Donald Trump recently proposed eliminating income taxes on Social Security benefits. Why? No one knows. Maybe because low-income seniors already pay no tax on benefits, so it would mostly benefit the well off. And what Republican ever passed up the chance to make a regressive tax even more regressive?
In any case, let's see what Trump's fellow conservatives think of this:
Trump has come up with what I agree is an “ingenious” way to re-describe cutting Social Security, but if you were wondering who’s going to replace the missing immigrant labor under Trump the plan is for grandma to start picking fruit. pic.twitter.com/io7zM5EGc0
— Matthew Yglesias (@mattyglesias) August 2, 2024
Matt is being entirely too kind here. Stephen Moore was once commonly known as the stupidest man in the world, and this is why. First off, getting older people to stay on the workforce isn't a national priority for either party, as far as I know. Second, what does this have to do with taxing Social Security benefits anyway? Third, does Moore think this would cut Social Security costs? Why? Annual benefits go up if you retire later, so net lifetime benefits paid out are the same no matter when you retire.¹
So, fourth, I'm pretty sure Dems aren't mad they didn't think of this. It's a brain-dead idea that even the Heritage Foundation is too smart to endorse.² Only Donald Trump is dumb enough to propose something that would explicitly make Social Security's finances worse.
¹In addition, if you take Social Security benefits early—age 62, for example—but continue working, your benefits are reduced. However, they're made up either when you stop working or you reach age 67.
²Probably. Their 900-page Project 2025 tome, oddly, just doesn't have space to address Social Security. How about that? But I don't think they've ever proposed ending the tax on benefits, nor has any other conservative think tank.
It's because he assume sthe low-information personality looking forward to retiring on Social Security will eat that up because it sounds great to him.
Probably a good assumption. Add to the mix that the political media reported it uncritically, like they do with everything Trump wants them to say.
The "Trump agrees to debate" thing is just the latest in a nine year campaign by the political media to promote and protect him.
Competition is stiff to become the American representative for the Dumbest Man in the World. In the lead are Trump, Stephen Moore, Clay Higgins, and Tuberville. Still in the race are the Flat Earthers, and all the people who don't believe Trump is a racist.
Moore has more degrees in being stupid than any of the others. Sort of a tiebreaker.
Elon Musk keeps trying to get into a fist fight with somebody, lately Nicolas Maduro.
It's some kind of projection. He needs somebody to knock him out.
Maybe he can fight that Algerian boxer?
????????????????
Louie Gohmert. I am casting aspersions on his asparagus.
I regret neglecting to include Gohmert as well as James Comer. The field is wide.
Or believe he's honest. Or like this idiot. “I really feel he is working for the American people. That’s what he’s all about and I do believe that to be true and sincere.”- Dennis Quaid. Apparently portraying Ronald Reagan makes you lose brain cells. He also believes Trump defeated ISIS in three weeks. It seems Randy Quaid isn't the dumbest Quaid brother.
J.D. Vance says women should man up and have their rapists' baby,
https://www.yahoo.com/news/jd-vance-calls-pregnancy-rape-143614406.html
Just when I think he can't get any worse. What a pr/ck.
You didn't know about this?
There's a large supply of things he's horrible about.
"above all, we want women and young boys in the womb to have a right to life."
JFC, he is aware that women give birth to girls about half the time, right?
Good lord, Vance seems like a highly opinionated college freshman--so certain in his beliefs because he recently "reasoned" his way to them. In a better world, Vance would have no policy responsibilities for another 20 years to make sure he had time to age out of his nonsense.
If these people were serious that abortion is murder they'd be talking about charging rapists with murder.
More than half. 51% of births are female.
There's been big resentment for years in some circles (like on retirement-oriented Reddits or investment-oriented discussion groups) over SS benefits being taxable. The language is about "the Social Security tax bomb" or "torpedo" and stuff like that, all meant to imply that benefit taxability will make your total overall tax rate skyrocket at a certain point by exposing all your income to some extra-onerous higher taxes. And astoundingly to all, I'm sure, the people who talk like that are doing pretty well. This isn't about long-retired great-grannies working part-time to pay the utility bills.
But it's exaggeration (of course). Benefits *are* taxable if you have enough non-SS income, and it doesn't take a huge amount to get there. But you're still taxed at the margin and SS income is still favored-- at most 85% of it is taxable, and it's taxed as regular income, no extra-special penalties or anything like that. So getting to where SS is taxable doesn't suddenly spike *total* tax rates.
Moore is absolutely right about "getting older people to stay in the workforce longer" being important, though. For one thing, since they plan to keep raising the official retirement age, it's just going to happen. And two, when they round up and deport all those 10-13 million immigrants, *somebody* is going to have to be manning the camps and working construction and picking vegetables! It sure won't be the folks at Heritage.
Yes there is resentment about paying taxes on SS benefits, and you don't have to have a lot of other income to have to pay them. Why wouldn't Trump try to take advantage of this resentment - it doesn't take a genius to figure out that eliminating the tax could be a plus to seniors. It would be a stupid idea if either Trump or older right-inclining voters were really concerned about budget-balancing, but they aren't.
