I am not sure what the point of this question is.
The tax--including the "employer's share" that you never even see, but is a cost to your employer of having you work for them, and which therefore ought to be considered part of your compensation--is not enough to pay for the program, and this disparity is only going to get worse with time unless something is changed.
Social security does not actually put your money into a savings account with your name on it; rather, it promptly sends it out the door to someone who is already retired, somewhere. By about 2050 there will only be two people working for each retiree, and you can imagine what it will be liked to be taxed half of what his or her benefit check is, plus the overhead of the program itself (the people running social security themselves need to be paid). If this money is not somehow taxed, it will have to be borrowed (resulting in bankruptcy) or created from nothing (resulting in inflation, which will only result in larger COLAs for people on social security, so it's not even a short term solution). So at some point--without severe benefit reductions or some sort of phaseout plan the program will collapse. It's not a matter of IF but rather of WHEN.
"If this money is not somehow taxed, it will have to be borrowed (resulting in bankruptcy) or created from nothing (resulting in inflation, which will only result in larger COLAs for people on social security, so it's not even a short term solution)."
The Federal Reserve has been expanding the monetary base almost vertically since the Bush recession began in 2007. Republicans like Ron Paul have been yowling predictions about end-of-the-world-as-we-know-it inflation for years but it doesn't happen.
Money creation under a floating currency system doesn't drive up inflation much unless the economy is approaching full employment and full capacity, and the US is nowhere near that.
(Click on each image to see it entirely.)
SteveInCO, we think alike.
When you retire, your kids (or your neighbors) cook and eat you.
(Or when you can no longer afford health care.)
How is pointing out the *fact* that the system is going to go bankrupt if nothing is changed somehow tantamount to wanting to eat seniors?
You don't offer a solution, you don't attempt to refute my arguments, you just impugn my motives.
Easy. When your kids have eaten you, you're no longer a financial burden on them.
Properly seasoned and cooked, as Jonathon Swift suggested in his Modest Proposal, you might be a tasty dish.
There's another benefit too, part of you will always be with your offspring.
Taxes will have to go up if the US wishes to be a (social) welfare state. The problem in the US is that people are scared shitless of taxes, but are (apparently) willing to pay shitloads of money for private healthcare....
The deficit needs to be solved by higher taxes, especially on the higher incomes.
Jobs, not deficits, should be the priority anyway.
The GOP crackpots succeeded in changing the subject away from job creation to deficit reduction after years of free-reign Republican economic policy in Washington left a smoking crater where the economy used to be. Consumer spending and business spending remain severely depressed, so sales are down, and the private sector has eliminated jobs as a result.
Ever since then, the Republicans have lectured that the solution to the mess they made is savage cuts in government spending and mass layoffs of government employees. The concept never had any traction in economic theory. But through sheer (and sometimes shrill) repetition, the GOP has managed to persuade a wide swatch of the public that, in economic terms, the solution to mass starvation is mass dieting.
It's a smokescreen but not a very good one. The GOP has been stroking deficit fears to do what they've always tried to do: cripple social safety nets like Social Security and Medicare. The transparent part is that if they really were concerned about deficits, they'd be calling for the end of corporate welfare programs and the irresponsible tax cuts for the super-rich, which are still on the books from the Bush era. They'd also be allowing more stimulus spending, instead of blocking Obama's good faith efforts to restore the economy while simultaneously blaming him for not doing enough.
Tax the churches? Sure, I'm with you on that. But the best way to raise tax revenues (without raising taxes) is getting people back to work, and jump-starting the cycle of spending and growth again.
A church tax is a tax imposed on members of some religious congregations in Austria, Denmark, Finland, Germany, Iceland, Italy, Sweden, some parts of Switzerland and several other countries. The Austrian tax is an interesting one.
The Yearly Cost of Religious Tax Exemptions in America: $71,000,000,000
http://en.wikipedia.org/wiki/Church_tax The Yearly Cost of Religious Tax Exemptions: $71,000,000,000 http://www.patheos.com/blogs/friendlyatheist/2012/06/16/the-yearly-...
