Everyone’s been worried about Social Security for a long time and how to make it “sustainable” in the long term. We could cut spending on other programs and try to make a go of it, or we could cut benefits, or just watch the whole thing collapse. Or…
Why should rich people get Social Security? When I ask people this, they reply that “We all pay into it, we should all get something out of it.” But we all pay taxes and we don’t all get food stamps, day care subsidies, Medicare or government kickbacks like some people do, do we? Why should we all get Social Security even if we all pay into it?
Any time I hear an argument for keeping Social Security, it involves helping poor elderly people, not sending checks to Robert Redford or Clint Eastwood.
So why should a rich person get Social Security? They’re rich. They don’t need it. Money is going from poor kids fresh out of college– and even teenagers working hard to buy their first car, or save up for college– straight into the bank accounts of Warren Buffett and Carl Icahn and that rich kid you knew in high school’s grandma down the road. In many cases, it’s going from a middle-class grandchild straight to their affluent grandma in Florida.
If you don’t think Social Security is in trouble, take a look at one of the Democrats’ plans for fixing it that failed in 2004-2005, because people don’t want to face up to reality:
I believed Social Security wasn’t in much trouble at all–just needed a few “tweaks”–until I looked at the tweaks the Two Peters were proposing. In addition to the benefit cuts outline above, Diamond and Orszag have the current 12.4 percent Social Security payroll tax rising to 15.4 percent in 2078 and continuing to rise “slowly over time thereafter.” Even if the Medicare tax is kept at its current 2.9 percent (a seeming impossibility) that means total FICA payroll taxes in excess of 18%. You want to try to finance universal health care on top of that? I don’t.
If Democrats want to know what a benefit cut that really zings the rich looks like, they should go to Australia, where (last time I checked) the top quarter of recipients gets no benefits at all. Zero. The bottom half gets full benefits. The people in between get in between. Now that’s a means test! Not coincidentally, after means-testing was introduced in the 1980s, Australia’s pension system cost a little more than half what ours costs, in terms of GDP.
Some people are dead-set against this idea. For instance, according to the “misguided demagogue” Saul Friedman, Max Skidmore wrote in his book, Securing America’s Future:
“Means-testing Social Security would change its nature and destroy the system. Universal coverage, regardless of need, is one of Social Security’s strong points. Millionaires do receive benefits, but they also pay into the system. Their benefits represent a smaller return on what they pay than do the benefits of lower-paid workers… Building in ‘need’ as a criterion to qualify for benefits would require the majority of Americans to contribute for a lifetime to a program from which they could draw no benefits.”
In other words, they don’t get back nearly what they paid in, but if we didn’t send checks to these millionaires, the system would be destroyed? How does that make any sense?
They’re already getting a bum deal by not getting back what they paid into the system, and they already pay far more in taxes above and beyond that for things they’ll never use– Medicare, state taxes for welfare and public transit and all those things that rich people have no need for. Is Medicare destroyed by not giving it to everyone? Is public transit destroyed because more people pay for it than use it? I don’t follow this argument.
Skidmore also wants to lift the income cutoff for paying Social Security taxes and dedicate death taxes to the Social Security fund… so he wants rich people to still get their “benefits,” but pay millions more dollars more into the system. How is that more fair to rich people than just telling them they won’t get benefits at all?
Social security pays rich people because it is a scam, and paying everyone enables the scam to be kept afloat.
If it was not a scam, it would have been designed just like food-stamps: with payouts to the poor, and coming out of general tax-funds. Instead, the intellectuals who designed it wanted people to think it was a scheme where their money would go a a fund, and they would get paid out from that fund.
Until the government talks about social security in honest terms, we’re not going to get anywhere. The SS contributions should be called income taxes, the employer’s share should be made visible, the government should stop pretending there is a fund somewhere, they should stop pretending to pay interest into this fictitious fund. Once there is honesty in terms and conversation, there may be a little more hope to figure out where to go next.
The government has no legitimate role providing retirement income and security. The system should be wound down. Still, we’ve got to bring honesty to the discussion first.
softwarenerd
October 20th, 2008
Everything you say is true.
I also believe everyone should be made to write out a monthly check paying their “bill” to the government just as they pay the cable company or any other bill. It would really hit home to them that they are giving the government so much of their wealth.
libertariangirl
October 22nd, 2008
[...] Libertarian Girl » Blog Archive » Throw Rich People Off the Social Security Rolls "Is Medicare destroyed by not giving it to everyone? Is public transit destroyed because more people pay for it than use it? I don’t follow this argument." (tags: policy politics socialsecurity class money) [...]
Being Amber Rhea » Blog Archive » links for 2008-10-25
October 25th, 2008
Frankly, I only made it through the first part of this and had to stop. This type of thinking is exactly why this country is headed downhill as we speak.
First, if given the choice, I guarantee most rich people would agree to not receive any SS ever if they did not have to pay into it. That is the only correct way your plan could take place.
You cannot force someone to pay into something because you see them as “rich and evil” and then tell them they will never see this money again. That is socialist, and simply morally wrong.
