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Okay....I'll wade in here and be prepared for my head to be bitten off. There is income inequality in all age groups from children to old age. It is not society's job to make everyone's income equal. For the helpless (children, disabled, very aged) there are already programs in place (AFDC, Disability, SS and SSI, Medicare) to assist. I realize that they provide a pretty meager living, but they will keep you dry and fed with the help of some local charities, albeit not a life of luxury or anything one would ASPIRE to. For the able-bodied in the middle between childhood and old age, there is what most people do...work.
As far as change, I believe that the upper limit for SS withholding should be removed. I think we all, including the super rich, should pay the same percentage of our income into the pool during our working years. This alone would probably save SS for many years. I believe that minimum wage should be raised to at least $10 initially, and then adjusted every year or two in accordance with the COL index. I would also like to see the federal income tax converted to a simple flat tax for everyone, except those who are already living on government funds (it seems counterproductive to tax SS or welfare, right?). I think an approximate 10% flat tax with personal exemptions as the only deductions might do the trick. It seems that the richer folks with more financial savvy and ability to make their money work for them, are the ones who get the most tax relief and advice in sheltering their assets. Doesn't really seem fair. Lastly, I also believe that financial basics such as banking, budgeting, the power of compounding interest, and the dangers of debt should be mandatory in high school. In our school district no one got out of high school until they passed a swimming survival course in PE, no one should get out without passing a money survival course in my world.
I agree with all of these excellent points with the exception of the 10% flat tax. First I don't think that would be sufficient and would have to be calculated and probably change from time to time. But I also see the merit in having some deductions that will better society as a whole (but nothing resembling tax avoidance)
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Originally Posted by BellaDL
Agree 100% and would like to see free financial education offered to low income and senior citizens. There are a lot of brain power and financial experience in the retired boomer group, I'd like to see some non-profit organizations setup to have retirees volunteer to teach others, and the government gives tax credit for the volunteer time.
I TOTALLY agree but would like to see classes in high school on basic finance. In fact I think it should be taught at higher and higher levels = Daily living & Finance 101, Daily Living & Finance 102 and Daily Living & finance 103. (You want to really make it sink in)
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Originally Posted by VJDAY81445
removing the cap on SS tax?
Up until now, the more you paid into SS the higher your benefits. If we remove the cap on SS tax , will there be no cap on the size of SS checks?
Removing the tax cap but not having the amount paid in have a correlation to amount received is a major change in the SS system .
Yes, this point is often overlooked. As we all know social security is underfunded, we must make some adjustments that add up mathematically. I do not feel it would be fair to keep the current cap in place but continue to tax the higher wages without further benefit. But perhaps those increases in benefits would be at a much lesser level once you pass certain marks. As the idea in doing this is to make up the short fall in social security which is largely due to our longer life expectancy. It is either this or withholding a greater percentage for social security from each pay check. Something I would be open to, because without forced savings, many people will wind up in the poor house when they get old.
Something else I would like to see as I think it might be a win win situation for everybody. I'd like to see a government program for younger able bodied seniors to be able to help other seniors in need. Whereby, a senior who could use extra money themselves to supplement their social security, can take a class sponsored by the government on elder care, and spend five or six hours a day helping another senior in need of cooking, doing laundry, house stuff and shopping, bathing and meds, etc.
If a physician or social worker can verify an elder person can no longer perform these things themselves but they don't want to go into a nursing home, it would seem much more cost effective for the government to delay that inevitability as long as possible and certainly be less costly.($1,000 to $1,600 vs $5,500+ mo for nursing home)
If they owned their own home (which was paid for of course) that could be sold after death. Or if later admitted into a nursing home (whichever comes first), the government could be repaid for some if not all of the debt through the sale of the home. To me this would get three birds at the same time. Help an aging person remain in their own home as long as possible, save gov. money by keeping elder out of nursing home either entirely or as long as possible, and help a second senior by providing a means of earning additional money to help supplement their own income.
I know there are some programs like this for people on disability and others (Seniors helping seniors), but the latter is not free and not affordable for seniors with low incomes. And as that is the subject at hand, as to what can be done to aide in the inequality gap, this is something that I think could be done.
Last edited by modhatter; 03-25-2015 at 04:14 PM..
Outstanding and kudo's to all. Very intellectual thoughts and discussion so far. Shadow still has his head fully intact!
I wonder about this idea for removing the cap on earnings for social security:
1. Raise the cap;
2. Raise benefits for those contributing additional amounts. Not to a point that is commensurate with the additional tax, but enough so that they can draw some additional amount of social security. Perhaps, the upper cap on benefits could be raised so that someone could get as high a monthly stipend as $6,000.00 or $7,000.00 dollars
I wonder about this idea for removing the cap on earnings for social security:
1. Raise the cap;
2. Raise benefits for those contributing additional amounts. Not to a point that is commensurate with the additional tax, but enough so that they can draw some additional amount of social security. Perhaps, the upper cap on benefits could be raised so that someone could get as high a monthly stipend as $6,000.00 or $7,000.00 dollars
While because of age and being retired I would not be impacted. However if not retired I would have been impacted and supported your idea fully. Being maxed out you already know that folks at the lower end are getting a better deal so this is just impacting the degree of.
