Well, if Ryan accepts the Senate version, there won’t be a vote.
FICA tax already applies to something like 88% of all wages. Removing the cap is not nearly enough to solve the problem long-term.
In addition, the benefit is related to how much you’ve paid in over the years, and is capped because the taxed earnings are capped. Are you proposing removing the benefit cap as well?
SS is already means-tested, by taxing benefits - your benefit can be reduced by 30% or more if you have a decent retirement income. And remember, you already paid taxes on the money you paid into the system - why aren’t benefits treated like a Roth IRA?
It’s not that you have to work longer to qualify - you can still claim your benefits at 62, and still need the same number of quarters of work, and that hasn’t changed, even as the so-called “full retirement age” (FRA) is being increased. I don’t remember hearing anyone talk about raising the minimum age you can file.
However, when you take your benefit before FRA, your benefit is reduced. The longer between when you claim benefits and your FRA, the more it gets reduced. So raising the FRA really amounts to a cut in benefits - about 6% for every year the FRA gets raised.
@“Cardinal Fang” , I actually agree with you about the problems related to asking people to work longer who do physically gruelling work such as first responders, hotel maids, construction workers, etc. I think the challenge is to keep the program solvent and, if we could do a better job with financial literacy with high schoolers and college students, they might be able to save enough to help them bridge from retirement to Social Security when physical demands make their work impractical. Wouldn’t hurt to raise wages or consider a universal income, but that’s beyond this thread’s discussion.
I recognize that the idea of saving is practically impossible for those who are living paycheck to paycheck and who will have less take home pay after the initial tax “savings” that Paul Ryan predicts evaporate and when they have to pay more for healthcare. He uses the fictional Cindy to illustrate how low income folks will be able to build those savings. Not sure how to communicate how much sarcasm I have for his example without screaming in all caps. https://www.washingtonpost.com/news/fact-checker/wp/2017/11/21/meet-paul-ryans-cindy-a-single-mom-who-he-says-gets-700-from-the-tax-bill/?utm_term=.10855f398c52
Wow. I am sure Senator Collins is feeling like a chump now. This only increases the odds that the house will simply pass the senate version. Too risky to chance her wrath on another voting round.
She might well have just voted herself out of office for this one.
I edited my post because I can’t find the 20% excise tax in the bill. I’m providing a link to the bill, however, so people interested in it generally can look at it.
https://www.congress.gov/bill/115th-congress/house-bill/1?q=%7B%22search%22%3A%5B%22HR+1%22%5D%7D&r=1
@notrichenough, good point; so a three-year extension is roughly the same as 24% benefit cut. Given that, are you saying the reduction in younger people’s employment is too small to matter? Not picking a fight at all, trying to understand your point.
And at this point, is there any talk of changing the eligibility age for Medicare? I’m not aware of any. That would certainly incentivize people to work to that age.
No, they have to go and be cashiers at the grocery store or greeters at WalMart.
@rosered55, really? Is that the (Carmen Yulin) Cruz amendment?
These guys aren’t fooling around! Weaponized tax policy.
If I keep this up the reconciled version is gonna have the Dave_N whining excise tax!
These people are pure evil.
Time for me to go back in my bubble for awhile.
It’s possible that old people hanging on to jobs is limiting young people’s employment, but I’ve never seen numbers that try to quantify this.
Plus, we are currently at full employment with the official unemployment rate at 4.1% and the U6 rate is under 8% and less than half what it was a few years ago. So it seems like there should be opportunities for young workers, or really, any workers.
The labor participation rate is down but no one really knows why. I have no idea how the young/old equation affects this.
See how soon euthanasia becomes totally legal.
sharing this, though haven’t assessed it, as I don’t have a dog in the grad student battle:
https://www.sciencefriday.com/segments/how-much-will-the-house-tax-plan-cost-grad-students/
Now that I think about it, one number that probably indicates older people are working longer is the percentage of people who file for benefits at age 62. This number has dropped quite a bit - in 2005, 55%/60% of men/women filed at 62, this is now down in in the 40’s for both men and women.
Is this because the economy and job prospects have improved for older workers so they can get jobs/work longer in their 60’s? Is it because older workers feel less secure about their retirement so they decide to work longer? Both? Other? I don’t know.
Piece in NYT re Grumpy Generation (45-54 years old) from last week with respect to effects of people working longer:
I’m 52, born in the baby bust year.
But I’ve always been grumpy.
In my specific profession, people are hanging on to their jobs forever…we have to retire at age 65 and most people are staying till their very last day. And working extra. It’s aggravating, because it’s a seniority based system, and we don’t move up or hold better trips until people retire, medical out, or die. “Get outta my seat”, is what the younger people are saying. I don’t think I’ll be hanging on like that, but who knows.
The reasons I think are that people like the job, they are staying healthier, and as their income goes up (but pension doesn’t), it’s a large decrease in income after retirement. Some people, it’s because of multiple ex-wives, bad investments, paying for kids colleges, keeping company paid medical insurance. The company paid medical is not such a big deal for people I know, but I’ll bet that is huge for many workers.
Lots of workers do not get company-provided retirement medical insurance. Those who retire earlier than age 65 (when they can get Medicare) need to account for having to buy it on the individual market (not exactly an appetizing prospect under the ACA, especially if they live in an area with limited options, although it was worse pre-ACA since many were uninsurable at any price due to pre-existing conditions).
Of course, if Medicare gets cut back (the tax bill may bring the day of reckoning earlier than it otherwise would), there may be an even greater incentive to keep working at an employer offering medical insurance until one dies.
I think it’s very rare to get company paid insurance nowadays. Maybe if you work for the government, are a high level executive or have it negotiated by your union. We are able to keep our company paid insurance, but have to pay for it (guessing 12-14K for two people, which is a very good deal).
And yes, if Medicare is pared back, good luck getting people to retire!
Speaking of retirement ages, here’s an interesting thought that’s on-topic for higher-ed discussions generally: Academia used to have mandatory retirement ages (at most places, at least) for tenured faculty. That practice ended at the end of 1993, when the exemption carved out in the Age Discrimination in Employment Act expired. Now, tenured academics tend to work as long as they want to, often into their 70s and even 80s. That’s fine, we can do that—it’s not like your knees get worn down by all that constant pacing in front of your classroom, you know?
But part—not all, but a non-trivial part—of the crisis in the higher-ed job market can be traced to that moment, because it both made openings for new entrants into the industry less plentiful and less predictable.
Basically, just a cautionary tale to point out that moves to reduce retirements can have unintended consequences.
It was probably more common in previous generations to have it included as part of a defined-benefit pension package (and when medical costs were significantly lower than they are now). Now, even just having it available for the retiree to pay for can be a step up from having to look for something on the sometimes-sparse ACA marketplaces (or having no options at all in the pre-ACA time).