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Why does raising the retirement age hurt young people?

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Re: Why does raising the retirement age hurt young people?

#91

Post by nradov »

Buttons840 wrote: post #85
fsckboy wrote: post #72

Earlier quoted context omitted.

> Yes. This means that if we double the taxes on the wealthy we will roughly double our total taxes collected. A neat trick. no, you won't, people change their financial decisions in the face of taxes. increasing taxes will slow the economy, bringing in a change of party in the whitehouse and congress, and taxes will be lowered again. high taxes don't work, and people don't like them. > It's true that the top 50% pay…

Taxes are on whatever we want to tax. Instead of taxing income or spending, tax wealth. Will the wealthy make themselves less wealthy in order to avoid a wealth tax? I don't think so. Tax the top 1%; even with a wealth tax they'll still be able to afford multiple homes and a yacht--hell, there are people who can afford two homes and a yacht and don't even fall in the top 1%, so people will still be able to have plent…

There are some theoretical advantages to a wealth tax but in practice it would be extremely difficult to implement. The issue is that much wealth isn't cash in a bank account or holdings of publicly traded securities but rather equity in illiquid private investments. And some of that is offshore, so would you only tax wealth held in the USA by American citizens or would it apply more broadly?

Like one person I know is a German citizen living and working in the USA with a permanent resident visa, and she owns some forestry land in Canada. Should that land be subject to a wealth tax and if so how would you value it? Does the IRS then need to hire an army of bureaucrats to calculate valuations on those assets?

Re: Why does raising the retirement age hurt young people?

#92

Post by nradov »

schrodinger wrote: post #75
danaris wrote: post #67

Earlier quoted context omitted.

Retirement used to be an age, when we had defined-benefit pensions. As long as you were at least (say) 65, if you retired, you got $X/month for the rest of your life. None of this "you only get to retire if you were lucky enough to make enough your whole life to save enough that it won't run out before you die—and don't guess wrong about when that happens!" None of this "too bad, the stock market crashed just when yo…

Yes, this. I know this type of comment is discouraged by Hacker News but I really want to help you emphasize that retirement used to be a guarantee by the US government after paying into social security all your life. Now… I don't know.

Social Security is still guaranteed by the US government.

Re: Why does raising the retirement age hurt young people?

#93

Post by MattPalmer1086 »

fsckboy wrote: post #70
missedthecue wrote: post #55

Earlier quoted context omitted.

It will probably have to look something like western Europe with massive across the board tax increases. I make $60k a year in the USA and my tax rates are about 12%, with no VAT. They'd probably need to look more like France, where a $60k income is hit with a 42% effective tax (adjusted for progressive rates) before 20% VAT is paid at the store.

vat is simply corporate income tax, it's a tax on "value added", i.e. profit or income. I don't know in europe whether that is on top of other corporate income tax or not.

VAT is not corporate income tax, and it is not levied on profit or income.

As a business, you can deduct VAT that you had to pay to others from the VAT you charged your customers, and you only pay the difference.

So the only people who end up paying are the final consumers. It is essentially cost neutral to a business - you just have to account for it properly.

UPDATE: in the UK, at least.

Re: Why does raising the retirement age hurt young people?

#94

Post by hiAndrewQuinn »

davidgay wrote: post #48
felipeerias wrote: post #37

Earlier quoted context omitted.

If pensions depend exclusively on what each person has contributed during their working years, then lowering the retirement age might theoretically help young people by opening up more senior positions for them. However, in many developed countries today’s pensions are mainly paid for by today’s workers, often through a combination of social contributions and taxes. In Spain, for example, the social security has a la…

> However, in many developed countries today’s pensions are mainly paid for by today’s workers, often through a combination of social contributions and taxes. If one accepts this hypothesis, then raising the retirement age is good for all previously-working people, as they now have less people to support and more workers providing that support...

Taken to its logical conclusion one could even argue that ending government backed retirement pensions entirely and letting people make their own decisions is the best idea.

Some people might plan to work until the day they drop, which is obviously a laudable goal. It's good to contribute to the economy.

Others may purchase an annuity for a target date years or decades in the future, which pay out in basically the same way as social security tends to.

Some (maybe most) would just save more for retirement, because they know if they don't no one will.

Realistically I suspect most people would hedge their bets dynamically go for a combination of these things. Which isn't all that different from the current system, where SS despite being over 20% of the federal budget is considered by most to be woefully inadequate even in the current day for a retirement plan.

