Iolaus
08-17-2004, 02:39 PM
I know most of you aren't thinking about Social Security yet, but you will be soon enough. Remember, you're paying these benifits out of your taxes. Unless something is done, when the baby boomers begin to retire, the amount of benifits will go up, and so will your taxes.
If these figures are right, Kerry's benifit cuts will have to go much further down the income scale.
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JOHN KERRY WANTS YOUR SOCIAL SECURITY BENEFIT!
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Although John Kerry has not laid out a plan to reform Social Security or to
solve its fiscal problems, he has said he would consider "making sure that
high-income beneficiaries don't get more out than they pay in" as taxes during
their working years.
In practice, the Kerry plan would mean cutting Social Security benefits by
about 80 percent for those whose benefits are reduced, says Martin Feldstein,
chairman of the Council of Economic Advisers under President Reagan.
Here's why:
O Anyone who turns 65 this year and who has always paid the maximum
Social Security tax would have paid total taxes from age 21 to 65 of
$82,066; such a new retiree would now be entitled to annual benefits of
about $22,000, an amount that would rise with the price level.
O With an expected remaining life of 17 years and a 2 percent inflation
rate, this retiree would receive $440,000 by age 82; to limit the
expected benefit to the $82,066 paid in lifetime taxes, the Kerry plan
would require cutting the benefit by 80 percent, thus lowering the
annual benefit from $22,000 to only $4,100.
Kerry has not said which "high income" retirees would be hit by these drastic
cuts. If it is limited to the same top 3 percent of income earners as the
$200,000-plus group that Kerry has targeted for an income tax increase, the
number of individuals and the cut in total Social Security outlays would be
very small. Even the 80 percent cut in benefits for that group would reduce
total Social Security outlays by less than 5 percent. A benefit cut targeted
in that way would be more of a gesture against high earners than a serious
attempt to reduce Social Security's fiscal shortfall, says Feldstein.
Source: Martin Feldstein, “Fact vs. Fancy: The Skinny On Social Security,”
Wall Street Journal, August 17, 2004.
If these figures are right, Kerry's benifit cuts will have to go much further down the income scale.
--------------------------------------------------------------------------------
JOHN KERRY WANTS YOUR SOCIAL SECURITY BENEFIT!
--------------------------------------------------------------------------------
Although John Kerry has not laid out a plan to reform Social Security or to
solve its fiscal problems, he has said he would consider "making sure that
high-income beneficiaries don't get more out than they pay in" as taxes during
their working years.
In practice, the Kerry plan would mean cutting Social Security benefits by
about 80 percent for those whose benefits are reduced, says Martin Feldstein,
chairman of the Council of Economic Advisers under President Reagan.
Here's why:
O Anyone who turns 65 this year and who has always paid the maximum
Social Security tax would have paid total taxes from age 21 to 65 of
$82,066; such a new retiree would now be entitled to annual benefits of
about $22,000, an amount that would rise with the price level.
O With an expected remaining life of 17 years and a 2 percent inflation
rate, this retiree would receive $440,000 by age 82; to limit the
expected benefit to the $82,066 paid in lifetime taxes, the Kerry plan
would require cutting the benefit by 80 percent, thus lowering the
annual benefit from $22,000 to only $4,100.
Kerry has not said which "high income" retirees would be hit by these drastic
cuts. If it is limited to the same top 3 percent of income earners as the
$200,000-plus group that Kerry has targeted for an income tax increase, the
number of individuals and the cut in total Social Security outlays would be
very small. Even the 80 percent cut in benefits for that group would reduce
total Social Security outlays by less than 5 percent. A benefit cut targeted
in that way would be more of a gesture against high earners than a serious
attempt to reduce Social Security's fiscal shortfall, says Feldstein.
Source: Martin Feldstein, “Fact vs. Fancy: The Skinny On Social Security,”
Wall Street Journal, August 17, 2004.