The law of unintended consequences escapes you I see. So you have established that SS is a failed system, which I agree with (although for clearly different reasons), then what do you think would happen if all the “evil rich” stopped paying into it because they will no longer be receiving anything out of it?
The system would collapse even more quickly than it already is and all those you are trying to help will be SOL.
Now, those you want to help no longer have that extra income from SS, what do you do?
I agree SS is bad, but I think it should simply be eliminated. Give everyone who payed into it their money back, stop collecting payments for it, and let it go away (along with all other socialist programs in this country).
Promote conservative (in the true definition of the word, no political affiliation) fiscal choices and promote saving and preparing for the future. Let people do this on their own through hard work, and you will have a much better society and a much better economy.
Then, uphold the 2nd ammendment for all of those who still choose to try to take from others and the problems will work themselves out. Much cheaper too than supporting a govt. program and all its related employees, buildings, etc.
Craig
March 9th, 2009
I don’t think any of these taxes should be imposed, but if they are they should at least be a transfer of wealth from the rich to the poor than from the poor to the wealthy (as SS often is).
You act as if this could never happen because rich people won’t allow this socialism. But the government certainly forces rich people to pay taxes every year that they will never receive back– income tax is only the best example, estate taxes sometimes the most devastating, the capital gains tax and others. I don’t see many people objecting to those taxes even though they obviously “discriminate” against rich people who will never get a check in the mail with that money back. Why would getting rid of Social Security for the rich be any different? The estate tax would be much more of a hard pill to swallow for an older person, and we have that going up to 55% in 2011.
I think getting rid of the system would be best in the long run, but I don’t see why the current system takes money out of my paycheck to pay to Warren Buffett and George Soros when I’m sure they’re doing fine anyway (yes, it’s true, Buffett has actually publicly stated he receives SS every month and always cashes the check).
libertariangirl
April 4th, 2009
You want to complain about not having enough money?! GET A BETTER EDUCATION! DO SOMETHING WITH YOUR LIFE!
Bob
May 18th, 2009
I never said I was complaining about myself, Bob. Perhaps I’m complaining on your behalf. As one example of how SS makes it more difficult for more people to take your advice, if young workers didn’t have to pay into Social Security they could afford an entire year of classes at a public university.
libertariangirl
June 8th, 2009
Craig wrote:
Then, uphold the 2nd ammendment for all of those who still choose to try to take from others and the problems will work themselves out. Much cheaper too than supporting a govt. program and all its related employees, buildings, etc.
***What a joke! How do you think rich people got rich? They got rich taking from others(greed). As an example, a rich man, or business owner, buys a product for a dollar (wholesale), and then turns around and sells it to the consumer for
$20.00(retail). After overhead ($5.00), the profit margin is enormous.
And we all pay to send his children to college, at the expense of our own children.
So, the rich man gets richer, “taking from others,” as you state. To my mind, this is tantamount to stealing, and an abomination in the eyes of God.
I think the wealthiest among us, who take social security checks, when they don’t need the money, or can afford to sustain themselves without it, should be ashamed of themselves.
Further, speaking on the subject of money, and profit, when is enough, enough?
Angel
September 2nd, 2009
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david baer
December 18th, 2009
WOW! I’m sure I’m not the first to point this out, but you are about as far from Libertarian is it gets. You area a common redistributionist/statist/facist. Taking money from one person with the sole intent of giving it to another is about as anti-liberty as it gets. Wise up.
Nick
April 8th, 2010
If I’m as far from libertarian as it gets, I shiver to think about how non-libertarian everyone else must be.
libertariangirl
June 30th, 2010
When you truly want a passive residual income source that functions, then you’ll need not appear anyplace else.
think and grow rich pdf
December 2nd, 2010
OK, LibGirl is right: Means Test. Now I do not propose removing SS from the wealthy, not at all. I propose reducing it. So if one makes over 60K a year after age 62 then SS is reduced by 50%. If they make over 90K then it is reduced by 75% but there it stops. After all they did put in something. Now medicare, why not again do a means test. If a person is working after age 62 and their employer offers medical insurance plans and they choose not to pay for it because they can use medicare, then I think they should be required to pay a premium at the same rate as the private insurance offered by their employer. This is to stop people who work after 62 from foregoing a company health plan and letting the taxpayer pay it. Just my take…J
joe
June 30th, 2011
This is a great discussion. I would have to say that most Americans do NOT know that rich people get social security checks. SSI stands for Social Security Insurance. Like car insurance or medical insurance – it should only be used by people who really need it. Like unemployment insurance, most people would rather not live on it, if they have options. The rich should receive it. That was just a concession by FDR to the Republicans who opposed it. Do the rich really want to see more homeless?
marte
July 22nd, 2011
Sorry, I meant to say, the rich should NOT receive it, whether they paid into it or not.
marte
July 22nd, 2011
I think means testing is a good idea. Keep in mind that the word “insurance” is part of the name of what we call “Social Security”: Old-Age, Survivors, and Disability Insurance (OASDI). Your S.S. “tax” is actually more like an insurance premium; in the case that you need it, it will be there. Not everyone who is rich today is rich in old age; that is why the rich should pay into it.
