The plan, first reported by the Associated Press, would be part of a major overhaul of the tax code that would make the US system look much more like that of many European nations, which long ago adopted a Value Added Tax model. A VAT is a form of consumption tax that falls on consumers rather than producers.
Social Security is an entitlement not because people feel they are due to something that they didn’t earn, but because they believe, rightly, that they have paid for it directly from their wages throughout their working lives.
If the payroll tax is eliminated, and the system is funded by Congressional appropriations, the link between work and the Social Security check that one receives in retirement will be weakened, and that could have real ramifications for future debates about the program.
From the article: (The fact is that most Americans who live long enough to collect Social Security will actually get far more back from the system than they paid into it. So, while they may not be getting something they don’t deserve, they’re definitely getting more than they deserve.)
If could have put SS payments into Index Fund would be ahead of game!
Politicians do not have good record when coming to funding pension funds.
They always find different reason for monies collected- than the intended purpose.
I would not expect anything different from current or future crop to fund SS properly
Before screwing with sociable insecurity or a consumer tax, DJT should abolish income tax
> “A VAT is a form of consumption tax that falls on consumers rather than producers.”
No, a VAT is not a consumption tax. A consumption tax is a sales tax levied on consumers. The consumer is the endpoint of the supply and production chains. A tax on consumers is a retail tax in the form of a sales tax.
A VAT, or Value-Added-Tax is a tax levied on each vendor, supplier, assembler, fabricator. It is a tax on each stage of production, a supply chain tax applied at all points in the nodal network of B2B activity. All the VATs applied are HIDDEN from the consumer.
A true retail consumer tax is completely transparent. All taxes in the production stages are reduced to zero and are shunted to the end of the chain at the retail consumer endpoint.
The fact that a true retail consumption tax is completely transparent is very disturbing to those who make their living by dreaming up new and old ways to tax everyone else.
Rather than support a transparent consumption tax, friends of taxes will always opt for taxes they can hide. They like the VATs.
Damn ... I hope so
From what I understood, Trump wanted to monkey around with SS and eliminate the mortgage interest deduction, but his advisors told him not to, so he took both off the table.
So much conflicting news and fake news. Who the hell knows what is true anymore?
Replacing income taxes and payroll taxes to a consumption tax does have the benefit of clawing back payments made to the gibmedats and dindunuffins.
People are resistant to change so it will be a hard slog, but I am not opposed as long as income/payroll taxes are well and truly ended.
Actually the value added tax is very good if it is the only source of taxation for the govenment. With the VAT if you buy anything you have skin in the game be it buying food or a pint of beer. Thus it has direct effect on those that are producers of wealth and those on welfare that consume the wealth of others.
A Value Added Tax in conjunction with an income tax destroys rational economics and at such point rational economics become irrational due to an irrational tax structure.
When rational economics due not prevail irrational economics do prevail and all suffer for this.
The VAT is a very logical structure for taxation. If any other taxes are imposed other than the VAT it is a malignant creature.
No, no, no....a thousand times no! My wife and I pay heavy SS taxes and income taxes all our 40+ year working career, and now they want to switch to a consumption/sales tax as we transition to retirement and start spending our life savings?!? No thanks!
“Hidden” (VAT) style taxes are a bad idea on top of it...allows politicians to raise tax rates with the product producer taking all the blame for higher prices.
I agree with an earlier poster that this further “disconnects” your (& your employers) working contribution to SS, and gives it more of a welfare/entitlement feel, even if the way they are running it now your contribution goes instantly from your paycheck directly to current recipients check w/o a “trust fund” or “investments” going on in between.
Socialist Schools are the 1st.
The article doesn’t match the title.
No where in the article is there any explanation for how this plan would affect your present social security payments, much less what the effect would be on future Social Security payments.
It discusses how Social Security is funded.
Further, the author is stupid or uninformed as to whether or not one will receive more than they laid into the system.
There is a thing called compound interest and you should be able to draw down all monies you paid into Social Security as well the interest you would have earned.
There will be no change to benefits for those currently receive SS or those nearing that age...
And [Trump] looked at one and said, ‘What is that?’ And I said, ‘Well, that’s a change to part of Social Security.’ He said, ‘No. No.’ He said, ‘I told people I wouldn’t change that when I ran. And I’m not going to change that. Take that off the list.’ “
bump
For those FReepers approaching 65 years old that are veterans be very careful about Medicare. I’m warning you now because I’ve been having some strange things going on with the process. I got my Medicare card showing Part A and B. Part of the card was to be sent back to Medicare if you opt out of part B. I got a phone call (cell) telling me to send the portion of the card back. How did they have my cell phone number? Why would they want you to opt out? Funny thing is, if you drop part B, your VA medical benefits are suspended until the January of the next year. After going to the Medicare website to verify I was really enrolled, I was given a list of 5 or 6 things I was qualified for immediately. Which were exactly the things I was in the VA for this last year. It’s like the information came from the VA. There’s a minefield out there guys, be aware.
