U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 04-11-2015, 08:55 PM
 
30,107 posts, read 47,335,107 times
Reputation: 16044

Advertisements

This link is to article by Scott Burns who for long time was investment advisor at Dallas Morning News, then had his column syndicated into national papers, then retired...he also helped found a wealth advisory company called Asset Builder which operates in Plano, TX although Mr. Burns lives outside Austin so his contribution is mostly writing for his blog on that site (which is still syndicated) and giving advice to the people who actually deal with the clients...He has also written several books, some w/Lawrence Kotlikoff who is pretty well know economist...

Burns writes about the increasing burden of having SS benefits taxed by the middle class senior citizens and how the tax burden will grow into the future so that almost every no matter what their earned income will pay a heavy burden on SS...

AssetBuilder - It

I know many people are skeptical that SS will be around in 20-30 years anyway so why worry about it--
but the points he makes are pretty valid in that freeing up the money that would otherwise go for taxes could be a springboard to energize some aspects of the economy and improve lives of middle class and poorer retired Americans...
Maybe some of you have arranged your investments to where you don't have much taxable income--
but that comes because you have income to invest and the opportunity and education to know what to do...
some people don't have those options...
Reply With Quote Quick reply to this message

 
Old 04-11-2015, 10:46 PM
 
Location: Sacramento
13,784 posts, read 23,809,056 times
Reputation: 6195
Doing some folks tax returns for them I've noticed the issue Burns brings up here, that getting above a certain level of moderate income results in a rather steep climb as more of Social Security become subject to income tax.

So I can see where he is coming from here, though I pretty much disagree with his suggested fix. Rather, I just think that something like 70% of all Social Security income should be subject to income tax, regardless of overall income. Though he'd disagree, this also would address the issue he brings up in his article.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 04:14 AM
 
71,584 posts, read 71,730,589 times
Reputation: 49184
i have written many posts about what happens when you just marginally take in a bit more money over the thresholds. it is insane.

you can get an extra 1k in taxable income and see 50% of it gone between the tax on the income and the increased tax on ss.

if anyone wants to see the math i will post it but i would think most saw it already as i posted it a few times.

despite the fact folks think that getting your ss taxed is not a low income problem it is a huge problem for those just over these low thresholds.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 09:06 AM
 
30,107 posts, read 47,335,107 times
Reputation: 16044
Taxing 70% of SS income no matter the income levels would just penalize too many poorer people--and would NOT accomplish what Burn's revision would hold to do...
I think we are close to that target now and people are feeling the onus of the original decision which omitted any kind of inflation nod to taxing SS benefits...

I think everyone agrees that the working poor and "middle class" are growing in numbers while the top 1% or even .5% are growing in wealth...
those people can usually configure their assets to minimized taxes and maybe even receive all their SS w/minimal taxing...
no matter how the rules are configured because they can afford to hire good tax attorneys, sculpt their assets to capture tax-advantaged investments, have cash to sustain them whereas people from moderate income (and no pensions) are left to shoulder the tax burden of supporting the government....
they are just handicapped in their ability to design an income/asset plan because most of their money is going to pay current expense or going into 401K plans...
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 09:49 AM
 
39,260 posts, read 20,360,961 times
Reputation: 12751
Quote:
Originally Posted by mathjak107 View Post
i have written many posts about what happens when you just marginally take in a bit more money over the thresholds. it is insane.

you can get an extra 1k in taxable income and see 50% of it gone between the tax on the income and the increased tax on ss.

if anyone wants to see the math i will post it but i would think most saw it already as i posted it a few times.

despite the fact folks think that getting your ss taxed is not a low income problem it is a huge problem for those just over these low thresholds.
mathjak, would you post the calculation please.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 09:52 AM
 
Location: Houston, TX
14,699 posts, read 8,487,248 times
Reputation: 29399
I don't understand why SS benefits are taxable now. If I remember correctly, they were not subject to taxation in the past. Taxing SS benefits, when recipients have worked and paid taxes to earn the benefits year after year, amounts to double taxation.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 10:00 AM
 
Location: Los Angeles area
14,018 posts, read 17,737,509 times
Reputation: 32304
Quote:
Originally Posted by Scooby Snacks View Post
I don't understand why SS benefits are taxable now. If I remember correctly, they were not subject to taxation in the past. Taxing SS benefits, when recipients have worked and paid taxes to earn the benefits year after year, amounts to double taxation.
They have been taxable since 1984. What may be confusing you is they are not taxable for everybody. People whose only income is Social Security, or whose income consists of mostly Social Security, don't get taxed.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 12:21 PM
 
30,107 posts, read 47,335,107 times
Reputation: 16044
but because of how the tax laws are designed, in the future, almost anyone who receives SS WILL pay tax on what they get no matter if that is their only income...
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 12:30 PM
 
Location: Sacramento
13,784 posts, read 23,809,056 times
Reputation: 6195
Quote:
Originally Posted by Scooby Snacks View Post
I don't understand why SS benefits are taxable now. If I remember correctly, they were not subject to taxation in the past. Taxing SS benefits, when recipients have worked and paid taxes to earn the benefits year after year, amounts to double taxation.
Not really, only up to the amount you've contributed yet paid taxes on would amount to double taxation. Based on life spans today, often folks receive Social Security benefits far in excess of what they have contributed when working and having the money deducted from their paychecks.
Reply With Quote Quick reply to this message
 
Old 04-12-2015, 12:32 PM
 
Location: Sacramento
13,784 posts, read 23,809,056 times
Reputation: 6195
Quote:
Originally Posted by loves2read View Post
Taxing 70% of SS income no matter the income levels would just penalize too many poorer people--and would NOT accomplish what Burn's revision would hold to do...
I think we are close to that target now and people are feeling the onus of the original decision which omitted any kind of inflation nod to taxing SS benefits...

I think everyone agrees that the working poor and "middle class" are growing in numbers while the top 1% or even .5% are growing in wealth...
those people can usually configure their assets to minimized taxes and maybe even receive all their SS w/minimal taxing...
no matter how the rules are configured because they can afford to hire good tax attorneys, sculpt their assets to capture tax-advantaged investments, have cash to sustain them whereas people from moderate income (and no pensions) are left to shoulder the tax burden of supporting the government....
they are just handicapped in their ability to design an income/asset plan because most of their money is going to pay current expense or going into 401K plans...
At the 70% level, the poorer folks would still have very modest tax bills, and this would also address your issue of wealthy folks escaping the tax via "creative" measures.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top