someone isn't the poor).

2. You make that sound like a bad thing, when it's not.

Given the categories listed on the receipt, which one of those would you really be upset if a rich person decided to put 51% of his taxes to? Medicaid? Pell Grants? How about the National Parks?

"If the wars are important to you, use your money to pay for it, stop using mine," is pretty much my philosophy. Having no control over where my taxes go makes me significantly less pleased with paying them.

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