Just think of the businesses that some of these religions have - the mormons with their knickers and tops
Beehive Clothing is listed on manta.com as having revenue between $100 - $500 million dollars. Even though manta.com won't show you the revenue data if you don't subscribe, you can see this info without signing up by simply by going to their "clergymen's vestments" category and checking "filter by 100 - 500 million" in the sidebar and there it is!
Any other business that cannot pay its taxes, is put out of business. Why would a church not be in the same position? If these are tiny churches with tiny congregations, their taxes would no doubt be tiny too. Why should they have a special status that "John and Jane's family bakery" shouldn't enjoy?. If you tax the churches, you are simply aligning them with the rest of society.
And I'm pretty sure that John and Jane, my fictional bakers, would agree.
If you want to add other things to this, do so by all means. But treating churches as exempt is not right. Business is business, whether you are giving people their daily bread literally or spiritually.
Business is taxed. Taxes go to the benefit of all, not just to the benefit of those who paid them. I think we should look long and hard at all tax exemptions. And then instead of exempting, you could do tax rebates when and where you felt it was economically and socially viable.
Ideological fundamentalism is rather like religious fundamentalism in its ability to ignore reality.
The S&P 500 earned negative 37% in 2008 alone. That's the cream of the Wall Street crop. Investments in other areas (such as real estate) did much worse. Retirees lost an average of 1/3 of their life savings. Some were wiped out entirely. Imagine what would have happened if men like George W. Bush, John McCain, and Paul Ryan succeeded in their efforts to privatize social security by betting it on the same Wall Street crap game that torched the economy.
Look at the chart you posted. Compare cost of Social Security to the cost of the Bush-era tax cuts, subsequent extensions to them, and the cost of cleaning up the destruction the Republican economic plan wreaked on the economy. Social Security has been around for generations, and in 2000 the budget was in surplus, meaning it was paid for. Then along come the GOP tax cuts for the rich, none of which were paid for.
Once the bills started arriving for the GOP spending spree and the economy lay in ruins, the Republicans started howling that aid to the poorest Americans deserved the blame, and renewed long-standing calls for the destruction of Social Security, Medicare, and Food Stamps. The cost of the tax cuts and corporate welfare programs, of course, were conveniently ignored.
The cuts that Romney and Ryan proposed were so savage that even the crackpots at the US Conference of Catholic Bishops said it was immoral to annihilate assistance to the poor while showering the rich with another round of lavish tax cuts.
The Republicans naturally ignored that aspect of "God's Work" and continued reciting the same shrill idealogical dogma: aid to the poor caused the recession and the "only way out" of a recession caused by severely depressed spending is that we STOP SPENDING altogether.
That's ideology, not economics. Indeed, when presented as the latter, the GOP's "blame the poor" fantasy has the same support from science and reason as Creationism. But the GOP has never pushed this hard for Creationism.
The cuts that Romney and Ryan proposed were so savage that even the crackpots at the US Conference of Catholic Bishops said it was immoral.
You said it quite well here.
Please provide an example of the "simple math" and "reality" which shows severe spending cuts have ever resolved an economic recession. That approach failed for Herbert Hoover and it's not working in Europe today, either.
The US national debt exceeded the GDP during World War II. The country never paid off that debt. Instead, the federal government racked up even more debt with massive spending on public works. The economy expanded like gangbusters as a result, and the debt as a percentage of the GDP shrank for the next forty years (until Reagan reversed the trend).
You cannot cut your way out of debt and recession. You can only grow your way out. We learned that lesson 70 years ago during the Great Depression. Europe is learning it again today the hard way. The Republicans are determined to ignore the lessons of history and follow Europe's example of failure, despite a long record which shows austerity doesn't work as an economic jump-starter.
On the other subject, imagine you had retired in 2000 at age 65 without Social Security, and with your entire life savings "simply invested" in real estate funds and stock index funds. Now imagine you're one of the investors who lost everything during the financial crisis. Now you're 72 and destitute. If the Republicans had gotten their way in the early 2000s, that's exactly the position millions of seniors would be in today. How could you possibly be "better off" that way?