Good post but I have to add here that SS benefits are also taxed and there is so-called means testing (through other income) in the existing tax code. Plus if one is under the full age (65 or 66), he gets his benefits cut right off the top the more he earns in salary. The idea of cutting benefits fully for high-incomes (1%?) is intriguing but I don’t see it saving much, not immediately anyway.
Possibly you’re right, as I am not a tax expert, but it is my impression that if one is the “magic age” (isn’t it 66 now?) for full benefits he can earn any amount of money and not be penalized in his benefits, though he will be taxed at ordinary income rates for some or all of his SS income.
I’m not just talking about the 1%. I know a man who served out his time in the service and retired as, I believe, a full colonel. He was a JAG officer and never fired a shot in anger or saw a war zone. He gets a pension for that. He was a lawyer and was pretty well connected, so he was appointed as a judge in the bankruptcy court. He served enough time there for a pension for that. He then went into private practice and got enough quarters in to draw social security. Does he really have a greater moral claim on the public weal (which he undoubtedly does) than some woman who worked on the line all her life and draws half what he does?
Not long ago I closed a loan for a couple. The man was retired military and had some other thing he was drawing. He and his wife both drew social security retirement. Their combined income was over $12,000/month. I fail to see why they should get more in SS than someone who totally depends on it to live a cornbread living, or the same amount, or any at all.
I know a man who got in on the IPO of a company of which he was an officer (CFO I believe) early in the game. He recently cashed out some (but not all) of his options for 40 million dollars. He also has a generous pension from the highly successful company. I don’t know if he draws SS or not, but he certainly could.
I have nothing against the well-to-do. If a man makes ten million a year, I don’t care at all. But when young working families pay into a system that pays the people I mentioned above, and particularly when many of those working will never receive the benefit of the taxes they’re paying, I say something is terribly wrong.
And I think its doubly wrong when it’s just a fact that “transfer payments”, of which SS is one, comes from labor’s portion of the gross national income. There are reasons why that’s so, but it would take too long to explain.
If a person is elderly and has a net income of, say, $100,000/year, is there any compelling moral reason why he should be subsidized by some line worker who maybe makes $30,000.00 a year and struggles to support young children?
