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hiricinee t1_jc2tj02 wrote

Reply to comment by ktxhopem3276 in [OC] US Social Security Fund History by PM_Ur_Illiac_Furrows

I'm actually excited to break the payroll tax cap by a few k this year!

On that note, the point of the cap is to say "hey you've put enough into ss to save for retirement, keep the rest." Imo I'd rather they means tested the benefits than increase the cap.

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ktxhopem3276 t1_jc2v2zj wrote

Wealthier people live longer and draw social security longer. The percent of gdp over the cap has increased since the 1980s even with the yearly increase in the cap. It’s also why there is a big jump from 24% to 32% in income taxes at $183,000 but that could be up to $200,000 using 401k deduction. The way I look at it is once you make that much money, you are probably lucky that whatever career path you picked is in demand. Democrats generally say they would create a donut hole by applying the tax on income over $250,000

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hiricinee t1_jc2w8g3 wrote

Right now the cap on the payroll tax is at around 150, very much to the point if wealthy people are living longer than means testing the benefits would reduce payments to them more. Of course the problem with that is that there's a lot less rich people than poor ones.

Also almost all of these ideas go against the principle of ss, which was to be a government sponsored retirement program you paid into and got out once you retired. Basically all of the ideas to fix it completely neglect that (out of necessity.)

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ktxhopem3276 t1_jc2x1pm wrote

Means testing is tricky because people will spend down savings faster to avoid it. The scary thing about means testing is it’s a slippery slope. We already have means testing sort of. When they added taxes on ss benefits in the 80s it was never inflation indexed. so now most people have to pay income tax on their benefits. Raising the cap brings in a lot more money than means testing according to the ssa analysis. Another possibility is to fix ss by shifting the medicare payroll tax to the ss trust fund so that ss is still a pay in to get benefits design. Medicare is only half funded by payroll taxes anyway and is mostly paid for by the general fund.

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thunder-thumbs t1_jc31zod wrote

If you remove the cap and remove the max payment, then that principle is retained, though, isn’t it?

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TracyMorganFreeman t1_jc48c0f wrote

How convenient that Congress makes 170 to 230K a year.

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MainStreetRoad t1_jc4wjrm wrote

That’s a façade, congress makes MOST of their income via bribes.

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TracyMorganFreeman t1_jc4x2rm wrote

You seem to be confusing campaign funding with income.

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ktxhopem3276 t1_jc4y0oo wrote

If the campaign funds improve their chances of winning election,they personally benefit

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TracyMorganFreeman t1_jc4yzhd wrote

The fact you don't pay payroll taxes on something that isn't payroll is the point.

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ktxhopem3276 t1_jc4zvsa wrote

Obviously it was a joke. But not all bribes are in the form of campaign funds. Other bribes are the paid speeches and future employment offers

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TracyMorganFreeman t1_jc50ty2 wrote

Which you till pay taxes on.

This, combined with the numerous bureaucrats and tech professionals who are their donors is why that donut hole was selected.

Ultimately it's telling they don't just try to lift the cap entirely.

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ktxhopem3276 t1_jc51ag9 wrote

tech professionals that make more than $160,000 or less than $250,000 are big campaign donors?

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Double_Secret_ t1_jc3sg3c wrote

Can’t imagine the “means testing” will be low enough to off set the increase they’d get from lifting the cap, since no one feels like “oh, hey, that benefit I’ve paid into for years? Yeah, don’t care, I’ve got enough” unless they’re really rich.

I know plenty of people who could live without the benefit, but they’re going to be enraged if their benefits get cut.

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TracyMorganFreeman t1_jc486uk wrote

They do means test it. The rate of "return" is higher the lower your AIME.