It would be a stupid idea if either Trump or older right-inclining voters were really concerned about budget-balancing
I think you are aware by "stupid idea" people are referring to the merits of the proposal. Not the political appeal. And, yes, any move to make our tax and transfer system more regressive is stupid.
Would there be as much resentment if SS withheld income taxes from the monthly payments, like employers with paychecks? Seems like people seeing they have to pony up cash at tax time might be a particular sore point. Plus, to speculate, having a tax preparer point specifically to that thing to explain why the bill is higher than they wanted it to be.
I don't know anything about the legislative history here, but I'd feel completely safe putting serious money on the proposition that taxing SS is something Rs insisted on, back in whatever day that was.
I don't know anything about the legislative history here, but I'd feel completely safe putting serious money on the proposition that taxing SS is something Rs insisted on, back in whatever day that was.
IIRC the change was courtesy of the Greenspan commission (early 80s) or at least that era. And TBH, it's a good idea. There's no particular reason certain kinds of income streams (in this case government payments) should be exempt from income tax. Warren Buffet's Social Security checks absolutely should be taxable income!
If said taxes are too much of a burden for some, simply lower income tax rates on the non-affluent. But this by rights should apply just as much to the $32,000 received by a McDonald's worker as it does to the $32,000 received by a 77 year old via Social Security.
The Greenspan Commission sounds plausible. BTW, I have no problem with taxing SS benefits-- that's why I mentioned the people on those discussion groups, who looked when I saw them like reasonably prosperous retirees looking for something federal to get agitated about.
Raising the income levels where taxability kicks in would make a lot of sense to me as a break for low-income people, who I think could mostly use it, especially as we seem to have rediscovered a degree of inflation. Completely eliminating taxability would be way disproportionately good to higher-income people (a lot like doing away with exemptions on 1040s as discussed by KD a week or so ago).
But the argument for reduced taxability is that it's specifically retirement income derived from a lifetime's active work on which taxes were fully paid, and a little bit of a break recognizes that. I'm sympathetic, honestly, and would be okay with top taxability in a phased-in range between, say, 50-60% and 90%, judgment call.
Raising or eliminating the FICA income cap would be a simple, direct, and much more fair way to approach SS finances, imo.
Raising or eliminating the FICA income cap would be a simple, direct, and much more fair way to approach SS finances, imo.
+1
I have a memory of this happening under Reagan. And I thought it was part of the big SS reform where SS taxes were raised. I assume this was all part of The Greenspan Commission you speak of.
At the time I thought of it as just another way Reagan wanted to screw the same working class that put him in office. 40 years later it doesn't look so bad. Although he did screw them in other ways.
For one thing, since they plan to keep raising the official retirement age, it's just going to happen.
With Congress's say so it'll happen. Otherwise not. This is a very unpopular move, so, I don't see cause for breezy certainty it's going to happen. Maybe some day...
Rs have been talking this up for years and I'd bet it's in the 2025 Heritage playbook. When they wrote that-- and come to think of it, until several days after Biden declined to run again-- they were absolutely certain they'd be running both sides of Congress and the White House come January. With that trifecta in hand, how much would public opinion matter to them? Especially when commanded by the minions of the orange God-King? It sure doesn't matter to their bespoke SCOTUS.
To be serious for a sec, the idea isn't only bad but it's just plain cruel for people who aren't lucky enough to have desk jobs, and I think the age hikes already made should be rolled back. But I've been around long enough to know they'd never do anything like that.
PS I see Kevin says the handbook doesn't mention SocSec. My bad there, but they still have been talking it up obsessively for quite a long time.
As a counter argument the Dems should advocate for lowering the age and removing the cap on income taxed. I've seen the posts on social media how its beneficial for older people to keep working. It's easy for someone who hasn't done anything remotely physically demanding their whole working life to think it's easy to keep working into their 60s and 70s. For most of the working class it's not. but most have to work into their 60s because they can't afford to stop working due to not having anything other than ssi to live on. Even then they still have to work to survive.
The problem happens when people retire early and take their Social Security, then work another job. For every $2 they make over the threshold, they have to give $1 back to Social Security. This stops once they are at the official retirement age, e.g. 67 ish. But still that can lead to a few horror stories of Social Security trying to get money back from a "poor" retiree. There was some news recently about Social Security trying to "claw back" benefits when they overpaid people. Different issue, but all of this is triggering, and will be conflated together to scare people.
Lumping all these issues together is what enemies of SS want, you're right, but there really are (at least) two different things going on wrt taxes and benefits. One is what you mention, the other is the way non-SS income triggers taxability of SS benefits on a sliding scale but starting at a fairly low level.
To me, the first is more of a real burden to the people affected by it, even apart from the horror stories. The second seems to especially bother retirees who have solid-to-significant investment income-- any non-SS income triggers taxability, not just work income-- and they tend to be a noisy group when they get bothered. Part of their upset may be because enough extra income will also trigger Medicare surcharges (but iirc, these adjustments come in at much higher levels than SS taxability) and they may feel oppressed by Uncle Sam for having provided for themselves, rather than fortunate to be in a position where they're exposed to the surcharges.
