Actually, the benefit is the same, but the government won't get the taxes back which help pay the benefits. Low income people may not be taxed on or taxed on only half of it. The biggest benefits are paid to high earners, who would end up with the biggest tax break.
Won't that discourage investment in stocks and have the effect of slowing economic growth? Also, since what appears to be profit, is partially the result of inflation, is it really fair to tax the same as regular income?
They tax profit from a property sale and the increase there is often just inflation.
Yes it might discourage investment. People can still evaluate that when making their choices about what to invest in. People who want to tax the rich should have no problem with taxing stock income as regular income. It would affect the rich more who have their income in stocks in their businesses rather than a payroll check. Now maybe there should be income brackets before it is taxed that way.
But a person on SS with a spouse that makes under $100k should not be taxed on their SS. (By the way, Biden voted for this twice)
Yes, both sides want this. My own thought is that we need to raise the cap so high earners contribute more. Right now, the way benefits are taxed, those seniors who earned low wages, paid less in and thus get lower benefits, already are mostly exempt from taxes on it. So, the removal of taxes on benefits will give a bigger break to higher earners. And it amounts to one more tax break for the wealthy, who already paid a much smaller percentage of their income into it.
True. But there are some who get hit with taxes because their spouse is still working and so it causes the SS to be taxed.
I would even be fine with earners who meet the high income limit not be allowed to draw SS at all. Honesty, people like Trump should not be on SS. People like John Kerry should not be drawing on SS. Or Musk, Bezos, Bloomberg etc. Generally, people who make more than the limit have other sources of income and would be fine without drawing SS.
I agree they don't need it, but they paid into it, so it wouldn't be fair to withhold it. Social Security is basically a Ponzi scheme, so we need everyone to pay into it, or it won't work.
You could argue that government itself is a Ponzi scheme from that viewpoint - including the military, police, firefighting etc. If those who can afford to pay taxes don't, the funding for basic services dries up and the whole system collapses into anarchy.
Not sure that I get your point. With Social Security, each generation pays for the generation ahead of it. We need to keep money coming in, or the people who paid in, won't get their benefit. The system was set up when life expectancy was lower, so it worked great. Now, rather than a few years of benefits, we get decades.
My goodness, I've wandered into the Twilight Zone - I find myself agreeing with m2c on a political issue! Personally I believe SS should be means tested (as it is in Australia) and not paid to households whose total income and assets (not including the principal place of residence) are above a certain limit. Then don't tax it when paid to those who absolutely require it to live on, and you don't tax it for higher earners because it's not paid in the first place.
I wouldn't go quite that far. That puts Trump beyond it too. He doesn't pay tax anyway, but he shouldn't have yet another loophole. More than a few seniors have investment portfolios that pay dividends in the millions. A tax free threshold of $15k or thereabouts regardless of age, and incremental above that. Brackets should also be pinned to CPI to eliminate bracket creep - if you get a raise that is equal to or less than inflation, you shouldn't be penalised by being pushed into a higher bracket.
Art Lover 