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ktxhopem3276 t1_jc4z44a wrote

Depends on life expectancy gender and spousal benefit

>The result in this study implies that the differential mortality between low earners and high earners reduce the progressivity of Social Security. Estimates show that, under current Social Security, the IRR (i.e., the rate of return of lifetime payroll taxes) for the 1930 cohort in the bottom income quintile is 1.67% compared with 2.28% for those in the top income quintile. This difference in IRR is widened for the 1960 cohort due to larger mortality differences—0.6% for the bottom income quintile compared with 2.46% for the top income quintile.

https://crsreports.congress.gov/product/pdf/R/R44846

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TracyMorganFreeman t1_jc4zhq8 wrote

Hmm, maybe forcing people to pay into a system they might not survive to benefit from was a bad idea.

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ktxhopem3276 t1_jc502dh wrote

Earned income tax credit offsets that issue. Or are you making an argument to replace the flat payroll tax with a progressive tax ?

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TracyMorganFreeman t1_jc525na wrote

I'm suggesting a system that is effectively a ponzi scheme probably isn't the most sustainable.

Then again other countries have higher retirement ages and much hire contribution rates for pensions(as in the 20+%, with Italy being at 33%), so maybe the problem is the US trying to get something from far less than other more sustainable systems.

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ktxhopem3276 t1_jc53qnk wrote

Ponzi scheme implies hidden accounting. It’s transparent from the start that the first generation received a gift

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TracyMorganFreeman t1_jc5arl1 wrote

No it doesn't. It implies that no real investment is made, and the returns to old investors are just the injection from new "investors"

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ktxhopem3276 t1_jc5cwds wrote

Ponzi scheme is intentionally deceptive and illegal fraud. Social security is intentionally transparent about earlier generations getting a gift. Your making a false analogy.

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TracyMorganFreeman t1_jc5elkn wrote

No need to be deceptive when you're forcing people to contribute, and the degree of contribution can be manipulated well after "investors" have committed to a particular contribution.

All you have to do is say it's for their own good.

The analogy is the way it's structured. Along that dimension of comparison it's perfectly apt.

Economic bubbles are a form of ponzi schemes too in the way they are structured.

Social security is a ponzi scheme in all the important ways that it make it so. They are unsustainable because they don't actually produce anything.

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ktxhopem3276 t1_jc5g0af wrote

Forced participation or variations in benefits due to life expectancy isn’t deceptive. It’s a trade off made by society to give a gift to earlier generations. Calling it a Ponzi scheme is a rhetorical ploy to disparage something you don’t like for other reasons because you think people will believe your false analogy more than they will your real issue which is forced participation

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TracyMorganFreeman t1_jc5jsil wrote

No, it's a ponzi scheme. Calling it a tradeoff by society doesn't preclude it from being a ponzi scheme.

If it took your money and actually invested it in something, then I wouldn't call it a ponzi scheme.

I take issue with forced participation, but that doesn't mean all forced participations are ponzi schemes.

Think of it this way: if it's not a ponzi scheme, then you wouldn't need to increase the rate or the cap to keep it solvent.

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ktxhopem3276 t1_jc5kxbq wrote

> No, it's a ponzi scheme. Calling it a tradeoff by society doesn't preclude it from being a ponzi scheme.

But everybody knows why it made the trade off and it wasn’t intentionally deceptive

> If it took your money and actually invested it in something, then I wouldn't call it a ponzi scheme.

Is the intention of social security to invest money? Is it being intentionally deceptive paying out benefits from tax revenue?

> I take issue with forced participation, but that doesn't mean all forced participations are ponzi schemes.

Obviously. Ponzi schemes are fraudulent. Social security isn’t fraudulent

> Think of it this way: if it's not a ponzi scheme, then you wouldn't need to increase the rate or the cap to keep it solvent.

That’s not fraudulent.

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TracyMorganFreeman t1_jc5r5pa wrote

>But everybody knows why it made the trade off and it wasn’t intentionally deceptive

No, it was sold as individual workers contributing to their retirement later on, which isn't how it works.

>Is the intention of social security to invest money? Is it being intentionally deceptive paying out benefits from tax revenue?

It's *not a progressive redistribution program either*.