Re: Why does raising the retirement age hurt young people?

#95

Post by maxerickson »

WalterBright wrote: post #76
maxerickson wrote: post #66

Earlier quoted context omitted.

The current tax rate for 2026?

The tax rate for the wealthy is the same in 2026 as in 2025 as in 2024.

Oh? And what would they have been without a change in the law this year?

Re: Why does raising the retirement age hurt young people?

#96

Post by Jensson »

WalterBright wrote: post #49

I'm very skeptical of this. It smacks of burning half your crops so the price of the remainder gets bid up. We can also examine it by pushing it further. What if the mandatory retirement age was 30? The wages for those under 30 will be higher because of supply and demand, but they'd also have to support all those people over 30 who are not contributing anything to the economy. In the net, early retirement will lower…

> In the net, early retirement will lower the standard of living of those still in the workplace.

More specifically it would lower the standard of living for everyone, if you don't count free time.

Re: Why does raising the retirement age hurt young people?

#97

Post by lenerdenator »

Buttons840 wrote: post #83
lenerdenator wrote: post #81

Earlier quoted context omitted.

And they then pass that expense off to the consumer, because praise be to the shareholders.

Companies can just raise prices without consequences? Is that free market competition in action? Snark aside. I've always heard the idea was that free markets and competition would drive down prices, and that if a company was to just raise their prices, they would actually lose money because people would buy from a competitor with better prices. Turns out companies can just raise prices though. What does it mean when…

> Companies can just raise prices without consequences?

Well, when they have a monopoly, yes, yes they can.

> Is that free market competition in action?

No.

Re: Why does raising the retirement age hurt young people?

#98

Post by general1726 »

conception wrote: post #87
general1726 wrote: post #74

Earlier quoted context omitted.

Unless you are having state pensions and taking money from taxable population and giving it to pensioners. This group keeps getting bigger thanks to constantly improving medical care, while taxable population is getting smaller thanks to declining birthrates. Cutting pensions would probably cause massive riots, so raising retirement age is only logical way forward to keep this social pyramid scheme alive a little bit…

There are lots of ways. Looking at ss specifically - https://www.crfb.org/socialsecurityreformer/ Social Security will be solvent over the next 75 years, but 16% of the gap between spending and revenue remains in the 75th year, meaning the program is not yet sustainable. YOUR POLICY SELECTIONS % OF GAP CLOSED Slow Benefit Growth for Top 20% Of Earners 11% Limit Spousal Benefits for High Earners 3% Create Minimum Bene…

There are also lot of ways how to sabotage this especially if you are a political party aimed at pensioners and your whole program is "we will increase pensions" which is more and more common in Europe.

As amount of pensioners grow, their political power does too and their interest in future of the country is about zero. Why should they care, it is not their future.

Re: Why does raising the retirement age hurt young people?

#99

Post by WalterBright »

FreakLegion wrote: post #90
WalterBright wrote: post #86

Earlier quoted context omitted.

> it would be hard to do in good faith QSBS is capped, and the SALT deduction goes away with increasing MAGI. They're targeted at the upper middle class, not the wealthy. The "S" in QSBS stands for "Small" business. The previous limits were fixed, and this change seems to be adjusting it for inflation. It's been around since 1993. An inflation adjustment is not a "cut". Even so, as I'm sure you're aware, these two it…

QSBS is only capped for sweat equity. My Series A lead gets a $200m exclusion. With the new $75m asset limit, the Series B lead will probably triple that. Things like QSBS and carried interest are absolutely part of what people mean by "tax cuts for the wealthy".

> Things like QSBS and carried interest are absolutely part of what people mean by "tax cuts for the wealthy".

No they aren't. Nobody mentions them on the news/editorials, nobody's heard of them but you and I. What people meant is the marginal tax rate.

I am not a tax accountant, and never heard of them before your mention. I spent some time googling it, and it looks like the limits were adjusted for inflation.

Re: Why does raising the retirement age hurt young people?

#100

Post by WalterBright »

maxerickson wrote: post #95
WalterBright wrote: post #76

Earlier quoted context omitted.

The tax rate for the wealthy is the same in 2026 as in 2025 as in 2024.

Oh? And what would they have been without a change in the law this year?

Not buying that the tax rates staying the same is a tax cut.
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