As I understand it, there are many more people without investment income who'd benefit from elimination of taxability, but they'd individually gain a lot less than investors and high-income people, who would probably get the bulk of relief collectively too. I don't think that's fair, but raising the point where taxability comes in would be.
And above all, raising or eliminating the FICA ceiling would be far simpler and more fair, not mention bring in a whole lot more dough. It *would* be a huge temptation to cheat on non-wage income, though, so it would have to be enforced carefully.
Ron Johnson holds the current title of "The Stupidest Person in the U.S. Senate." Fortunately for him, Herschel Walker was defeated in Georgia's 2022 Senate election. Had he won, Johnson would have had to relinquish his title. But, as of today, he remains unchallenged in his position as "The Stupidest U.S. Senator."
There are a number of worthy contenders. John Kennedy is very stupid, too, in a "smugly doesn't realize it" kinda way.
John Kennedy is a graduate of Oxford & the University of Virginia Law School. His Jubilation T Cornpone (or Foghorn Leghorn, if you prefer -- Google it) shtick is an act.
President Trump also wants to establish death panels, to decide who is worthy of living past the age of 67. I'm sure the Democrats are mad they didn't think of it first. Are they going to entertain any stupid idea that pops into that dumb mother f%ckers head? Or is it theirs and they somehow convinced Trump it was his? lol. Either way it just makes me go what the actual f%ck!
I'm sure he's going to roll out a lot more ???? in the coming weeks. I predict a veritable ???? storm of bad ideas that hurt the working class, the elderly, those on welfare, the disabled... basically everyone except the wealthy. Like himself.
What do you mean, Kevin, you don't understand? It's simple: lots of people don't KNOW that SS benefits are only taxed for higher earners, so for lots of low-information (i.e., swing) voters, Trump's claim evokes an image of cutting taxes on old people.
It's simple: lots of people don't KNOW that SS benefits are only taxed for higher earners,
Higher earners?
From Charles Schwab:
I regard the Trump proposal as very bad public policy. But it's not really tenable to state SS benefits are only taxable for "higher earners" as that term is normally understood in America. Twenty-five grand would the less than the equivalent of a minimum wage worker in some states!
Only about 40% of people who get SS benefits pay federal income tax on those benefits. So you don't have to be rich, exactly, but still well above the median.
25 grand is not "well above median" for Americans in general, though it may be above median for retired people.
Only half of SS benefits count toward that figure.
That's $25K/yr after they retire and take Social Security, if 67 or older, and it's above their Social Security benefits. Most people don't save a lot for retirement and few places have defined benefit retirements anymore. The can retire because they've paid off their house and car and student loans--and combining retirement benefits, part-time work, and Social Security, they can get by on taking home $40K/yr.
'Count' doesn't mean 'paying'.
It would be stupid if he actually intended to carry through on this, but of course he doesn't. These are just ideas that bubbled to the top of his addled brain that he thinks sound populist.
No tax on tips!
No tax on SS benefits!
And Mexico is going to pay for it all!
Yeah, it's like we're at the flinging-feces-through-the-bars stage of the campaign, isn't it?
Well put.
The moment they eliminate taxes on tips, the 1% will be declaring 99% of their income as tips. They'll find a way.
I'm pretty sure that's the plan.
If Americans vote for trump and give republicans control of congress, should they get what they vote for? No matter how stupid I think it is? At some point… fuck ‘em.
Republicans want to cut Social Security. So attack Democrats for taxing benefits--even though they started it and it is a progressive tax.
Donald Trump
Matthew Yglesias
Stephen Moore.
I admit it took me a moment or two to realize who here was "the stupidest man in the world." At various times, all have given their best to earn the title.
If I am not mistaken -- and I may be; it's been awhile since I had any good reason to know these things -- income tax on Social Security benefits goes back into the Social Security trust fund rather than into general revenue.
This may be what Yglesias is referring to as "cutting Social Security" ... albeit it is via the usual Trumpublican means of starving the beast and then being Shocked! Shocked! that the system is running out of money and benefits need to be cut in order to save it.
Benefits are only taxable if your income exceeds certain levels, which often means only if you continue working. Which may be what the idiot is alluding to.
...income tax on Social Security benefits goes back into the Social Security trust fund rather than into general revenue.
Correct. Prior to 1983, Social Security benefits were not taxed. That changed under Reagan. The stated purpose at the time was to assure financial solvency, not to put grandma in or out of the workforce.
If you want an example of how different the politics of the 1980s and 2020s are, look no further than the introduction of taxes on Social Security income. The new tax was introduced under a Republican president and passed by a Congress with a 10-seat GOP majority in the Senate and at 100+-seat Dem majority in the House. (Thanks, Tip!)
Elite thinking still ruled the day. In the name of "fiscal responsibility," everyone could agree that cutting benefits and raising taxes on retirees was the prudent thing to do. When it came to lowering tax rates for top earners, however, it was a different story: Fuck fiscal responsibility! (Some things never change.)
From the SSA:
If I was just scrolling across the page quickly I would have figured that Drum's idea of the stupidest person in the world was Yglesias, and I wouldn't think twice about that.
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