>Obviously. Ponzi schemes are fraudulent. Social security isn’t fraudulent

That's a legal distinction, not a structural one.

>That’s not fraudulent.

Yeah it's just a ponzi scheme in all but name.

Do you not see how you are fixated on the part that isn't required of a ponzi scheme, and ignoring the very argument being made that it is structured by one? You are wishing to maintain a rhetorical air about it, and avoid the actual argument.

Economic bubbles aren't fraudulent either, but they're *also ponzi schemes*

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ktxhopem3276 t1_jc6h5f2 wrote

> No, it was sold as individual workers contributing to their retirement later on, which isn't how it works.

I think it was obvious from the start the first generation of beneficiaries were gifted into the program

> It's not a progressive redistribution program either.

Not sure what you are getting at

>That's a legal distinction, not a structural one.

True but still a significant distinction rooted in transparency versus deception

> Yeah it's just a ponzi scheme in all but name.

That’s just lazy or dishonest

> Do you not see how you are fixated on the part that isn't required of a ponzi scheme, and ignoring the very argument being made that it is structured by one? You are wishing to maintain a rhetorical air about it, and avoid the actual argument.

You are wishing to portray a negative connotation with an unlawful deception to a transparent program with structural debt due to life expectancy and birth rates and immigration rates

> Economic bubbles aren't fraudulent either, but they're also ponzi schemes

They have similarities but that’s also a false analogy.

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TracyMorganFreeman t1_jc6ns5k wrote

Analogies allow for differences.

Ponzi schemes are just as unsustainable even when transparent. It's just harder to get people to buy in.

Unless you force them to.

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ktxhopem3276 t1_jc6ufka wrote

Depends on whether the differences are material to the conclusion. Drawing any inference from an analogy that cherry picks the similarities to infer a conclusion is a fallacy. I might entertain the analogy multilevel marketing is to pyramid scheme as social security is to ponzi scheme or Ponzi schemes are analogous to pyramid schemes because they are both fraudulent. But whether something is fraudulent hasn’t been proved, it’s a material difference that allows the analogy to be persuasively deceiving. I think you need to make the that argument forced participation or redistribution or insolvency is deceptive in order to support the analogy as a honest logical argument rather than a persuasion

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TracyMorganFreeman t1_jc792om wrote

Which fallacy would that be?

It's not a material difference, because the problematic element I'm referring to is unsustainability, not whether it's fraudulent or not.

It's like saying "well the police unjustifiably killing someone isnt murder because they have qualified immunity and murder means an unlawful killing", completely ignoring what informs what the definition of murder is.

It's just sophistry.

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ktxhopem3276 t1_jc7c9pf wrote

> Which fallacy would that be?

False analogy

> It's not a material difference, because the problematic element I'm referring to is unsustainability, not whether it's fraudulent or not.

Thats a reasonable argument on its own but that’s cherry picking one aspect and using the analogy to be lazy or worse persuasive. That’s assuming it was promised the tax or age would never change. It was designed from the beginning to benefit earlier generations. I think the forced participation argument is a better leg to stand on than sustainability for the analogy due to the debatable justification of government confiscation

> It's like saying "well the police unjustifiably killing someone isnt murder because they have qualified immunity and murder means an unlawful killing", completely ignoring what informs what the definition of murder is.

Qualified immunity is civil liability. But regarding the point of the analogy, I’m not asserting that something being legal or illegal is the only consideration. I’m more simply asserting using an analogy with something that is illegal is lazy or dishonest. Generally I find analogies lazy and more often dishonest on purpose. Especially in the area of law they are very tricky and mainly used when the law is unclear

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TracyMorganFreeman t1_jc7dxxx wrote

Except it isn't a false analogy simply because it doesn't have all the qualities of a Ponzi scheme.

Thinking analogies are lazy is misunderstanding their purpose. Analogies are the very means of illustrating a concept by means of comparison.

Ponzi schemes are inherently unsustainable, but they're not inherently forced.