Absolutely brutal for those who have been paying in for a lifetime—and then would continue paying via a VAT.
“fiddling with the Social Security system”
SOMETHING THE RATS HAVE BEEN DOING SINCE ITS INCEPTION.
FACTS:
History Lesson on Your Social Security Card
Just in case some of you young whippersnappers
(& some older ones) didn’t know this. It’s easy to
check out, if you don’t believe it. Be sure and show
it to your family and friends. They need a little history
lesson on what’s what and it doesn’t matter whether
you are Democrat or Republican. Facts are Facts.
Social Security Cards up until the 1980s expressly stated
the number and card were not to be used for identification
purposes. Since nearly everyone in the United States now
has a number, it became convenient to use it anyway
and the message, NOT FOR IDENTIFICATION, was removed.
Franklin Roosevelt, a Democrat, introduced the Social
Security (FICA) Program. He promised:
1.) That participation in the Program would be
Completely voluntary,
No longer Voluntary
2.) That the participants would only have to pay
1% of the first $1,400 of their annual
Incomes into the Program,
Now 7.65%
on the first $90,000
3.) That the money the participants elected to put
into the Program would be deductible from
their income for tax purposes each year,
No longer tax deductible
4.) That the money the participants put into the
independent ‘Trust Fund’ rather than into the
general operating fund, and therefore, would
only be used to fund the Social Security
Retirement Program, and no other Government program, and,
Under Johnson the money was moved to The General Fund and Spent
5.) That the annuity payments to the retirees would never
be taxed as income.
Under Clinton & Gore
Up to 85% of your Social Security can be Taxed
Since many of us have paid into FICA for years and are
now receiving a Social Security check every month —
and then finding that we are getting taxed on 85% of
the money we paid to the Federal government to ‘put
away’ — you may be interested in the following:
—————— -———— -———— -———— -———— -———— ——
Q: Which Political Party took Social Security from the
independent ‘Trust Fund’ and put it into the
general fund so that Congress could spend it?
A: It was Lyndon Johnson and the democratically
controlled House and Senate.
————— -———— -———— -———— -———— -———— -———— —
Q: Which Political Party eliminated the income tax
deduction for Social Security (FICA) withholding?
A: The Democratic Party.
————— -———— -———— -———— -———— -———— -———— -——
Q: Which Political Party started taxing Social
Security annuities?
A: The Democratic Party, with Al Gore casting the
‘tie-breaking’ deciding vote as President of the
Senate, while he was Vice President of the US
-————— -———— -———— -———— -———— -———— -———— -
Q: Which Political Party decided to start
giving annuity payments to immigrants?
AND MY FAVORITE:
A: That’s right!
Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65,
began to receive Social Security payments! The
Democratic Party gave these payments to them,
even though they never paid a dime into it!
—————— — —————— -———— -—— —————— -———— -————
Then, after violating the original contract (FICA),
the Democrats turn around and tell you that the Republicans
want to take your Social Security away!
Social Security is most definitely not an entitlement. It's earned income benefit with a form of government retirement system. It works because it's assumed our government is rock solid and will not default on paying this to those who earned it. It's not an entitlement and most certainly not a hand out. It was earned by the taxpayer who receives it unless it is given to immigrants who did not pay enough into it to qualify for the standard 40 quarters of paying into it. They had better think of ways to reinforce SS and not mess with it. For millions and millions of people; it's all the income they have to live on. Sad but true.
Sense of entitlement to Social Security is precisely the problem. We are falsely under the impression that we are entitled to something that we are not entitled to. That false impression is a major problem.
The payroll tax is a tax. It is not an insurance premium. It is not an annuity. Per the Constitution Congressional spending of tax revenue can change at any time.
Social Security is an entitlement not because people feel they are due to something that they didn’t earn, but because they believe, rightly, that they have paid for it directly from their wages throughout their working lives.>>>>>>>>>>>>>>>
Exactly. DO NOT MESS WITH IT.
As with any major change of this sort, there would be a cutoff point and those in the gray area around it’s edges would be given a choice to stay with SS or go another avenue. Those who suffer most would be those who never work enough to pay into a system but get paid anyway.