The belief that everyone who paid into Social Security should receive payment ignores the fact that it is an insurance program. Those same people paid into their car insurance policies for decades and perhaps NEVER received any of that money back — because they never needed it; they had no accidents for which they were liable. Go ask State Farm for your money back and see what they say.
Scott
July 26th, 2011
I know that this posting is late response however, I prapose to take a dollar out of every movie sale nationa wide and pau it into the SSA fund that alone will fix the problem… Also if you pay in, you should be entitled to collect your benefits. Problem is many who receieve SS payments did not pay in but for a few years of working. SS payments should be capped regardless of you income while paying into it. IT IS an old age and disability retirement fund not insurance by the way.
Bobbi
July 27th, 2011
I agree that the Social Security system is broken, for several reasons. The most important being: 1) it is a government operated Ponzi scheme. Borrow money from one person to pay off what you borrowed from the last person. 2) the SS system has averaged a 1% a year “interest” since it was created. That’s less than inflation. Even the stock market with all of it’s ups and downs has averaged about 9% interest. 3) forcing businesses to also contribute towards your retirement takes more money out of their pockets, that could very well be used to create more jobs. But, be that as it may, you cannot simply END Social Security. What about the 58 year old guy who has relied on the system for his retirement (foolish, but all too common)? If you just end the system, he will have no way to take care of himself. I’m all for replacing Social Security with a private option. But it must be phased out. People who are under, say, 35 years old, will not be in the old system. Instead they should pay the same percentage of their income into whatever no-tax-ever retirement account they choose. And people over 35 can opt either way, old system or new system. But the cost of Social Security to keep paying everybody else that stays on the system for however long until they all die will not change. It will still be too expensive. So, I agree that the richer of retired people should be ineligible for their benefits. They have no need of it, and it is the only reasonable way to phase out the system without anybody being a true victim. And for the person who will say that forcing you into another retirement system is not the governments right, and we should all fend for ourselves, I’ll say ahead of time, that this thinking is just as extreme and idealistic as the opposite extreme. The simple fact is a great majority of people would not save for their own retirement if they are not made to. A great many people will starve if left up to true Libertarian extremism. Realism, as opposed to idealism, is a much better path to travel.
David
August 8th, 2011
Look the rich got rich in this country, because this country allowed them to. So either tax them much higher or take SS from them. do they need it no. do they want it of course. to bad you got rich because this country gave you the opportunity, so it should be means tested My mom gets 800 bucks a month is that right?yes I understand that # is based on what you gave to SS but she became disabled and is now getting my deceased fathers SS. it doesn’t really mater the government doesn’t care what we think or how we vote it is a broken system and they make the rules pick the king and tell us what we will do and not do!!
David Martin
September 9th, 2011
It is my understanding that congress has systematicaly depleted Social Security, especially President Johnson. Congress has “borrowed” and never paid back money taken. How much more solvent would the program be if it were not used as a petty cash box? The trouble even with Social Security disability is that you have to be under the national poverty level to receive it, one dollar over and you don’t qualify. So and elderly disabled person or a person with an incurable disease unless they are fortunate enough to live with friends or charitable relatives will live in flea bag rooms with no cooking facilities, shared bathrooms, and usually cut off from society in general. AS Jesus said, the poor will always be with you, means that we have to take care of those who can’t take care of themselves, even Eleanor Roosevelt said that we should help those less fortunate than we, of course she was speaking to people more fortunate than we. I’m not talkig about the drug addicts, the alcoholics who put themselves on the street.
I’m talking about your grandmothers, your parents, your disabled sister or brother, your best friend. The Tea Party has no compassion for the sick and truly needy, these are bible slapping, gospel quoting, out of context scriptures, to support their inhumane ideals. The Tea Party wants to sink this country back to the 17th century, They want to eliminate all social programs, just think of all the billions they can funnel into their sponsors pockets, or their own. There is still a lot of money out here that they are thinking of ways to take from us. Who ever said that God helps those who help themselves had a coin with two tails, A Tea Party controlled house, and senate will certainly help themselves. The Vanderbilts are in charge of the food stamp oprogram, somehow, they get a kick back every time a food stamp card is swiped through a card machine.
Tim H. Royal
September 26th, 2011
As long as people pay into it, they should receive some benefits. However, I do believe in needs testing so that people who worked their whole lives don’t have to live in hovels and eat cat food.
If we lifted the cap on payments, it would help resolve the revenue side of SS. http://thinkprogress.org/economy/2011/08/25/304387/bernie-sanders-introduces-bill-to-lift-the-payroll-tax-cap-ensuring-full-social-security-funding-for-nearly-75-years/
However, unless we fundamentally change our economic structures and help create jobs, no amount of tweaking the system will help.
Interesting post L-Girl.
Yours,
Tex Shelters, the Social Democrat Guy
Tex Shelters
October 30th, 2011