I can have objectives to it on forced participation grounds too, but I wouldn't call it a ponzi scheme to do so.

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ktxhopem3276 t1_jc7h8pn wrote

> Except it isn't a false analogy simply because it doesn't have all the qualities of a Ponzi scheme.

I agree

> Thinking analogies are lazy is misunderstanding their purpose. Analogies are the very means of illustrating a concept by means of comparison.

I find them lazy when used in debate bc they are usually used to over simplify differences .

> Ponzi schemes are inherently unsustainable, but they're not inherently forced.

I think whether social security is sustainable or not is the question that has to be agreed upon or else we are at an impass.

> I can have objectives to it on forced participation grounds too, but I wouldn't call it a ponzi scheme to do so.

I agree but that wasn’t my point. My point was if social security has questionable legality, it is less misleading to use an analogy to other illegal topics even if the reason they should be illegal is different

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TracyMorganFreeman t1_jc7i5b1 wrote

People arguing the police murder innocent civilians all the time. They are using the word murder by analogy.

The same goes for theft when tax dollars aren't used for what people want them to.

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ktxhopem3276 t1_jc7jmiq wrote

Because they want to persuade people to believe the actions are illegal. So my question is are you making the argument that social security is illegal bc it is unsustainable? Because it is strongly implied by asserting the analogy to Ponzi scheme just like murder and theft

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TracyMorganFreeman t1_jc7kcnp wrote

No they want to persuade people it's immoral because murder is.

I'm making the argument that SS is inherently flawed for the same reason Ponzi schemes are: they're structured in an unsustainable way.

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ktxhopem3276 t1_jc7l92c wrote

That’s fair but ambiguous to me. how am I supposed to know if they are inferring immoral or illegal. But it begs the question, is it unsustainable by design. It was designed from the beginning for the tax rate to slowly increase over time as needed based on life expectancy and birth rates. The initial tax rate was only 1%. Birth rates were declining in the 1930s.

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TracyMorganFreeman t1_jc7ms2k wrote

They're saying it's murder by analogy.

Murder is the immoral killing of someone, and are implying it should be illegal.

It was not designed for the tax rate to slowly increase over time.

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ktxhopem3276 t1_jc7pp3d wrote

> They're saying it's murder by analogy. Murder is the immoral killing of someone, and are implying it should be illegal.

I find that deceptive because not all killing of innocent people is murder. Depends on intent.

> It was not designed for the tax rate to slowly increase over time.

That could be inferred from its design. Tax rate has changed 20 times already to account for life expectancy and birth rate.

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TracyMorganFreeman t1_jc7wxye wrote

No, all killing of innocent people is murder.

There are degrees of murder, but involuntary manslaughter is both illegal and immoral.

To say it's inferred by design is to say it's designed to be flawed.

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ktxhopem3276 t1_jc8112u wrote

> No, all killing of innocent people is murder.

Imprecise and ambiguous use of words

>There are degrees of murder, but involuntary manslaughter is both illegal and immoral.

Is manslaughter murder? It might depend on context.

> Homicide occurs when a person kills another person.[1] A homicide requires only a volitional act or omission that causes the death of another, and thus a homicide may result from accidental, reckless, or negligent acts even if there is no intent to cause harm

> Murder is the unlawful killing of another human without justification or valid excuse, especially the unlawful killing of another human with malice aforethought

> Manslaughter is a common law legal term for homicide considered by law as less culpable than murder. The distinction between murder and manslaughter is sometimes said to have first been made by the ancient Athenian lawmaker Draco in the 7th century BC.[1]

> To say it's inferred by design is to say it's designed to be flawed.

Laws are subject to modification. Nobody would have assumed social security law as written in 1935 would not need to be updated as life expectancy and birth rates fluctuated. The 1935 law didn’t have any adjustment for inflation until COLA were added in 1975. I think that is going to be a fundamental disagreement between us which is fine. There is value in nailing down the exact and precise disagreement.

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