Something else I would like to see as I think it might be a win win situation for everybody. I'd like to see a government program for younger able bodied seniors to be able to help other seniors in need. Whereby, a senior who could use extra money themselves to supplement their social security, can take a class sponsored by the government on elder care, and spend five or six hours a day helping another senior in need of cooking, doing laundry, house stuff and shopping, bathing and meds, etc.
modhatter,
It's uncanny that you and I think alike on many issues ;-) I was just about to post the same idea and you beat me to it. Too bad that I can't rep you today.
Lacking a government program, I think some 'community activists' (flame suit on!) could organize something similar. There are wealthy seniors who could not take care of themselves or perform some daily chores and have to pay big bucks for private home care/services. The more able bodied seniors who need extra cash can perform some tasks/duties at a much lower cost. This is a win-win situation for both sides.
One can also form some sort of a co-op senior service to share tasks thus reducing living cost and forming social bonds, making friends at the same time. I'd love to belong to such a co-op when relocating to a new place. The co-op members can also be teachers teaching others new skills (be it needlepoint, carpentry, investing, internet, computer, writing, painting etc), serving as gym/hiking partners, mentors or whatever.
I would agree with raising the SS tax cap, I would pay more but it seems right. Would probably cap what you would receive (as someone brought up)
I agree with a flat tax with some entry point up to which is untaxed at the low end. I generally agree with less government and ecpesially much less IRS.
It's uncanny that you and I think alike on many issues ;-) I was just about to post the same idea and you beat me to it. Too bad that I can't rep you today.
Lacking a government program, I think some 'community activists' (flame suit on!) could organize something similar. There are wealthy seniors who could not take care of themselves or perform some daily chores and have to pay big bucks for private home care/services. The more able bodied seniors who need extra cash can perform some tasks/duties at a much lower cost. This is a win-win situation for both sides.
One can also form some sort of a co-op senior service to share tasks thus reducing living cost and forming social bonds, making friends at the same time. I'd love to belong to such a co-op when relocating to a new place. The co-op members can also be teachers teaching others new skills (be it needlepoint, carpentry, investing, internet, computer, writing, painting etc), serving as gym/hiking partners, mentors or whatever.
This led me to another thought of having some frequent posters/readers gathering all the great nuggets of information scattered in many posts/threads and compile them into sticky posts for common topics/main interests & in charge of updating maintaining these stickies as new information come in. Maybe this is something I can do when I retire ;-)
Social Security is a redistributive scheme as it is. It takes income from the working (presumably younger) and redistributes this income to those who primarily aren't working (the elderly). As I'm sure the vast majority of people on this forum know, but that many in the general public don't, is that there is no "piggy bank" with your funds in it just for you, and SS is not "investing for you on your own behalf." Younger people like myself are essentially getting nothing more than an implicit IOU for our retirement as long we've contributed our fair share prior to retirement. SS provides a meager living for the elderly but deducts from my current lifestyle and investing patterns.
I wouldn't mind if the SS upper limit was removed - after all, why should anyone be taxed at a lower effective overall rate just because they earn more? Lots of people want to raise the FICA contribution person, but that only enforces the redistributive effect on the people who do not go over the threshold further, so I'm opposed to it.
But that is the same IOU us folks that are now drawing got.
Right off the bat, a disclosure. Circa ten years ago I was a rabid, free market, hard core libertarian, economic Darwinian. And to boot, I am actually (knock on wood) on track to have a better than average albeit by no means super comfy, retirement. That having been said ...
The events of recent years have made me question some of the more ideological doctrines I developed during younger years. I have moved from the libertarian camp to a camp that has a bit of Wm. McKinley, a bit of JFK and a bit of H. Ross Perot. I believe that the government has failed to secure the borders both literally and figuratively, and has drank the globalist Kool-Aid, resulting in horrible consequences for many hard working mid income Americans.
Regarding the problem at hand, it is a two part problem.
Seniors of today who are having issues due to income (and asset) inequality are the result of a mixture of things. Some of those things (affecting a subset) are personal in nature and some (affecting another subset) are macro or external in nature. For Silent Gen seniors, BTW, the richest seniors, overall, in US history, personal probably played the greatest role. So for them, I tend to agree with some of the other posters here, namely, the safety net exists. Don't slather them with luxury, because in most cases, poor choices played a big role. Increasingly, however, as the senior community starts to include more and more Boomers, those in distress are increasingly the result of the macro. The thing about Boom is, Boom started out with really great opportunities and earnings. 1940s cohorts had it nearly as good as the Silents. 1950s, not so much. By the end of Boom, most individuals were having a de facto Gen X experience. I won't debate that boundary other than to say I go with Strauss and Howe.
Which brings me to part two of the problem, tomorrow's seniors. Here we will see the bitter harvest of the border busting, economically Darwinist, corporatist mentality that has dominated public policy for at least the past 20 years. The middle class are shell shocked, and no matter how hard some people have worked, there is no way they will ever match their own parents in earnings or economic health, when they approach retirement. Macro is the dominant issue here.
In that case, a more activist government will be needed. That government needs to not only figure out how to fund aid for the future severe elder poverty, they also need to step in and arrest the decline of the state. Borders need to be reestablished and the national interest needs to once again become paramount. I have a feeling some of this will occur organically, as I suspect the world order established during the mid 40s has now crumbled beyond repair. The UN will dissolve, Great War will visit the Earth, and the chimera of endless globalization and prosperity will vaporize like a nuclear warhead detonating.
Welfare programs such as food stamps etc are available to them as well as Medicare at no cost and a lot of local federally at least partially funded programs.
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